ITA helps California Company Overcome Trade Barrier That Threatens Its Business Operations in Japan
February 13, 2012
(ITA)
The International Trade Administration’s (ITA) Market Access and Compliance
(MAC) Unit recently helped a California-based U.S. construction firm overcome a
foreign trade barrier that risked the company’s operations in Japan’s
multi-billion dollar construction market.
Why it Matters: Without ITA’s assistance, the firm would have been unable
to renew its construction license and continue its Japanese operations.
Successful resolution of this issue avoided a potential precedent that could
have affected other American construction firms’ ability to operate in the
Japanese market.
The Problem: The Japanese government asked the California-based
construction firm to produce a U.S. government-backed certificate confirming the
legal/mental competence of the firm’s board of directors before the GOJ would
renew its construction license. Without the license, the firm was told that it
could not operate in Japan. The requirement raised questions under the World
Trade Organization (WTO) rules about unfairly disqualifying qualified bidders.
The Solution: ITA specialists determined that the Japanese requirement
may have been inconsistent with existing WTO rules and bilateral trade
arrangements. Rather than utilizing the often costly and time consuming formal
WTO mechanisms, MAC leveraged its deep relationship with the Japanese
Government. The ITA team explained how the U.S. legal system differs from
Japan’s and confirmed that the United States does not issue the kind of
certificates being requested. The Japanese Government has since waived the
requirement for this certificate. Due to direct U.S. Government involvement, the
company has continued its operations in the Japanese construction market without
interruption. ITA is not aware of any other American company facing a similar
requirement.
Working closely with U.S. companies, MAC creates, expands, and defends market
access for U.S. goods and services overseas. “We promote policy that develops a
more favorable business climate for U.S. companies in global markets; we employ
commercial diplomacy to resolve trade barriers; and we leverage our bilateral
and multilateral trade agreements to ensure our trading partners live up to
their commitments so that our businesses can compete on a level-playing field.”
- Assistant Secretary for Market Access and Compliance, Michael C. Camuñez.
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