Exchange of Notes on Trade Agreement between Japan and The United States of America

"The World and Japan" Database (Project Leader: TANAKA Akihiko)

Database of Japanese Politics and International Relations

National Graduate Institute for Policy Studies (GRIPS); Institute for Advanced Studies on Asia (IASA), The University of Tokyo

[Title] Exchange of Notes on Trade Agreement between Japan and The United States of America

[Place]

[Date] October 7, 2019

[Source] Ministry of Foreign Affairs of Japan

[Notes]

[Full text]

October 7, 2019

His Excellency

Mr. SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

Excellency,

In connection with the signing of the Trade Agreement between the United States of America and Japan (the Agreement), I have the honor to confirm the following understanding reached between representatives of the Government of the United States of America and the Government of Japan regarding the implementation of agricultural safeguard measures for Beef, Pork, WPC, Whey Powder, and Fresh Oranges provided for in paragraphs 9, 10, 12, 13, and 14, respectively, of Sub Section 4 (Agricultural Safeguard Measures) of Section B (Tariff Commitments of Japan) in Annex I (Tariffs and Tariff-Related Provisions of Japan) of the Agreement:

1. For the purposes of paragraph 9 of Sub-Section 4 of Section B in Annex I of the Agreement:

(a) If the agricultural safeguard measure is imposed, the United States and Japan shall enter into consultations to adjust the applicable safeguard trigger levels of that safeguard measure to higher levels. Notwithstanding paragraph 4 of Sub-Section 4 of Section B in Annex I of the Agreement, Japan shall notify the United States and provide the United States with relevant data concerning the measure immediately after the safeguard measure is imposed. The United States and Japan shall commence such consultations no later than 10 days after the safeguard measure is imposed, with a view to concluding them no later than 90 days after the safeguard measure is imposed.

(b) Further to paragraph 9(c), the United States and Japan shall consult to agree on the conditions for the application of the agricultural safeguard measure in the Agreement with consideration of certain modified conditions for the application of the corresponding agricultural safeguard measure in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), if the conditions under the Agreement are to be modified on the basis of the aggregate volume of imports of the originating agricultural goods referred to in paragraph 9 from the United States and imports of the corresponding agricultural goods from the parties, that are also original signatories, of the CPTPP.

2. For the purposes of paragraphs 10, 12, 13, and 14 of Sub-Section 4 of Section B in Annex I of the Agreement, if the agricultural safeguard measure is imposed twice within any consecutive three-year period, the United States and Japan shall enter into consultations to adjust the applicable safeguard trigger levels of that safeguard measure to higher levels. Notwithstanding paragraph 4 of Sub-Section 4 of Section B in Annex I of the Agreement, Japan shall notify the United States and provide the United States with relevant data concerning the measure immediately after the safeguard measure is imposed. The United States and Japan shall commence such consultations no later than 30 days after the safeguard measure is imposed twice within any consecutive three-year period, with a view to concluding them no later than six months after the safeguard measure is imposed.

I have the honor to propose that this letter, equally valid in English and Japanese, and your letter in reply, equally valid in Japanese and English, shall constitute an agreement between our two Governments, which shall enter into force on the date of entry into force of the Agreement.

Sincerely,

Ambassador Robert E. Lighthizer

United States Trade Representative

October 7, 2019

His Excellency

Ambassador Robert E. Lighthizer

United States Trade Representative

Excellency,

I am pleased to acknowledge your letter of October 7, 2019, which reads as follows:

"In connection with the signing of the Trade Agreement between the United States of America and Japan (the Agreement), I have the honor to confirm the following understanding reached between representatives of the Government of the United States of America and the Government of Japan regarding the implementation of agricultural safeguard measures for Beef, Pork, WPC, Whey Powder, and Fresh Oranges provided for in paragraphs 9, 10, 12, 13, and 14, respectively, of Sub-Section 4 (Agricultural Safeguard Measures) of Section B (Tariff Commitments of Japan) in Annex I (Tariffs and Tariff-Related Provisions of Japan) of the Agreement:

1. For the purposes of paragraph 9 of Sub-Section 4 of Section B of Annex I of the Agreement:

I have the further honor to confirm that my Government shares this understanding and to agree that your letter, equally valid in English and Japanese, and this letter in reply, equally valid in Japanese and English, shall constitute an agreement between our two Governments, which shall enter into force on the date of entry into force of the Trade Agreement between Japan and the United States of America.

