Japan to Review Toys R Us Bid to Open Store

In a case seen as a test of alleged unfair barriers to entering the Japanese market, the government has agreed to consider a U.S. toy company’s move to open a store in the country, officials said today.

Toys R Us Inc. has announced plans to open a 53,800-square-foot discount store in Niigata, 160 miles northwest of Tokyo.

Local shopkeepers were strongly opposing the move, news reports said. Under Japan’s Large-Scale Retail Stores Law, designed to protect small retailers, they must be consulted before the opening of any large stores in their areas.

While some Japanese retailers have had to wait up to 10 years for permission to set up large new stores, “consideration is under way to shorten the maximum waiting period required under the law to two years,” said an official of the Ministry of International Trade and Industry.

The minister for international trade, Kabun Muto, told a news conference Tuesday that he urged his aides to work out plans to shorten the consultation process required under the law.

The ministry and local agencies in Niigata prefecture agreed Monday to start procedures for the store-opening plan by Paramus, N.J.-based Toys R Us, said the ministry official, speaking on condition of anonymity.

The official, of the ministry’s Industrial Policy Bureau, said local retailers will receive an advance explanation of the plan by mid-April.

The U.S. company then is to submit formal notification of the plan to the trade minister, and deliberations by a group of local retailers, consumers and scholars will follow, he said.

The Large-Scale Retail Stores Law has been among targets of U.S. officials seeking changes in what are seen as structural barriers that contribute to the United States’ $49-billion deficit in trade with Japan.

In addition to making entry to Japan’s market difficult for foreign retailers, it works against larger Japanese stores that would be more likely to carry foreign products, U.S. officials say.

Japan says U.S. economic practices such as widespread credit purchases also contribute to the trade imbalance.