As one of the people behind the disastrous (for the United States) Kodak-Fuji film case in the mid-1990s, this issue of non-transparent non-tariff trade barriers is something that continues in a number of sectors and is something that Japan will have to deal with if it really wants to join TPP. In the film case, the issue was a complex of business practices tolerated by the government that effectively closed the distribution system to foreign photographic film. (Talk about an anachronistic product!) None of the activities was a WTO violation. However, if you look at the way in which they all affected the market, the result was a barrier, albeit, again, not a violation of anything. The problem at the time (and there were many_ included an unwillingness by WTO staff and leaders to look at the Japan in a different way, the absolute lack of any knowledge by the staff or leaders of how things actually worked in Japan, and the absence of WTO disciplines that applied to such a situation.

I think the Japanese government is going to confront a different situation if they decide to go for TPP membership, especially if that decision comes after the group of 9 reach agreement (presumably by the end of
2011) and Japan will have to accept the framework or not join. That framework, assuming one believes all the rhetoric, will go far beyond traditional FTAs and include much more on the regulatory and domestic law side of things.

Please note that I am not trying to recreate a past US-Japan trade friction environment. The bilateral economic and trading relationship has, very fortunately, moved beyond this issue in many sectors, including my own (pharmaceuticals), but these non-tariff trade barrier issues do remain in a number of areas.

Ira Wolf