1. Position of the Japanese Government and Possible impact of the REACH on Japanese trade relations with the EU

2. Export From Japan to EU (2002) billion US dollars

3. EU Japan Chemicals $4,844 million Industrial products (Article) 5,000 substances Chemical related Export from Japan to the EU $31,593 million (year 2002) 5,400 categories of items ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ ★ Major part of Japanese Chemical Related Export to the EU is in a form of “ ARTICLE ”

4. Impact of the REACH system Chemicals Testing cost for registration$ 250 - $2,500 million (depend on data sharing) Cost for substitution $ 830 million Articles Testing cost for registration $1,320 million Suffering from the change of users’ procurement $4,900 million * Above cost does not include the cost of “ time ” and “ procedure ”

5. Concerns on “Articles” 1.Measures described in Article 6 paragraph2 Notify the Agency of any substances contained in articles, if the producer or importer knows, or is made known, that the substance is likely released during normal use, even though this release is not an intended function of the article. Japanese Concerns Excessive burdens on companies compared to its expected results Reasons for Concerns In order to decide whether notification is necessary or not, each company has to confirm “ hazard ” and “ possibility of release ” regarding all chemical substances contained in articles.

6. Article 6.1 & 6.2 –If :“it meets the criteria for classification as dangerous in accordance with Directive 67/548/EEC” –If: “the producer or importer knows, or is made known, that the substance is likely to released ----” More Explanation on the Problems regarding “Substance in Articles” Importers of Articles have to check not only the substances already classified as dangerous but also all the rest of substances contained in the articles whether they meet the criteria of 67/548/EEC (if needed by new testing) even if there is no possible release Problem (1) Just referring “ Criteria ”, so for example, for “ phase in substance ” conformity assessment will be necessary (we prefer clear specification of substances & usage) (2) “ know ” or “ is made known ” implies each person ’ s subjective understanding (3) US TSCA and Japanese Law regulate articles only if the risk to use such a certain chemical substance becomes evident Effect

7. Concerns on “Articles” (continue) 2.Measures described in Article 6 paragraph 5, Article 34 paragraph 4 and Article 53 paragraph 2 Exempt substances from application of the regulation, in case that those substances have already been registered or authorized by an actor up the supply chain. Japanese Concerns - Unfair treatment between domestic articles and imported articles - Unnecessary duplication of testing on vertebrate animals. Reasons for Concerns There might be a case that imported articles are treated by less favorable manner regarding cost and procedures.

8. Example 1: Why are non-EU companies less favorable ? EU RegionNon-EU Region Supplier X producing chemical “ a ” Supplier B producing chemical “ b ” Supplier A producing chemical “ a ” Supplier Y producing chemical “ b ” Manufacturer Z Manufacturer C Importer D Export to EU Register Chemical “ a ” Register Chemical “ b ” Again Register Chemical “ a ” & “ b ” Not only the Importer D has to bear the cost for registration but also even if the Importer D can register chemical “ a ” and “ b ” by the support of Supplier A & B, it has to owe burden of “ time ” and “ procedures ” Attention ! Compete each other in the EU market Register Chemical “ a ” through sold representative Register Chemical “ b ” through sold representative

9. Example 2: Unnecessary duplication of testing on vertebrate animals EU RegionNon-EU Region Supplier X producing chemical “ a ” Supplier A producing chemical “ a ” Manufacturer Y Manufacture & Exporter B Importer C Export to EU Register Chemical “ a ” There is no clear indication in the regulation regarding the data sharing within the supply chain with regard to the “ Article ”. This means that Importer C or Exporter B will implement the same animal test again for identical substance Attention ! Compete each other in the EU market Implement Animal Test for Chemical “ a ”

10. Conclusion Article 6 paragraph 2 –Delete Article 6 paragraph 2, or –Suspend implementation of Article 6-2, until clear criteria for implementation will be established and the enough expertise to “made known” will be piled up in the authority of regulation Article 6 paragraph 5, Article 34 paragraph 4 and Article 53 paragraph 2 –Do not limit the exemption to “by an actor up the supply chain”, while taking into account the intellectual property right