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Role of the Competition Agency in Regulatory Reform

Opening Remarks by YASUCHIKA NEGORO
Chairman, Fair Trade Commission of Japan

Seminar on the Role of the Competition Agency in Regulatory Reform

3 December 1996

Tokyo

Good morning ladies and gentlemen, it is a great pleasure to be able to jointly host this seminar on the role of the Competition Agency on regulatory reform with the OECD and Fair Trade Commission of Japan. I would also like to extend my appreciation for being given the opportunity to make an address on such an occasion.

With the participation of Mr. Jenny, Chairman of the OECD Competition Law & Policy Committee, officials of competition agencies of the US, UK, France Australia, Italy and South Korea, as well as scholars, business leaders, and government officials of Japan. I'm sure that fruitful discussions will take place. I am confident that this seminar will help solicit the awareness for the role of the competition agency in regulatory reform between governments around the world. JFTC of Japan recognises the importance of the promotion of the OECD Regulatory Reform Project and expects that its achievements will greatly contribute to the promotion of regulatory reform in OECD countries including Japan.

JFTC's efforts for deregulation dates back to 1979 when recommendation of the Council on Competition Policy exempted or regulated sectors was made. Based upon this recommendation, JFTC was one of the first government agencies to take up the issue of deregulation by doing investigations on the economic implications of government regulations in the areas including agriculture, finance, transport, energy, distribution and telecommunications and by making public all views on the problems and the need for reviews.

In recent years, Japan has been placing high priority on the review of government regulation. To date, several Cabinet decisions have been announced to review these systems and in addition a third party organization to monitor the implementation of measures for deregulation was established in December 1994 under the name Regulatory Reform Committee. At the end of March 1995, the Deregulation Action Programme was announced by the Cabinet which will be revised for the second timer by the end of March next year. In view of these systems, it is therefore taking place as planned.

In order to make the Japanese society more open globally, and to reinforce the principles of self-responsibility as well as market principles, re-examining the appropriateness of government regulations from the viewpoint of competition policy is of important. In this context, JFTC's role has become greater than ever before finding it necessary for Competition Agency to be structured in a way that enables it to actively develop competition policies,organisational reform of JFTC took place last June. With the establishment of the General Secretariat and the Economic Bureau thereafter we now have an JFTC with significantly stronger policy making and co-ordination functions. Being aware that expertise on each restricted agencies is required fro regulatory view JFTC has been organising study groups of experts to evaluate the results of the studies and investigations on problems of government regulations in each restrictive sector since 1985. Results of discussions by these groups are complied into reports which are made public. Taking seriously the advice in these reports, JFTC has been approaching the relevant government agencies to promote regulatory review. The agency that is primarily responsible for the review of a given regulatory scheme or its administration is the one that has jurisdiction over that system. However, JFTC, a government body, independent from the regulatory agency making proposals from the viewpoint of competition policy has major implications. Results of analysis and advice by JFTC and its study groups are quite often quoted by opinion leaders promoting deregulation and are playing a major role in the process of deregulation. At this time in our country, the political circle regulating authorities in the industry are all calling for deregulation. However, although they may be supportive, of the general need for deregulation they suddenly become quite when a particular area is focused. In some cases, they turn against deregulation when it involves the area of their interest. In order to prevent deregulation from becoming merely superficial and to bring about drastic reform in the Japanese economy, wide support for the public for deregulation and active promotion of its benefits are indispensable. JFTC is thus putting much effort in public relations activities. In further relaxing government regulations going forward, we at JFTC believe that active discussions at OECD and exchange of experience between countries on successful examples and benefits of regulatory reform are crucial. As I mentioned the need for deregulation is stronger today than ever before. Thus it is timely that this seminar is held at this moment. In concluding, I hope that this gathering proves to be a major contributor in furthering deregulation in Japan and in other countries. I will be participating and listening to discussions but due to my other appointments, I will have to leave this room at this point in time. My apologies and thank you for your attention.



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