Sincerely,

SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

October 7, 2019

His Excellency

Mr. SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

Excellency,

Immediately after the Agreement has entered into force, in accordance with its domestic law, the United States shall eliminate the 200 metric ton country specific quota for Japan and increase the "Other countries or areas" quota to 65,005 metric tons, allowing Japan access to that "Other countries or areas" quota.

Sincerely,

Ambassador Robert E. Lighthizer

United States Trade Representative

October 7, 2019

His Excellency

Ambassador Robert E. Lighthizer

United States Trade Representative

Excellency,

I am pleased to acknowledge your letter of October 7, 2019, which reads as follows:

Sincerely,

SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

October 7, 2019

His Excellency

Ambassador Robert E. Lighthizer

United States Trade Representative

Excellency,

The Ministry of Agriculture, Forestry and Fisheries of Japan (MAFF) shall introduce within the WTO TRQ for designated dairy products for general use, in accordance with the laws and regulations of Japan, an annual global tender administrated by Agriculture & Livestock Industries Corporation (ALIC) for 750 metric tons (MT) product base (5,000 MT whole milk equivalent) of skimmed milk powder, including non-fat dry milk, with a minimum 35 percent of protein content by weight, calculated on milk solids-not-fat basis.

I have the honor to propose that this letter, equally valid in Japanese and English, and your letter in reply, equally valid in English and Japanese, shall constitute an agreement between our two Governments, which shall enter into force on the date of entry into force of the Agreement.

Sincerely,

SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

October 7, 2019

His Excellency

Mr. SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

Excellency,

I am pleased to acknowledge the receipt of your letter of October 7, 2019, which reads as follows:

I have the further honor to confirm that my Government shares this understanding and to agree that your letter, equally valid in Japanese and English, and this letter in reply, equally valid in English and Japanese, shall constitute an agreement between our two Governments, which shall enter into force on the date of entry into force of the Trade Agreement between the United States of America and Japan.

Sincerely,

Ambassador Robert E. Lighthizer

United States Trade Representative

October 7, 2019

His Excellency

Ambassador Robert E. Lighthizer

United States Trade Representative

Excellency,

In connection with the signing of the Trade Agreement between Japan and the United States of America (the Agreement), I have the honor to confirm the following understanding reached between representatives of the Government of Japan and the Government of the United States of America with respect to implementation of paragraph 12(e)(i) (Agricultural Safeguard Measure for WPC) of Sub-Section 4 (Agricultural Safeguard Measures) of Section B (Tariff Commitments of Japan) in Annex I (Tariffs and Tariff-Related Provisions of Japan) of the Agreement. Japan shall implement paragraph 12(e)(i) in accordance with applicable laws and regulations of Japan to the extent that those laws and regulations are consistent with the international obligations that apply between Japan and the United States, including those under the Agreement and this letter and your letter of confirmation in reply.

1. Prior to imposing any agricultural safeguard measure under paragraph 12 of Sub Section 4 of Section B in Annex I of the Agreement, Japan shall undertake an assessment of whether either condition specified in paragraph 12(e)(i) has been satisfied.

2. The importation or projected importation by any Japanese state owned enterprise of skimmed milk powder other than that under:

(a) Japan's World Trade Organization quota for "designated dairy products for general use"; or

(b)a quota established under another trade agreement to which Japan is a party.

shall be deemed to demonstrate conclusively the existence of a domestic shortage of skimmed milk powder in Japan for the remainder of the Japanese fiscal year for the purposes of paragraph 12(e)(i)(A) of Sub-Section 4 of Section B in Annex I of the Agreement.

