Consolidated TPP Text – Appendix D – Between Japan and the United States on Motor Vehicle Trade

Article 1

1. For the purposes of this Appendix:

Appendix Party means either Japan or the United States, as the case may be;

motor vehicle means any good classified under heading 87.03 or 87.04;

originating motor vehicle means any motor vehicle qualifying as originating under Chapter 3 (Rules of Origin and Origin Procedures); and

TBT Agreement means the WTO Agreement on Technical Barriers to Trade, as may be amended.

The definitions of the terms used in this Appendix contained in Annex 1 of the TBT Agreement, including the chapeau and explanatory notes of Annex 1, are incorporated into this Appendix and shall form part of this Appendix mutatis mutandis.

2. Article 2, Article 3 and Article 4 shall apply to the preparation, adoption and application of all technical regulations, standards and conformity assessment procedures of central government bodies that may affect trade in motor vehicles between the Appendix Parties, except as provided in paragraphs 4 and 5.

3. All references in this Appendix to technical regulations, standards and conformity assessment procedures shall be construed to include any amendments to them and any addition to the rules or the product coverage of those technical regulations, standards and procedures, except amendments and additions of an insignificant nature.

4. This Appendix shall not apply to technical specifications prepared by a governmental entity for its production or consumption requirements. These specifications are covered by Chapter 15 (Government Procurement).

5. This Appendix shall not apply to sanitary and phytosanitary measures. These are covered by Chapter 7 (Sanitary and Phytosanitary Measures).

6. No Party other than an Appendix Party shall have recourse to dispute settlement under Chapter 28 (Dispute Settlement) for any matter arising under this Appendix or to dispute settlement under Article 7 for any matter arising under this Agreement. No Appendix Party shall have recourse to dispute settlement under Chapter 28 (Dispute Settlement) for nullification or impairment within the meaning of Article 28.3.1(c) (Scope) for any matter arising under Article 6, Article 7 or Article 8 of this Appendix.

Article 2

1. Except in those urgent circumstances referred to in Article 2.10 and Article 5.7 of the TBT Agreement, for any technical regulation or conformity assessment procedure that would require a substantial change in motor vehicle design or technology, each Appendix Party shall provide an interval between the date of publication of the technical regulation or conformity assessment procedure and the date on which compliance with the measure becomes mandatory that is usually not less than 12 months.

2. Each Appendix Party shall ensure that its advisory committees and similar groups established by, or operated under the direction of, an agency of the central level of government to provide to it advice or recommendations by consensus that could result in regulations or other measures that would materially affect the certification, importation, sale, distribution or functioning of motor vehicles, are established and operated in a transparent manner.Footnote 1 To that end, each Appendix Party shall ensure that, in accordance with its laws and regulations:Footnote 2 Footnote 3

3.

4.

post-implementation review means an examination of the effectiveness of a technical regulation, standard or conformity assessment procedure after it has been implemented, including, as appropriate, an assessment of whether it achieves its stated objectives, the burden it imposes and its compatibility with other technical regulations, standards or conformity assessment procedures the Appendix Party has adopted.Footnote 8

Article 3

1. The Appendix Parties shall cooperate bilaterally, including in their activities under the Agreement concerning the Establishing of Global Technical Regulations for Wheeled Vehicles, Equipment and Parts which can be fitted and/or be used on Wheeled Vehicles (1998 Agreement), to harmonise standards for motor vehicle environmental performance and safety.

2. Each Appendix Party shall ensure that technical regulations related to motor vehicles are not prepared, adopted or applied with a view to or with the effect of creating unnecessary obstacles to international trade, to the extent provided for in Article 2.2 of the TBT Agreement. For this purpose, technical regulations related to motor vehicles shall not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create. Such legitimate objectives are, inter alia: national security requirements; the prevention of deceptive practices; and protection of human health or safety, animal or plant life or health, or the environment. In assessing such risks, relevant elements of consideration are, inter alia: available scientific and technical information, related processing technology or intended end-uses of products.

3. Neither Appendix Party shall prevent or unduly delay the placing on its market of a motor vehicle product on the ground that the product incorporates a new technology or a new feature which has not yet been regulated, unless the Appendix Party finds, based on scientific or technical information, that this new technology or new feature poses a risk for human health or safety, or the environment.Footnote 9 Footnote 10

4. When an Appendix Party decides to refuse the placing on its market or require the withdrawal from its market of a motor vehicle product on the ground that the product incorporates a new technology or a new feature posing a risk for human health or safety, or the environment, the Appendix Party shall immediately notify the importer of the product of its decision. The notification shall include all relevant scientific or technical information.

5. Each Appendix Party shall adopt or maintain efficient procedures for the temporary importation of motor vehicles incorporating new technologies or new features for the purposes of demonstration, display or road testing within its territory. Each Appendix Party shall facilitate the entry of such vehicles into its territory in accordance with these procedures regardless of whether they comply with otherwise applicable standards or technical regulations.Footnote 11

6.

