Express Shippers Want Customs Changes in Japan

Express Association of America, which represents DHL, FedEx and UPS, said Japan has not lived up to its postal privatization commitments, and asked the Office of the U.S. Trade Representative to make sure that Japan Post is no longer advantaged compared to private shippers. Michael Mullen, executive director of EAA, testified on Dec. 10 in front of a trade panel that's seeking public views on how to shape negotiations for a U.S.-Japan free trade agreement.

Japan should also separate the physical release of goods from the duty and tax collection process, and provide for the immediate release of express shipments upon arrival, as long as advanced data and documentation are in. In his opening statement, he said that Japan Post is given preferential treatment in the customs clearance process, quarantine process and with regard to advance air cargo information.

The panel was interested in quantifying those issues. Mullen said it's hard to quantify how much Japan Post saves through these practices, but noted that for all goods under $1,800 -- most of express shipments qualify -- Japan's customs agency fills out the declarations, calculates tariffs and duties, and files the documents for Japan Post. "My members hire hundreds of people to perform those functions," he said.

He said that private shippers have to clear quarantine at the airport, while Japan Post gets that cleared at post offices around the country. Private shippers provide advance data three hours ahead of air cargo landings; Japan Post does not provide any advance data.

Mullen also said Japan should raise its de minimis limit of $90, but he added, "Under no circumstances should the United States suggest, as we did in the [U.S.-Mexico-Canada Agreement], it would lower its de minimis level as negotiating leverage." Mullen also said he doesn't think USTR should put a lot of pressure on Japan to raise its de minimis all the way to $800, that some increase would be fine. "We don't think this should be made into a major political issue in the negotiations, because it's not likely we'll get the results we want from that kind of a process," he said. Instead, USTR should focus on expedient release at the border.