3. To ascertain whether the condition specified in paragraph 12(e)(i)(B) of Sub-Section 4 of Section B in Annex I of the Agreement exists, Japan shall undertake a comprehensive assessment of the market in Japan for skimmed milk powder, and in so doing shall consider, among other factors:

(a) historical records of and trends in Japanese production and stocks of skimmed milk powder;

(b) historical records of and trends in Japanese wholesale prices of skimmed milk powder; and

(c) any recent natural disaster or prolonged weather anomaly producing a demonstrable effect on the Japanese market for skimmed milk powder.

I have the honor to propose that this letter, equally valid in Japanese and English, and your letter of confirmation in reply, equally valid in English and Japanese, shall constitute an agreement between our two Governments, which shall enter into force on the date of entry into force of the Agreement.

Sincerely,

SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

October 7, 2019

His Excellency

Mr. SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

Excellency,

I am pleased to acknowledge the receipt of your letter of October 7, 2019, which reads as follows:

"In connection with the signing of the Trade Agreement between Japan and the United States of America (the Agreement), I have the honor to confirm the following understanding reached between representatives of the Government of Japan and the Government of the United States of America with respect to implementation of paragraph 12(e)(i) (Agricultural Safeguard Measure for WPC) of Sub-Section 4 (Agricultural Safeguard Measures) of Section B (Tariff Commitments of Japan) in Annex I (Tariffs and Tariff-Related Provisions of Japan) of the Agreement. Japan shall implement paragraph 12(e)(i) in accordance with applicable laws and regulations of Japan to the extent that those laws and regulations are consistent with the international obligations that apply between Japan and the United States, including those under the Agreement and this letter and your letter of confirmation in reply.

2. The importation or projected importation by any Japanese state owned enterprise of skimmed milk powder other than that under:

(a) Japan's World Trade Organization quota for "designated dairy products for general use"; or

(b) a quota established under another trade agreement to which Japan is a party,

(a) historical records of and trends in Japanese production and stocks of skimmed milk powder;

(b)historical records of and trends in Japanese wholesale prices of skimmed milk powder; and (c)any recent natural disaster or prolonged weather anomaly producing a demonstrable effect on the Japanese market for skimmed milk powder.

Sincerely,

Ambassador Robert E. Lighthizer

United States Trade Representative

October 7, 2019

His Excellency

Ambassador Robert E. Lighthizer

United States Trade Representative

Excellency,

The Ministry of Agriculture, Forestry and Fisheries of Japan (MAFF), or its successor, shall continue to publish, immediately after the results of each SBS tender become final, on an official government website the following information for each of two subtypes (brown and milled) of each type of rice (short-grain rice, medium-grain rice, and long-grain rice):

(a) the number of bids submitted and the total quantity represented by those bids;

(b)the number of successful bids and the total quantity represented by those bids;

(c)the weighted average purchase price paid by MAFF, or its successor, pursuant to bids that were successful; and

(d)the weighted average purchase price paid to MAFF, or its successor, pursuant to bids that were successful.

Sincerely,

SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

October 7, 2019

His Excellency

Mr. SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

Excellency,

I am pleased to acknowledge your letter of October 7, 2019, which reads as follows:

(a) the number of bids submitted and the total quantity represented by those bids;

(b) the number of successful bids and the total quantity represented by those bids;

(c)the weighted average purchase price paid by MAFF, or its successor, pursuant to bids that were successful; and

(d)the weighted average purchase price paid to MAFF, or its successor, pursuant to bids that were successful.