U.S. FMVSS means Federal Motor Vehicle Safety Standard of the United States; and

initial inspection means the inspection that motor vehicles must undergo in order to be used for transport in Japan in accordance with the Road Vehicle Law.

Article 4

1. Japan shall not adopt any requirement under the Preferential Handling Procedure that is not applied on the date of entry into force of this Agreement with respect to Japan and the United States and that increases the burden, including the complexity and cost, for importers under the Preferential Handling Procedure, except for requirements related to new technical regulations or amendments to existing technical regulations that are prepared, adopted and applied in a manner consistent with Article 3.2 after that date, or for an increase of fees and charges commensurate with the cost of services rendered under the Preferential Handling Procedure.

2. Japan shall ensure that the Preferential Handling Procedure and its relevant regulations are adopted and applied in a manner that does not preclude the eligibility of motor vehicles imported under the Preferential Handling Procedure for any financial incentive measures of central government bodiesFootnote 14 with respect to motor vehicles.Footnote 15

3. For the purposes of this Article:

Preferential Handling Procedure means a simplified conformity assessment procedure conducted exclusively for imported motor vehicles up to a designated number for each type, in accordance with the notification of the Minister of Land, Infrastructure, Transport and Tourism of Japan.

Article 5

To the extent that an Appendix Party maintains and applies any laws or regulations at the central level of government with respect to zoning applicable to the establishment of distribution or repair facilities for motor vehicles, it shall ensure such laws or regulations are applied in a transparent and non-discriminatory manner.Footnote 16

Article 6

An Appendix Party may apply a transitional safeguard measure on originating motor vehicles from the other Appendix Party classified under heading 87.03 or 87.04, during the transition period only, in accordance with the provisions set out in Chapter 6 (Trade Remedies), with the following procedural modifications:

Article 7

1. For the purposes of this Article, the definitions set out in Article 28.1 (Definitions) shall apply, mutatis mutandis.Footnote 17

2. With respect to any matter described in Article 28.3 (Scope) that relates to motor vehicles, an Appendix Party may initiate the dispute settlement procedures set out in this Article in lieu of the procedures provided for in Article 28.4 (Choice of Forum), Article 28.5 (Consultations), Article 28.6 (Good Offices, Conciliation and Mediation), Article 28.7 (Establishment of a Panel), Article 28.8 (Terms of Reference), Article 28.9 (Composition of Panels), Article 28.10 (Qualifications of Panellists), Article 28.11 (Roster of Panel Chairs and Party Specific Lists), Article 28.12 (Function of Panels), Article 28.13 (Rules of Procedure for Panels), Article 28.14 (Third Party Participation), Article 28.15 (Role of Experts), Article 28.16 (Suspension or Termination of Proceedings), Article 28.17 (Initial Report), Article 28.18 (Final Report), Article 28.19 (Implementation of Final Report), Article 28.20 (Non-Implementation – Compensation and Suspension of Benefits) and Article 28.21 (Compliance Review).Footnote 18

3.

4.

5.

6.

7. All panellists shall meet the requirements set out in Article 28.10.1 (Qualifications of Panellists). An individual shall not serve as a panellist for a dispute in which that person has participated under Article 28.6 (Good Offices, Conciliation, and Mediation) as applied pursuant to paragraph 8.

8. Unless the Appendix Parties agree otherwise, Article 28.4 (Choice of Forum), Article 28.6 (Good Offices, Conciliation and Mediation), Article 28.12 (Function of Panels), Article 28.15 (Role of Experts), Article 28.16 (Suspension or Termination of Proceedings), Article 28.17 (Initial Report) and Article 28.18 (Final Report) shall apply, mutatis mutandis,Footnote 22 to panel proceedings under this Article, except that:

9. Unless the Appendix Parties agree otherwise, paragraphs 1 and 2 of Article 28.19 (Implementation of Final Report) shall apply, mutatis mutandis,Footnote 23 to the implementation of the final report.

10.

11. If a final report that contains a determination described in paragraph 10(a) is presented to the Appendix Parties under paragraph 8(d) on or after the date on which customs duties imposed by the complaining Appendix Party on originating motor vehicles from the responding Appendix Party classified under heading 87.03, Harmonized Tariff Schedule of the United States (HTSUS) 8704.21.00, HTSUS 8704.22.50, HTSUS 8704.23.00, HTSUS 8704.31.00, HTSUS 8704.32.00 or HTSUS 8704.90.00 have begun to be reduced in accordance with the complaining Appendix Party’s Schedule to Annex 2-D (Tariff Commitments), taking into account any delay of implementation of the period of the staged tariff elimination as a result of previous action taken pursuant to paragraph 14(a)(i), the complaining Appendix Party may increase the rate of customs duty on those originating motor vehicles:

provided that the complaining Appendix Party shall not suspend the application to the responding Appendix Party of benefits under this paragraph following a determination by the panel under paragraph 13.

