ITA Assists U.S. Chemical Manufacturers with Protecting Confidential Business Information in Japan
August 27, 2013
(ITA)
The International Trade Administration worked with the American Chemistry
Council (ACC), the Society of Chemical Manufacturers and Affiliates (SOCMA),
Baker Hughes, and five other companies to ensure that U.S. exporters of chemical
substances were able to protect confidential business information (CBI) under
Japan’s amended Chemical Substances Control Law (CSCL). As a result of combined
government and industry efforts, potential disruption to the U.S.’s roughly $10
billion chemical export market to Japan was successfully averted and U.S.
exporters are now able to protect their CBI in Japan.
Why it Matters
If U.S. exporters are unable to protect their CBI in foreign markets such as
Japan, those exporters face the difficult choice of whether to risk exposing
sensitive proprietary information that often gives a firm its inherent business
advantage or stop exporting. In addition, if exporters cannot protect CBI, other
U.S. and foreign manufacturers of component chemicals may often be unwilling to
continue to supply the downstream exporter/manufacturer, causing not only export
disruptions but potential disruptions to long-standing business relationships.
The Problem
Japan amended its Chemical Substances Control Law (CSCL) in 2009, creating a new
risk-based management system for chemicals that required companies to notify the
Japanese government of a substance’s chemical identity, quantity, and use
information each Japanese fiscal year. The original guidelines stated that
exporters of chemicals to Japan had to transmit reporting data through
private-sector Japanese importers, putting at risk CBI since importers have
relationships with many different companies, often including competitors. This
revision of the law also raised concerns about Japan adhering to its WTO
obligations requiring confidentiality of such information.
The Solution
From May 2010, Commerce and U.S. industry continually raised the issue with the
Japanese government in the form of meetings, letters, and exchanges of
proposals. Due to Commerce’s and industry’s continuing efforts, the Japanese
Ministry of Economy, Trade and Industry (METI) announced the details of a new
direct-reporting option in early June 2011, shortly before the close of the
first annual reporting deadline. As a result, chemical exporters are now able to
protect their CBI in Japan. METI also briefed U.S. industry on the CSCL
requirements in Washington, DC, in August 2011.
Working closely with U.S. companies, ITA creates, expands, and defends market
access for U.S. goods and services overseas through the Trade Agreements
Compliance Program. We promote policy that develops a more favorable business
climate for U.S. companies in global markets, employ commercial diplomacy to
resolve trade barriers, and leverage our bilateral and multilateral trade
agreements to ensure our trading partners live up to their commitments so that
American businesses can compete on a level playing-field.
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