MI/00 1/5 MARKET ACCESS (REPORT BY JAPAN)

REPORT BY JAPAN

I.    INTRODUCTION

This analysis is based on the responses from sixteen economies on the Question 9 - Market Access - of TEQ [MI/99 I/2.REV.2].

Responses of 15 economies( Australia; Canada; Hong Kong,China; Indonesia; Japan; Korea; Mexico; New Zealand; Papua New Guinea; Peru; Philippines; Singapore; Chinese Taipei; Thailand; and the United States) reply to sub-questions respectively, and some of them are supplemented by attachments of detailed explanation. China’s response is not specific to this question but explains generally its maritime transport policies, which include some information on this question.

Some confusions are seen in the responses and all the detailed explanation of restrictions are not sufficiently given for analysis in some cases. Some issues in a column of responses, for example, would apply to other plural sub-questions, but are mentioned only in one sub-question. It might be better to describe these responses as horizontal ones, indicating other sub-questions which might be applied to. Our analysis work, therefore, is obliged to be done under certain specific conditions and limited information.

The TEQ project is aimed at transparency on member economies’ international shipping policies and activities, fostering the concept of the Maritime Mission Statement, in which member economies agree on the need to encourage and foster, Liberalization, Efficiency, Facilitation, Harmonization and Transparency, and other. All of them are in accordance with the aim of the Bogor Declaration.

Bearing in mind the objectives of this analysis work, some restrictive measures described in the responses should be reviewed from the view point of the concept of the Maritime Mission Statement. Facilitating this work, categorization by the nature of restrictive measures is being given as "REMRKS" next to the "ANALYSIS" paragraph of each sub-question, and some of categories are being discussed in the following "GENERAL OBSERVATION" chapter .

II.     RESPONDED QUESTION TO BE ANALYZED

This portion of the questionnaire seeks to identify both government and non-government measures that may restrict access to international maritime transport market. Examples of such restrictive or discriminatory government measures are as follows: nationality requirement, numerical(quota) or value limitations; reservation of cargo to national-flag carriers, procedural restrictions in the form of license approval or economic needs tests; type of business entity requirements (i.e. joint venture); foreign ownership requirements (equity ceilings); foreign labor restrictions.

Non-government (or private sector) measures that have the effect of creating a monopoly may not be subject to government oversight or control. The absence of foreign entities engaged in maritime transport activities in individual APEC economies may indicate the existence of possible non-government measures that act to exclude maritime transport activities being performed by foreign companies. Admittedly, there may be reasons related to insufficient infrastructure that form natural barriers to establish of foreign maritime transport activities.

The presence of market access limitations should be described on the basis of international maritime transport activities, noting the presence or lack of foreign entities actually engaged in these specific activities described in the notes found at the end of the questionnaire.

This question consists of 6 sub-questions;
(1)Cargo Carriage,
(2)General Activities Performed by International Ocean Carriers,
(3)International Logistics, Consolidation and Freight Forwarding Activities,
(4)Shipping Agent Activities,
(5)Trucking Services in Connection with Ocean Transport,
(6)Port Services.

The sub-questions (1) and (2) relates to shipping activities in their own right. The sub-questions (3) and (4) are services auxiliary to shipping activities, but the sub-question (3) as well as (5) relates to intermodal transport operations. The sub-question (6) covers overall port services.

Restrictions described in this section of TEQ vary widely, and apparently have own purposes and certain reasons. Some might be based on horizontal reasons, and others could be caused by economical reasons of maritime transport. Technical and safety reasons could also exist. To analyze fully purposes and reasons of restrictions, we found some response to be not sufficient. Therefore further information would be necessary for understanding. However, by grouping similar restrictions, we will be able to deliberate them type by type.

The Maritime Initiative group has already established the Maritime Mission Statement, setting out principles for promoting an efficient, safe and competitive operating environment for maritime transport to be achieved by economies working together and the private sector, with the objective of fostering the concept of intermodalism and encouraging member economies to adopt a forward looking origin-to-destination approach including modal interface and onward transport. These principles in the Maritime Mission Statement facilitate our discussions and indicate our destination.