Sincerely,

Ambassador Robert E. Lighthizer

United States Trade Representative

October 7, 2019

His Excellency

Mr. SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America

Excellency,

1. The U.S. Department of the Treasury shall take final action on the rulemakings that propose to eliminate or liberalize standards of fill for wine (Docket No. TTB-2019-0004, Notice No. 182, July 1, 2019) and distilled spirits (Docket No. TTB-2019-0005, Notice No. 183, July 1, 2019). If those actions do not address standards of fill for wine in 180 milliliter, 300 milliliter, 360 milliliter, 550 milliliter, 720 milliliter, and 1.8 liter sizes and for distilled spirits in 700 milliliter, 720 milliliter, 900 milliliter, and 1.8 liter sizes, then the U.S. Department of the Treasury shall propose new rulemaking to allow standards of fill for wine in 180 milliliter, 300 milliliter, 360 milliliter, 550 milliliter, 720 milliliter, and 1.8 liter sizes and for distilled spirits in 700 milliliter, 720 milliliter, 900 milliliter, and 1.8 liter sizes, and shall take final action with respect to that proposal.

2. The United States shall, within 120 days of the entry into force of this understanding, and upon request thereafter, until a determination has been made on each name, provide an update on the process to consider, in accordance with its applicable laws and regulations, prohibiting the sale of certain products in the United States, as set out in paragraph 2 of the understanding reached on February 4, 2016, between the Government of the United States and the Government of Japan regarding product names. Pursuant to paragraph 3 of that understanding, the United States shall also initiate the process to consider, in accordance with its applicable laws and regulations, prohibiting the sale of Yamagata sake, Nadagogo sake, and Hokkaido wine in the United States, if it has not been manufactured in Japan in accordance with the laws and regulations of Japan governing the manufacture of Yamagata sake, Nadagogo sake, and Hokkaido wine, and the United States shall also provide an update on the process within 120 days of the entry into force of this understanding, and upon request thereafter, until a determination has been made on each name.

3. The U.S. Department of the Treasury shall continue ongoing efforts to streamline its process at the federal level for the approval of labels for alcohol beverages.

4. The United States shall review, as appropriate in light of its domestic law, the status of the treatment of Japanese shochu in U.S. markets of interest to Japan.

5. The United States shall implement its respective commitments in paragraphs 1, 2, and 3 according to its domestic laws and regulations.

6. For greater certainty, nothing in this letter shall be construed to create or confer any right relating to a trademark or a geographical indication.

7. If a proposed regulation is published in the Federal Register, all written and oral communications on that matter with the Government of Japan shall be undertaken consistent with the Administrative Procedure Act until a final action on that regulation is taken.

Sincerely,

Ambassador Robert E. Lighthizer

United States Trade Representative

October 7, 2019

His Excellency

Ambassador Robert E. Lighthizer

United States Trade Representative

Excellency,

I am pleased to acknowledge your letter of October 7, 2019, which reads as follows:

1. The U.S. Department of the Treasury shall take final action on the rulemakings that propose to eliminate or liberalize standards of fill for wine (Docket No. TTB-2019 0004, Notice No. 182, July 1, 2019) and distilled spirits (Docket No. TTB-2019-0005, Notice No. 183, July 1, 2019). If those actions do not address standards of fill for wine in 180 milliliter, 300 milliliter, 360 milliliter, 550 milliliter, 720 milliliter, and 1.8 liter sizes and for distilled spirits in 700 milliliter, 720 milliliter, 900 milliliter, and 1.8 liter sizes, then the U.S. Department of the Treasury shall propose new rulemaking to allow standards of fill for wine in 180 milliliter, 300 milliliter, 360 milliliter, 550 milliliter, 720 milliliter, and 1.8 liter sizes and for distilled spirits in 700 milliliter, 720 milliliter, 900 milliliter, and 1.8 liter sizes, and shall take final action with respect to that proposal.

3. The U.S. Department of the Treasury shall continue ongoing efforts to streamline its process at the federal level for the approval of labels for alcohol beverages.

4. The United States shall review, as appropriate in light of its domestic law, the status of the treatment of Japanese shochu in U.S. markets of interest to Japan.

5. The United States shall implement its respective commitments in paragraphs 1, 2, and 3 according to its domestic laws and regulations.

6. For greater certainty, nothing in this letter shall be construed to create or confer any right relating to a trademark or a geographical indication.

Sincerely,

SUGIYAMA Shinsuke

Ambassador of Japan to the United States of America