Japan Post's status creates an unlevel playing field for private competitors in the insurance, banking and express delivery sectors, the U.S. ambassador to the World Trade Organization, Michael Punke, and EU acting ambassador John Clarke, told their Japanese counterpart, Shinichi Kitajima.
"We met jointly with Japan to underscore the deep level of concern that we both share regarding Japan's preferential treatment of Japan Post in light of Japan's national treatment commitments under the WTO," Punke said in a statement.
With assets of 300 trillion yen ($3.3 trillion), Japan Post is a major player in Japan's banking and insurance markets as well as in mail and courier services. As the holder of about a third of Japanese Government Bonds it is also a key partner in the government's debt management programmes.
But its future has become highly political, with Japan's Democratic Party-led government rolling back plans to privatise the institution but set to endorse a proposal to double deposit limits at its banking unit, raising the possibility of funds draining from other banks but making it easier for Japan to fund its growing debt.
Both the United States and European Union are neutral on whether Japan Post should be privatised, the U.S. statement said.
But they expressed disappointment that draft postal reform legislation submitted to Japan's Diet does not address U.S. and EU concerns about the preferential treatment that Japan Post currently receives compared to private-sector companies.
They also said they were worried by proposals to allow Japan Post's banking and insurance units to expand their operations before a level playing field is established.
One US and EU concern is that Japan Post's insurance operations have preferential access to the postal network, giving it an advantage over private financial companies.
Japan gives full national treatment to foreign companies in the insurance sector under WTO rules, and Japan Post's special treatment could breach those commitments, they said.
Japan Post's foreign competitors in the delivery sector include United Parcel Service, FedEx, TNT and Deutsche Post. (Reuters)