From this point of view, most of responses to TEQ indicate no restriction to market access. It would be evaluated to be in line with the direction of the Maritime Mission Statement.

On the other hand, there are still some restrictions, which are thought to be required for individual reasons of the economies, however we should review them based on the principles in the Maritime Mission Statement.

While grouping restrictions, we found that some restrictions apply horizontally, some are required from the reasons of other services sectors. We should also take this difference into consideration when considering pragmatic and practical future direction of such restrictions. The types of restrictions below generally show this perspective.

(a) For restrictions required from characteristic reason of maritime transport

ex. Cargo sharing/ Cargo reservation should be reviewed from the view point of efficiency and free competition environment of maritime transport.

(b) For restrictions required from relations with other transport sectors ex. Special restrictions to trucking services Requirement for customs brokers should be reviewed in the same way as above (a) from maritime transport side, and also should be jointly considered with other services sectors side.

(c ) For horizontal restrictions ex. Control of foreign investment Type of business entity requirement possible to review from the view point of efficiency and free competition environment of maritime transport, but horizontal approach might be much better. If the MMS might not show enough guidance to this review, we should also refer to the philosophy of the Bogor Declaration.

IV. ANALYSIS of RESPONSES

The numerals in [ ] show the number of economies.

11 economies respond "none", 4 economies indicate some sorts of cargo reservation, and one economy does not mention anything. These cargo reservations could be grouped by character as follows.

(1)    Government cargoes and cargoes generated in connection with loans made by the instrumentality of the government. These are distinguished from commercial cargoes, and should be carried only by vessels registered in the economy. Some specific percentages of applicable cargoes (for example, 50% of general government cargoes ) are defined in case of need.[3]

(2)    Cargoes on a certain trading route: The cargoes on a certain route which are regarded as coastwise trade are reserved to domestic vessels. [1]

(3)    Reasons of international agreements: To implement international agreements such as Convention on a code of conduct for liner conferences, bilateral agreements, cargoes should be shared. [1]

(4)    A specific commercial cargo(oil) is also reserved. [1]

(5)    Reservation as a retaliatory measure: The reservation is applied only in special cases that the principle of free competition is not observed and it affects the national economy. [1]

Remarks

This sub-question touches upon restrictions on access to maritime transport market. The restrictions listed above are mainly due to reasons of maritime transport sector itself.

The reasons for restrictions should be reviewed from the principles of the Maritime Mission Statement, which states the need of continuing process of liberalization of maritime transport to ensure, through fair, reciprocal and equitable market access and investment opportunities, the creation of a competitive transportation operating environment.

From the view point of transparency stated in the Maritime Mission Statement, the detailed information and results of government cargoes and other related cargoes to which the reservation apply should preferably be provided to other economies. Reviewing in APEC forum reasons for reservation based on international agreements, especially bilateral agreements, has puzzling problems in the sense of international law. But because they effect the maritime transport market eventually, the reasons of reservation should be reviewed from concepts of the Maritime Mission Statement, especially from the principles of Liberalization, Efficiency and Facilitation. To compliment this reviewing work, comparing statistical trade results and efficiency of the restricted routes with others could be useful.

10 economies respond "no", and 6 other economies mention some restrictions. These restrictions are quite different.

(1)    Special requirement for customs brokers[1]

Customs brokers must be licensed and must take the form of a partnership composed of persons who are citizens or permanent residents of concerning economy.

(2)     Authorization for operators[1]

The ministry authorizes the operators.

(3)     Numerical restriction[1]

The number of the entities is limited by the Government.

(4)     Limitation on foreign capital of business entity [1]

Percentage of foreign capital is limited to less than 40%.

