Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
While tariffs are generally low, Japan does have some non-tariff barriers that may impact commercial activity by possibly impeding or delaying the importation of foreign products into Japan. Although competition, U.S. and other foreign government pressure and other factors, have lessened the impact of these impediments, U.S. companies may still encounter non-tariff barriers in the following areas:
- Standards unique to Japan (formal, informal, de facto, or otherwise);
- A requirement in some sectors or projects for companies to demonstrate prior experience in Japan, effectively shutting out new entrants in the market;
- Official regulations that favor domestically produced products and discriminate against foreign products;
- Licensing powers in the hands of industry associations with limited membership, strong market influence, and the ability to control information and operate without oversight;
- Cross stock holding and interconnection of business interests among Japanese companies that disadvantage suppliers outside the traditional business group;
- Cartels (both formal and informal); and
- The cultural importance of personal relationships in Japan and the reluctance to break or modify business relationships.
Tools and methods to overcome these non-tariff barriers will depend greatly on the industry, the product or service’s competitiveness, and the creativity and determination of the firm’s management. The U.S. Commercial Service in Japan regularly advises U.S. companies, especially Small and Medium-sized Enterprises (SMEs), on how to overcome these barriers.
For a summary of Japan-specific trade barriers, please refer to the most recent USTR National Trade Estimate Report on Foreign Trade Barriers, available here. See pages 281-299.
U.S. exporters experiencing non-tariff barriers or other unfair trade practices in foreign markets can report problems online at http://tcc.export.gov.