E N F O R C E M E N T   AND   C O M P L I A N C E

Click here for the Trade Agreement


What is this Agreement and what does it do?

Who benefits from this Agreement?

How can this Agreement help my company?

Can the U.S. Government help me if I have a problem?

How can I get more information?

What is this Agreement and what does it do?

The U.S.-Japan Port and Harbor Practices Agreement addresses problems faced by U.S. shipping lines using Japanese ports. It includes revised procedures for consultations between carriers and terminal operators regarding the employment and working conditions of port labor. Licensing procedures used by Japan's Ministry of Transport for port transportation business have been streamlined. These steps were taken against a broader background of a commitment by Japan to deregulate port transportation service - a commitment that is being closely monitored by the U.S. Government.

The Agreement consists of an exchange of letters dated November 10, 1997, between the Secretary of State and the Japanese Ambassador to the United States. It has no expiration date. The Agreement resulted from discussions between senior U.S. and Japanese maritime transport officials in October of 1997. It confirmed and expanded on measures set forth in a Memorandum of Consultation signed by the two governments in April of 1997.

Who benefits from this Agreement?

Any U.S. (or other foreign) shipping company using Japanese ports can benefit from the deregulation of Japan's port transportation services and specific provisions of this Agreement.

How can this Agreement help my company?

Consultation Procedures

In Japanese ports, a "prior consultation system" must be used at the request of a carrier if a change in its business operations could affect the employment and working conditions of port labor. In light of complaints by U.S. shipping companies of undue interference by the Japan Harbor Transportation Association (JHTA) in such consultations, the Japanese authorities agreed to reform the system in the following ways:

a) Guidelines have been established for the role of the JHTA in a "two party - two party" consultation i.e., a consultation between the carrier and the JHTA on the one hand, and the JHTA and the labor unions on the other. The Agreement states that consultations between a carrier and the JHTA shall not be used to allocate business, restrict competition or infringe on a carrier's freedom to select port transportation business operators. For major matters that seriously affect the employment conditions of port labor, such as changes in the working system at a container berth, prior consultations with the JHTA must be requested in writing with detailed explanations. For minor matters, such as the assignment of additional vessels or changes in calling ports, a less formal consultative process can be used. The JHTA cannot refuse requests from carriers for consultations, and it must process them expeditiously. It is obliged to inform the carrier promptly of the results of its consultations with labor (with adequate explanation if those consultations are unsuccessful). Disputes arising from the prior consultation system can be referred to the Ministry of Transport for arbitration.

b) An alternative process of prior consultation has been established in which a carrier intending to implement an operational change can consult directly with the terminal operator with whom it has a contract. The JHTA does not serve as an intermediary in this process. The carrier is required to give the terminal operator 30 days advance notice of an operational change. By the end of this period, the terminal operator will either implement the change or advise the carrier in writing of the "bona fide collective bargaining basis" that prevented its implementation. A carrier whose request for an operational change has been refused can ask the Ministry of Transport to investigate the matter to determine whether there was any intent by the terminal operator to allocate business or to infringe upon the carrier's freedom to select a terminal operator. Use of the alternative process of prior consultation by carriers has been limited because of the extensive influence of the JHTA over business conducted in Japanese ports.

Licensing Procedures

The changes in licensing procedures described in the U.S.-Japan Port and Harbor Practices Agreement were designed to facilitate the ability of large shipping companies to establish their own cargo handling operations in Japanese ports. Licenses are now normally approved within two months of receipt of application.

This Agreement applies to two types of licenses:

-Type I general contractor or terminal operator

-Type II cargo-handling (stevedoring) operator

The Ministry of Transport issues licenses to firms to provide other types of services in Japanese ports, including lighter transport, barge transport, tallying, surveying and certifying. Under the terms of the Memorandum of Consultation signed by the U.S. and Japanese Governments in April of 1997, however, U.S. firms can only apply for Type I or II licenses.

"Restricted licenses" are also issued for more limited operations. Restricted licenses allow operators to supply services only at certain wharves or for certain types of cargoes, or to serve specific clients. Terminal operators, however, must perform 70 percent of their work and they can only contract out 30 percent unless there is a significant cross-ownership of shares between the operator and the subcontractor. These rules significantly limit opportunities for subcontracting work in Japanese ports.

To date, no U.S. shipping line has chosen to apply for the types of business license covered by the Agreement. Significant capital investment and specialized knowledge are required to establish cargo handling operations in Japanese ports, given the complexities of labor relations and union practices. If your company is interested in offering cargo handling services in Japan, we strongly suggest that you consult with the United States Embassy in Tokyo as a first step in the process. The Embassy can serve as the focal point for advice on the various organizations with which relationships must be established in order to succeed.

Can the U.S. Government help me if I have a problem?

Yes. If your company is experiencing difficulties using Japanese port facilities and you believe that Japan is not complying with this Agreement, contact the Office of Trade Agreements Negotiations and Compliance's hotline at the U.S. Department of Commerce. The Center can help you understand Japan's obligations under the Agreement, and it can alert the appropriate U.S. Government officials to help you resolve your problem. With your concurrence, the U.S. Government can, if appropriate, also raise the particular facts of your situation with the Japanese government and ask Japanese officials to review the matter.

How can I get more information?

The complete text of the U.S.-Japan Port and Harbor Practices Agreement is available on the Office of Trade Agreements Negotiations and Compliance's web site.

If you have questions about this Agreement or how to use it, you can e-mail the Office of Trade Agreements Negotiations and Compliance (TANC), which will forward your message to the Commerce Department's Designated Monitoring Officer for the Agreement. You can also contact the Designated Monitoring Officer at the following address:

Designated Monitoring Officer

U.S.-Japan Ports and Harbors Agreement

Office of East Asia and APEC

U.S. Department of Commerce

14th Street & Constitution Avenue, N.W.

Washington, D.C. 20230

Phone: (202) 482 - 1147

Fax: (202) 482 - 3316

The Designated Monitoring Officer can also provide you with useful trade leads and contacts.

You can obtain additional information by visiting the following web sites in the International Trade Administration of the Department of Commerce:

The U.S. Commercial Service, American Embassy, Tokyo. The American Embassy in Tokyo helps U.S. companies enter the Japanese market and expand their sales there.

The following web sites also contain useful information:

The Transportation Division of the U.S. Department of State's Bureau of Economic and Business Affairs

The Maritime Administration of the U.S. Department of Transportation

TANC offers these agreements electronically as a public service for general reference. Every effort has been made to ensure that the text presented is complete and accurate. However, copies needed for legal purposes should be obtained from official archives maintained by the appropriate agency.