(5)     Nationality requirement

All employee should have the nationality of concerning economy.[1]
Some top managerial staff should have the nationality of concerning economy.[1]

(6)     Bilateral agreements for establishing entities[1]

Establishment of maritime related entities is subject to a bilateral agreement, and their scope of business will be defined by the agreement.[1]

Remarks

These restrictions have their own purposes and foundation which should be always born in mind in analysis. Viewing from the principles of the Maritime Mission Statement, restriction of entities, such as number, foreign capital and bilateral agreement requirement, are ones of problematic issues for achieving competitive transportation operating environment and continuing process of liberalization of maritime transport.

2.    International Logistics, Consolidation, and Foreign Forwarding Activities.

9 economies respond "no", and 7 economies mention some restrictions.

(1)     Horizontal control of foreign investment

A certain amount of investment, a certain new business, a certain acquisition of real estate and etc., should be notified to the Government. In case of more than a specific amount, the notification is received only when the proposal is not contrary to the national interest.[1]

(2)     Reciprocal principle

Approval for establishment of freight forwarding company is based on reciprocal principle.[1]

(3)     Limitation on foreign capital of business entity

Percentage of foreign capital is limited to less than 49%[1], or 40%[1].
Only form of joint venture can be established.[1]

(4)     Performance of customs clearance and inspection activities

The performance of customs clearance and inspection activities is limited.[2]

(5)     License approval

Approval is necessary for conducting activities of this sub-section.[2]

Each restriction has its own reason for necessity. Some of them are due to requirement not only from the maritime transport sector but also from the other sectors. In the activities of this sub-question, we find many limitations on foreign capital or investment. Viewing from the principles of the Maritime Mission Statement, especially the principles of Liberalization, Efficiency and Facilitation, reasons of this capital limitation should be further analyzed.

Analysis

14 economies respond "no", and 2 economies mention some restrictions.

(1)     Designation of an agent consignee

Foreign shippers will require to designate an agent consignee of ships.[1]

(2)     Type of business entity requirement

Percentage of foreign capital is limited to less than 40%.[1]

The activities of this sub-question closely arerelated to maritime transport. The reasons for restrictions should be reviewed from the principles of the Maritime Mission Statement, in particular, principles of Liberalization, Efficiency and Facilitation.

12 economies respond "no", and 4 economies mention some restriction.

(1)     Specific control of acquisition in certain transport business

Approval is required from the Government prior acquisition of transport business with certain amount of asset.[1]

(2)     License approval

License is necessary for conducting certain trucking services.[1]

(3)     Type of business entity requirement

Percentage of foreign capital is limited to less than 40%.[1]

(4)    Special treatment in a certain region[1]

The services of this sub-question is one of onward transport services connected to in international maritime transport. The Maritime Mission Statement states in its preamble "encouraging member economies to adapt a forward looking origin-to-destination approach including modal interface and onward transport." Consideration of reasons of restrictions is encouraged in due course bearing fully in mind the principles in the Maritime Mission Statement.

Analysis

11 economies respond "no", and 5 economies mention some restrictions.

(1)     Specific control of acquisition in certain transport business

Approval is required by the Government prior to acquisition of transport business with certain amount of asset.[1]

(2)     License approval

Operating license is required for operating port services.[1]

(3)     Nationality requirement

Foreign shipping company is not allowed to lease, own or operate terminals.[1]

(4)     Limitation on foreign capital of business entity

Foreign enterprises may establish joint ventures to build and operate berths for public use, but the Government side shall have dominant share holder.[1]
Percentage of foreign capital is limited to less than 49%[1], or 40%[1].

(5)     Agreement between terminal operator and transport operator

Agreement between terminal operators and transport operators are regulated by the Government.[1]

Remarks

Characteristic points of this services lie on the fact that some economies regard port services as having public character and there are several economies where only public sectors do such services. This fact complicate analyzing responses. This services are important to be available for international maritime transport suppliers on reasonable and non discriminatory terms and conditions. Consideration of reasons of restrictions is also encouraged bearing fully in mind the principles in the Maritime Mission Statement.

This page was last updated on 17 March 2000