Exchange of Letters on the Automotive Consultative Group

10/24/2001

Exchange of Letters on the Automotive Consultative Group

(Japanese letter)

Dear Ambassador Zoellick and Secretary Evans:

I am pleased to note that following a series of consultations between our two Governments, Japan and the United States have decided on how to deal with bilateral automotive issues based on the principles of the Japan-U.S. Economic Partnership for Growth (the Partnership) which was announced by the Prime Minister of Japan and the President of the United States on June 30, 2001.

The two Governments recognize the significant impact of globalization and technological advances, as well as increasing concerns regarding global environmental issues in this sector. With respect to the automotive sector, the two Governments also recognize the necessity to address the impact of these changes and to continue to address such issues as open markets and regulatory reform, as they arise, in line with the objectives of the Partnership. As such, Japan and the United States affirm the principle that vehicle manufacturers, auto parts manufacturers, and automotive aftermarket businesses should conduct business with each other and their suppliers based on the principles of free and open competition without adverse discrimination based on capital affiliation.

Given our shared objectives of addressing the issues which arise in this sector and ensuring open, transparent, and competitive markets, the two Governments will create a new, stand-alone Japan-U.S. Automotive Consultative Group (ACG). The ACG will meet annually or upon request of either Government and will deal with issues raised by either Government. The ACG will address trade and trade related issues including those relating to regulatory matters and ensuring competitive procurement practices among Japanese and U.S. automotive industries and their operations in both countries. The ACG will also address relevant policy issues that arise as a result of the changes in the sector as described above. The two Governments will avoid, to the utmost extent, overlap and duplication with other bilateral and multilateral fora. The ACG will annually review a series of data to be provided by Japan and the United States as outlined in the attachment to this letter. In light of the fact that the ACG's agenda may change, the Governments may determine that review of additional data sets is desirable. If this is the case, additional data will be provided by Japan and the United States, as mutually agreed.

The ACG will be co-chaired by the Ministry of Economy, Trade and Industry (METI) and the Ministry of Land, Infrastructure and Transport (MLIT) on the Japanese side and the U.S. Trade Representative and the U.S. Department of Commerce on the U.S. side and will include officials from other agencies and ministries as appropriate. The meetings will be chaired at the director level, unless either government requests that a meeting be chaired at more senior levels. Officials from select third countries may be invited to participate in the ACG as "observers" by mutual agreement by Japan and the United States.

In addition, Japan and the United States note that the Partnership includes important new mechanisms through which the two countries will address cross-cutting issues that affect various sectors. As such, Japan and the United States look forward to addressing cross-cutting issues impacting the automotive sector, such as foreign investment, transparency, competition policy, and corporate restructuring, within the relevant fora established under the Partnership.

Sincerely,

Shunji Yanai
Ambassador Extraordinary and Plenipotentiary of Japan

Attachment

ATTACHMENT

U.S.-JAPAN AUTOMOTIVE CONSULTATIVE GROUP
PROVISION OF DATA BY THE GOVERNMENTS

I. The Government of Japan will provide the following data for annual reviews:

A. The number and value of new foreign vehicles sold in Japan;

B. The number of new foreign vehicles sold in Japan by country of export and by manufacturer;

C. Official import statistics for auto parts;

D. Market conditions, including exchange rates and other data related to auto and auto parts industries.

II. The Government of the United States will provide the following data for annual reviews:

A. Official U.S. export and import statistics for motor vehicles;

B. Official U.S. export statistics and import statistics for auto parts; and

C. Other data related to auto and auto parts industries.

(U.S. letter)

Dear Ambassador Yanai:

I am pleased to note that following a series of consultations between our two Governments, the United States and Japan have decided on how to deal with bilateral automotive issues based on the principles of the U.S.-Japan Economic Partnership for Growth (the Partnership) which was announced by the President of the United States and the Prime Minister of Japan on June 30, 2001.

The two Governments recognize the significant impact of globalization and technological advances, as well as increasing concerns regarding global environmental issues in this sector. With respect to the automotive sector, the two Governments also recognize the necessity to address the impact of these changes and to continue to address such issues as open markets and regulatory reform, as they arise, in line with the objectives of the Partnership. As such, the United States and Japan affirm the principle that vehicle manufacturers, auto parts manufacturers, and automotive aftermarket businesses should conduct business with each other and their suppliers based on the principles of free and open competition without adverse discrimination based on capital affiliation.

Given our shared objectives of addressing the issues which arise in this sector and ensuring open, transparent, and competitive markets, the two Governments will create a new, stand-alone U.S- Japan Automotive Consultative Group (ACG). The ACG will meet annually or upon request of either Government and will deal with issues raised by either Government. The ACG will address trade and trade related issues including those relating to regulatory matters and ensuring competitive procurement practices among U.S. and Japanese automotive industries and their operations in both countries. The ACG will also address relevant policy issues that arise as a result of the changes in the sector as described above. The two Governments will avoid, to the utmost extent, overlap and duplication with other bilateral and multilateral fora. The ACG will annually review a series of data to be provided by the United States and Japan as outlined in the attachment to this letter. In light of the fact that the ACG's agenda may change, the Governments may determine that review of additional data sets is desirable. If this is the case, additional data will be provided by the United States and Japan, as mutually agreed.

The ACG will be co-chaired by the U.S. Trade Representative and the U.S. Department of Commerce on the U.S. side and the Ministry of Economy, Trade and Industry (METI) and the Ministry of Land, Infrastructure and Transport (MLIT) on the Japanese side and will include officials from other agencies and ministries as appropriate. The meetings will be chaired at the director level, unless either government requests that a meeting be chaired at more senior levels. Officials from select third countries may be invited to participate in the ACG as "observers" by mutual agreement by the United States and Japan.

In addition, the United States and Japan note that the Partnership includes important new mechanisms through which the two countries will address cross-cutting issues that affect various sectors. As such, the United States and Japan look forward to addressing cross-cutting issues impacting the automotive sector, such as foreign investment, transparency, competition policy, and corporate restructuring, within the relevant fora established under the Partnership.