US Presses Japan on Beef, Insurance Trade Barriers

The United States pressed Japan on Monday to lower barriers to exports of U.S. beef and insurance services, but praised Tokyo for other steps it has taken to open its market.

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"Normalizing trade for U.S. beef and securing a level playing field for U.S. insurance providers are two issues that remain of serious concern," U.S. Trade Representative Ron Kirk said in a statement accompanying the annual results of the two country's regulatory review initiative.

"I look to Japan to ensure these concerns are addressed as quickly as possible," Kirk said.

Japan, which ran a $72.7 billion trade surplus with the United States in 2008, was the number one market for U.S. beef before it banned imports in December 2003, after the first case of mad cow disease was found in the United States.

It reopened the market in July 2006 to U.S. beef and beef products from cattle aged 20 months or younger, considered to be lower risk for the disease, formally known as Bovine Spongiform Encephalopathy.

But U.S. exporters have only recovered a small portion of the $1.4 billion in sales to Japan they enjoyed before the December 2003 mad cow disease occurrence.

The United States says Japan should allow beef imports from cattle of all ages, in line with international guidelines set by the World Organization for Animal Health.

Japan's insurance market is the the second largest in the world after the United States, with an estimated $300 billion in net premiums paid each year.

But the Japan Post Insurance dominates the country's insurance market, holding roughly one-third of the 189 million life and annuity insurance policies in force in Japan, according to a recent USTR report.

A U.S. trade official, speaking on condition he not be identified, told reporters Japan Post's "obligatory 10-year contract to sell insurance products through over 20,000 post offices in Japan" gives it a major advantage over other insurance companies.

There's also "a good bit of evidence that points to Japan Post Insurance not yet fully being in compliance" with rules and regulations that private insurers have to meet to compete in the market, he said.

Kirk praised other steps the United States' fourth largest trading partner and goods export market has taken to reduce regulatory barriers.

Those included:

• New steps to accelerate regulatory reviews for pharmaceuticals and medical devices.
• Making it illegal to knowingly download movies and music made from unauthorized Internet sources.
• Establishing a new import inspection framework to facilitate trade in U.S. horticultural products.
• Opening new opportunities for nonbank providers of electronic fund transfer services.
• Approving new food additives for imports.
• Strengthening Japan's competition law regime by boosting penalties against cartel leaders and extending the period for bringing action against anti-competitive acts.

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