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WT/DS162/R/Add.1 Page 30

3.7

According to the United States, the JFTC further defined "tending to cause difficulties to other entrepreneurs" to include "a recognized possibility of such disruption"; an "actual disruption" is not necessarily required.  In FY 1998 the JFTC reported that it had issued one warning and 506 "cautions" to enterprises regarding "unjustified" low prices.  These rules apply to imported as well as domestic goods; in addition, the JFTC is now applying the Anti-Monopoly Act to crossborder transactions.98  Clearly, some provisions of Japan's antitrust law seem to be designed to protect competitors as well as competition.99

3.8

Japan maintains its view that there are clear and fundamental differences between antidumping laws and antitrust laws.100  Antitrust statutes protect competition, not competitors, and regulate competition within a country.101  In contrast, antidumping statutes protect domestic industries from the unfair practice of dumping by foreign competitors.  More particularly, antidumping regulates price differentials between sales in two countries.

3.9

Japan considers that antitrust laws have the primary and essential concern of protecting competition in the single domestic market.  "International price discrimination", or price differentials between goods in the exporting country's market and the importing country's market (here, the United States) does not fall within the scope of this concern.  Antitrust laws prohibit domestic price discrimination in order to protect competition in the domestic market only.  And, as discussed below regarding the United States' Article III:4 violations, this is true regardless of whether goods are imported or domestic.  A careful comparison of the differences between antidumping and antitrust laws demonstrates that the 1916 Act does not address antitrust concerns.

3.10

In the view of Japan, the 1916 Act clearly focuses on "international price discrimination"102; therefore, in no way can it be interpreted as an antitrust law.  It is very clear that the conduct addressed by the 1916 Act includes the essential concepts of dumping; therefore, the 1916 Act must comply with Article VI of the GATT 1994 and the provisions of the AntiDumping Agreement.

98 The United States refers to BNA, Int'l Trade Reporter, Vol.15 No. 26, p. 1131 (1 July 1998), entitled "US, Canadian Companies Involved in Cases Launched Under Japan's Antimonopoly Law".

99 The United States notes that a similar example is provided by the very recent decision of the German Supreme Court to uphold a German agency's ban on "unfair" US exports of consumer goods by the Lands End catalogue operation to Germany that were accompanied by the company's usual unconditional refund guarantee, a guarantee that the German authorities reportedly found "economically irrational."  The United States refers to The Washington Post ("Business Digest"), September 25, 1999; Associated Press, "US Retailer's Advertisements Banned," September 24, 1999.

100 In response to a question of the United States regarding whether there is a commonly accepted international standard for what constitutes an antitrust law, Japan notes that such a standard is being developed, as shown by the discussions on trade and competition in the WTO.  Whatever the precise terms of the standard eventually agreed upon, it is clear from the current state of discussions that the 1916 Act is a trade law and will not fall within the standard.  More importantly, there is a commonly accepted international standard for an antidumping law – Article VI of the GATT 1994 and the AntiDumping Agreement.

101 Japan considers that the United States attempts further to cloud this issue by calling attention to Japan's Anti-Monopoly Law.  First, the topic of how Japan determines and enforces its antitrust laws is irrelevant to the present proceeding.  Second, the US presentation is factually inaccurate.  Japan's law is designed to protect competition, not competitors.  Specifically, as stated in Section 1 of the Law, the Law is intended to "promote fair and freer competition, […] to assure the interests of Japan's consumers."  Moreover, it does not apply to "cross-border price discrimination" or dumping.  Also, for the record, Japan notes that in FY1998 the JFTC issued 599 cautions to enterprises regarding unjust low-price sales, not 506, as the US claims.

102 Japan refers to, e.g., "Overview and Compilation of U.S. Trade Statutes", US House of Representatives, US Government Printing Office (Washington: 1997), p. 65.

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