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POLICY BRIEF 10-17
Turning Back the Clock: Japan’s Misguided Postal Law is Back on the Table
by Gary Clyde Hufbauer, Peterson Institute for International Economics
and Julia Muir, Peterson Institute for International Economics
June 2010
Revised October 2010
On May 31, 2010, a majority of the Lower House of the National Diet of Japan approved legislation that would reverse a decade's worth of effort to fully privatize key subsidiaries of Japan Post Holdings Co. Ltd. Besides postal services, the state-run postal system offers banking and insurance services, through Japan Post Bank (JPB) and Japan Post Insurance (JPI), respectively. These are the financial engines of Japan Post and were the units slated for privatization. Both subsidiaries have long received favorable government treatment, tilting the playing field against private banks and insurance firms, whether foreign or domestic. The government of Japan is in clear violation of its commitments under the World Trade Organization (WTO), and if the Upper House approves the legislation, Japan will reverse the efforts made by the United States and the European Union, as well as domestic private banks and insurance firms, to establish a level playing field. What's more, Japan risks having a formal WTO dispute brought against it.
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RELATED LINKS
Op-ed: Will the Crisis Create a New Japan? March 16, 2011
Op-ed: Japan Must Dip into Its Rainy Day Fund March 24, 2011
Speech: Seven Broad Lessons for the United States from Japan’s Lost Decade March 26, 2009
Policy Brief 04-6: What Went Right in Japan November 2004
Working Paper 03-9: It Takes More than a Bubble to Become Japan October 2003
Working Paper 07-4: Industrial Policy, Innovation Policy, and Japanese Competitiveness May 2007
