The Ministry of Economy, Trade and Industry (METI) will establish an information-sharing framework with U.S. and European Union authorities to more widely impose “countervailing duties” on products imported at unfair prices through subsidies from foreign governments. Anti-subsidy countervailing duties are permitted by the World Trade Organization as a means to remedy unfairly low prices on goods manufactured with government subsidies.

To encourage use of the framework, METI will draft application guidelines for Japanese companies that hope to have the government invoke anti-subsidy countervailing duties on their competitors’ products. The framework, which is designed to restore order in international trade, will look at Chinese steel and other products as those have been identified as “heavily subsidized.”

So far, Japan has little experience in using countervailing duties. The last time Japan imposed a countervailing duty was in 2006 on semiconductors exported by Hynix, a major South Korean manufacturer. Aside from the cumbersome application process, use of the framework has been hindered by the fact that many companies are unaware of the framework itself. Furthermore, insufficient disclosure of information on the part of foreign governments is said to have prevented Japanese authorities from accurately assessing the amount of the subsidies.

METI, which is responsible for implementing countervailing duties, hopes to improve the environment by working with one of its Industrial Structure Council subcommittees to prepare a detailed proposal by the beginning of September.

An international framework for cooperation among authorities in Japan, the U.S., the EU, Australia, and Brazil will be launched in the fall as well. In addition to this, Japan will hold regular meetings with the U.S. and the EU, which have used anti-subsidy countervailing duties extensively in the past, especially on Chinese steel.

METI will coordinate with each industry and look at Chinese and South Korean steel, aluminum, and chemical products, areas that have frequently been subject to countervailing duties in other countries.

Information from foreign authorities on foreign subsidies and countervailing duties will be shared with domestic companies so that the companies can start filing procedures for countervailing duties at an early date. The METI guidance for companies will be issued in FY2021. (Abridged)