Japan Deplores U.S. Report Criticizing Its Building Market

Japan today deplored a U.S. ruling that unreasonable practices exist in the Japanese construction market and declared that the Japanese market has been “open and non-discriminatory.”

“It is regrettable that, though not having dared to decide to resort to the imposition of sanction, the (U.S. trade representative’s office) concluded that ‘unreasonable’ practices are identified in the Japanese construction market,” a statement issued by Foreign Ministry spokesman Taizo Watanabe said today.

The statement added: “The Japanese construction market has been open and non-discriminatory. Since systems and practices of the construction market differ from one country to another, the participation to a foreign and unfamiliar construction market needs considerable efforts.”

The statement followed an announcement by U.S. Trade Representative Carla Anderson Hills on Wednesday that a U.S. investigation showed that unreasonable practices were identified in the Japanese construction market.

She said, however, her office decided not to take action against Japan under Section 301 of the 1988 Trade Act because “significant progress” has been made in U.S.-Japanese construction market talks.

The clause allows the U.S. Administration to take sanctions against nations with unfair trade practices.

Under a bilateral agreement reached last year, the Japanese government agreed to open several major public works projects to U.S. construction firms and urged private contractors to open the private-sector market wider to foreign competitors.

The statement issued by Watanabe said “the Japanese side has implemented the special measures in a most sincere manner and the actual participation of the U.S. firms in the Japanese market has remarkably been increasing.”

It added that the Japanese government “earnestly hopes that (a) calmer attitude should be taken by the U.S. government and that further efforts should be made by the U.S. firms to enter into the Japanese market.”

Japan’s largest national daily Yomiuri Shimbun commented editorially today: “We are sorry to see such a (USTR) report published at a time when Japan-U.S. relations are not going well.”

“The United States’ method of treating bid rigging as a criminal offense is rather unique among developed countries,” it said. “And each country has the right to employ its own legal system to control the practice. However, if the method has little effect on suppressing bid rigging, we should review the system.”

The newspaper added: “If the companies believe that money can settle everything . . . antipathy will grow among the public, and Japan-U.S. relations will sorely deteriorate. Construction companies should take this fact to heart.”