International Trade Law in Japan

Overview of Japanese International Trade Law

Japan’s international trade law framework is built upon a complex interplay of domestic statutes, multilateral treaty obligations, and a rapidly expanding network of bilateral and regional trade agreements. The principal legislative instruments are the Customs Tariff Act (Kanzei Ho, Act No. 54 of 1910, frequently amended), the Foreign Exchange and Foreign Trade Act (Gaikoku Kawase oyobi Gaikoku Boeki Ho, Act No. 228 of 1949; “FEFTA”), the Export Trade Control Order (Yushutsu Boeki Kanri Rei, Cabinet Order No. 378 of 1949), and the Import Trade Control Order (Yunyu Boeki Kanri Rei, Cabinet Order No. 414 of 1949). Japan’s trade policy has undergone a fundamental reorientation since the 2000s: from a near-exclusive reliance on the multilateral rules-based system of the GATT/World Trade Organization (WTO) to an aggressive pursuit of free trade agreements (FTAs) and economic partnership agreements (EPAs). This shift reflects both the stagnation of the Doha Round and Japan’s strategic need to secure preferential market access for its export-oriented manufacturing and agricultural sectors.

Japan and the WTO

Japan has been a member of the GATT since 1955 and a founding member of the WTO (1995). Japan has appeared as a party in 29 WTO dispute settlement proceedings as of 2026 (16 as complainant, 13 as respondent), making it one of the more active users of the system. Notable cases include Japan — Taxes on Alcoholic Beverages (WT/DS8, 1996), in which Japan’s tax system was found to discriminate against imported spirits; Japan — Measures Affecting Consumer Photographic Film and Paper (WT/DS44, 1998), a Kodak complaint against alleged Japanese market access barriers for photographic film; and Japan — Countervailing Duties on Dynamic Random Access Memories from Korea (WT/DS336, 2007), in which Japan’s imposition of countervailing duties on Korean semiconductors was upheld in part and rejected in part. Japan has generally complied with adverse rulings, though implementation periods have occasionally extended for several years. Japan is also an active participant in WTO Trade Policy Reviews and has pledged support for the reform of the WTO’s dispute settlement system, particularly in the wake of the Appellate Body crisis.

Bilateral and Regional Trade Agreements

Japan’s pivot toward preferential trade liberalization began in earnest with the Japan-Singapore Economic Partnership Agreement (2002) and accelerated after the United States withdrew from the Trans-Pacific Partnership (TPP) in 2017. Japan assumed leadership of the remaining 11 parties and drove the agreement into force as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 30 December 2018. The CPTPP eliminates tariffs on over 99% of tariff lines among its members (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) and includes high-standard provisions on intellectual property, state-owned enterprises, labour rights, and digital trade. Japan’s ratification of the CPTPP required amendments to domestic agricultural laws and the removal of tariffs on previously protected products, including rice (through a minimum-access quota system), beef, and dairy.

The Japan-EU Economic Partnership Agreement (EU-Japan EPA), which entered into force on 1 February 2019, is the world’s largest bilateral FTA by combined GDP. The agreement eliminates tariffs on approximately 99% of EU imports into Japan (by value) over a transitional period of 15 years, and on 97% of Japanese imports into the EU. It also includes commitments on geographic indications (protecting over 200 EU food and beverage names and over 60 Japanese regional products), regulatory cooperation, and sustainable development. Japan has similarly concluded the Regional Comprehensive Economic Partnership (RCEP, entered into force 1 January 2022), which links Japan with China, South Korea, Australia, New Zealand, and the ten ASEAN member states. RCEP is less ambitious than the CPTPP in scope (it does not include disciplines on state-owned enterprises or labour standards) but is significant as the first trade agreement encompassing both Japan and China. Japan has also entered into bilateral EPAs with Switzerland (2009), India (2011), Peru (2012), Australia (2015), Mongolia (2016), and the United Kingdom (2021, replicating the EU-Japan EPA terms post-Brexit).

Trade Remedy Law

Japan’s trade remedy system is governed by the Customs Tariff Act and implemented by Cabinet Orders issued by the Ministry of Finance (MOF), with substantive investigation conducted by the Ministry of Economy, Trade and Industry (METI) and, for anti-dumping, the MOF’s Customs and Tariff Bureau. The system comprises three instruments: anti-dumping duties, countervailing duties, and safeguard measures.

Anti-Dumping Duties

Anti-dumping investigations are initiated upon application by a domestic industry or on the government’s own motion. The investigating authorities — the Ministry of Finance, in coordination with METI and the relevant line ministry — must determine (i) the existence of dumping (export price below normal value, calculated on the basis of domestic sales in the exporting country or, where those are unavailable, constructed value or a surrogate-country price), (ii) material injury to the domestic industry, and (iii) a causal link between the dumping and the injury. Japan has been a conservative user of anti-dumping measures: as of 2026, only 17 anti-dumping duties are in force, including measures against Chinese electrolytic manganese dioxide, South Korean stainless steel pipes, and Chinese-finished carbon steel flanges. The authorities apply the lesser-duty rule — the duty may not exceed the dumping margin if a lower duty would suffice to remove injury.

Countervailing Duties and Safeguards

Countervailing duty investigations follow a similar procedure, targeting subsidized imports. Japan has imposed countervailing duties in only three cases, all involving Korean DRAM semiconductors. Safeguard measures — temporary tariff increases or quantitative restrictions — are available under Article 19 of the Customs Tariff Act but have been invoked only twice since 1995 (for seaweed and for unroasted mackerel), reflecting Japan’s stated policy of reserving safeguards for “critical circumstances” consistent with the WTO Agreement on Safeguards.

Office of Trade Remedies of METI

The Office of Trade Remedies (Boeki Kyūsai Ka), established within METI’s Trade Policy Bureau, serves as the central coordinating body for trade remedy investigations. It conducts economic analysis, consults with domestic industries, and represents Japan in WTO dispute settlement proceedings involving trade remedies. The Office has also developed an outreach programme to assist SMEs in understanding and utilizing trade remedies.

Foreign Direct Investment Screening

Japan’s regime for foreign direct investment (FDI) screening was significantly tightened by the 2019 amendments to FEFTA, which entered into force in May 2020. The amendments broadened the scope of “designated business sectors” requiring prior notification to the Ministry of Finance and relevant line ministries. Pre-amendment, prior notification was required only for sectors related to national security, public order, and public safety. The 2020 revision added sectors related to critical infrastructure (electricity, gas, telecommunications, broadcasting, water supply, railways, oil), national security (arms, aircraft, nuclear, space, cybersecurity), and — most controversially — advanced technology (semiconductors, artificial intelligence, quantum computing, biotechnology). Foreign investors acquiring a 1% stake or more in a listed company in a designated sector must file a prior notification (reduced from the previous 10% threshold), and the government may order modification or cessation of the investment if it finds that it threatens national security, public order, or public safety. The revisions were driven by concerns about technology leakage to China and followed similar tightening in the United States (CFIUS reform) and the European Union.

Export Controls

Japan’s export control regime operates under FEFTA and the Catch-All Control system, which requires exporters to obtain METI approval for the export of dual-use goods and technologies to countries designated as “risk destinations” (currently Iran, North Korea, and — for certain items — China and Russia). The regime is aligned with the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies, as well as the Australia Group (chemical and biological weapons), the Missile Technology Control Regime (MTCR), and the Nuclear Suppliers Group (NSG). The Catch-All Control provision (Article 48 of FEFTA) requires prior approval for any export of goods or technologies that the exporter knows or has reason to know will be used in the development of weapons of mass destruction or conventional arms. Japan’s export control system is among the most rigorous in Asia and has been subject to periodic METI guidance updates in response to geopolitical developments, including the 2022 Russian invasion of Ukraine.

Conclusion

Japanese international trade law has evolved from a defensive, multilateralist posture to an assertive, multi-layered strategy that combines vigorous WTO engagement, an expanding network of FTAs and EPAs, a cautiously used but legally robust trade remedies regime, and tightly controlled FDI and export control mechanisms. The CPTPP and the Japan-EU EPA have repositioned Japan as a standard-setter in twenty-first-century trade governance, while the RCEP demonstrates its capacity to conclude agreements with politically diverse partners. The 2019 FEFTA amendments and the tightening of export controls reveal a growing securitization of trade policy — a trend likely to intensify as US-China strategic competition reshapes the global trading system and Japan navigates between its security alliance with the United States and its economic interdependence with China.