The United States today plans to ask for a dispute panel at the World Trade Organization to hear its complaint that Japan discriminates against U.S. photo film imports, according to acting U.S. Trade Representative Charlene Barshefsky.
At the same time, U.S. officials will notify Japan that it intends to broaden a related complaint against that country's regulation of large retail stores, which the United States alleges adds to the discrimination against U.S. film, Ms. Barshefsky said.That second case has been brought under the WTO's two-year-old rules on services trade, and will be a test of the organization's efforts to expand its reach in this fast-growing area of trade.
Each complaint is expected to be judged by separate panels of trade experts who could side with the United States and call for reforms by Japan, or side with Japan and say that no WTO rules have been violated.
If Japan fails to implement any WTO judgment against it, the United States could be authorized to impose retaliatory trade sanctions on Japanese products.
The United States has charged, based on a complaint from Eastman Kodak Co., that a Byzantine network of laws, government policies and private practices in Japan deprived Kodak of billions of dollars in film sales in that country.
It is the first U.S. complaint brought under the tougher WTO rules adopted in 1994, and is seen by many in the United States as a test of the Geneva-based organization's ability to confront Japan's and other nation's more subtle barriers to imports.
Japanese officials, by contrast, say the case is unfounded. They charge that Kodak has co-opted the Clinton administration into pursuing it as a way to deter Fuji sales in the United States and third countries.
The United States delayed its request for a panel until today to avoid having the issue raised at a regularly scheduled meeting of WTO's Dispute Settlement Body on Sept. 27. A U.S. official said the motive was to avoid having the issue distract from other business.
Ms. Barshefsky said it was her expectation that the special meeting of the dispute body would hear the request for a panel in the film case around Oct. 3. Under the rules of the WTO, Japan could delay the formation of the panel until no later than the next Dispute Settlement Body meeting, later in October.
Kodak and Fuji have been fighting a public relations battle for the past year that has reportedly cost several million dollars in fees to lawyers and publicists.
Kodak fired the first salvo with a massive report on market barriers in Japan. This was countered a little while later with a report by Fuji that tried to undercut Kodak's data collection methods.
The case illustrates the challenge of judging and addressing competitive market barriers relative to more straightforward trade impediments like tariffs and quotas.