12.

13. Unless the Appendix Parties agree otherwise, the panel shall reconvene as soon as possible after the date of delivery of the request under paragraph 12 and shall present to the Appendix Parties its determination of the level of benefits that the complaining Appendix Party may suspend no later than 90 days after it reconvenes. The panel shall determine the level of benefits that the complaining Appendix Party may suspend under paragraph 14(a)(ii) or (b), or the level of benefits for the purposes of taking action under paragraph 14(a)(i), as the sum of:

14. Following a determination by the panel under paragraph 13, the complaining Appendix Party may:

15. Suspension of benefits under paragraph 11 or paragraph 14(a)(ii) or (b) shall be a temporary measure and only be applied until the responding Appendix Party has eliminated the non-conformity or the nullification or impairment, or until a mutually satisfactory solution is reached.

16.

17.

18. The procedures set out in this Article shall apply beginning on January 1 of the second year after the date of entry into force of this Agreement with respect to Japan and the United States and ending on the date that is five years after the date on which customs duties imposed by the United States on originating motor vehicles from Japan classified under heading 87.03, HTSUS 8704.21.00, HTSUS 8704.22.50, HTSUS 8704.23.00, HTSUS 8704.31.00, HTSUS 8704.32.00 and HTSUS 8704.90.00 have been eliminated in accordance with the United States Schedule to Annex 2-D (Tariff Commitments), taking into account any delay of implementation of the period of the staged tariff elimination as a result of previous action taken pursuant to paragraph 14(a)(i), provided that the procedures shall apply to any dispute for which the final report of the panel under paragraph 8(d) was presented prior to that date.Footnote 28

19. The Appendix Parties shall review, on request of either Appendix Party, the operation and effectiveness of this Article five years after the date of entry into force of this Agreement with respect to Japan and the United States, and at such interval as the Appendix Parties decide thereafter.

Article 8

1. An Appendix Party may request in writing to initiate a process for consultations with the other Appendix Party with respect to any non-tariff measure that relates to motor vehicles that the other Appendix Party is considering proposing or has proposed, regardless of whether the other Appendix Party has published the non-tariff measure for comment.

2. The process for consultations shall take place no later than 10 days after the date of receipt of a request under paragraph 1, unless the Appendix Parties agree otherwise. The Appendix Party to which such a request is made shall afford the requesting Appendix Party an opportunity to raise issues and to make inquiries, provide the requesting Appendix Party with information to the extent possible, and hear the views of the requesting Appendix Party on the non-tariff measure referred to in paragraph 1.

3. If a request under paragraph 1 concerns a proposed non-tariff measure that is open for comment, the Appendix Party to which the request is made shall refrain from implementing the proposed non-tariff measure during the comment period, except where urgent problems of safety, health, environmental protection or national security arise.

4. If a non-tariff measure as to which a request has been made under paragraph 1 is adopted, and the requesting Appendix Party considers that, as described in Article 28.3.1(b) (Scope), the measure is inconsistent with an obligation of this Agreement, or that the measure nullifies or impairs benefits within the meaning of Article 28.3.1(c) (Scope), the requesting Appendix Party may so notify the other Appendix Party in writing. The notification shall include identification of the measure at issue and an indication of the legal basis for the complaint. The Appendix Party that made the notification may request the establishment of a panel pursuant to Article 7.4 at any time after the date that is 14 days after the date of receipt of the notification,Footnote 29 provided that, on request of either Appendix Party, the Appendix Parties shall enter into consultations with respect to the matter no later than 14 days after the date of receipt of the notification.

5. If the Appendix Parties hold consultations under paragraph 4, either Appendix Party may request additional consultations no later than 14 days after the date of receipt of the notification under paragraph 4. If such a request is made, the Appendix Parties shall hold additional consultations promptly thereafter. In that event, the Appendix Party that made the notification may request the establishment of a panel pursuant to Article 7.4 at any time after the date that is 30 days after the date of receipt of the notification.

6. Paragraphs 5 through 8 of Article 28.5 (Consultations) shall apply, mutatis mutandis,Footnote 30 to consultations under paragraphs 4 and 5.

Article 9Footnote 31

1. The Appendix Parties hereby establish a special bilateral Committee on Motor Vehicles (Committee), composed of representatives of the relevant authorities of each Appendix Party. The Committee shall:

2. The Committee shall meet on request of either Appendix Party and, unless the Appendix Parties decide otherwise, no less than once a year. Meetings shall take place in such locations and through such means as the Appendix Parties decide.

Date Modified: