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Cablegate: Jftc May Look at Manufacturing Supplier Relationships In

VZCZCXRO9011
RR RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHNAG #0027 1850901
ZNR UUUUU ZZH
R 030901Z JUL 08
FM AMCONSUL NAGOYA
TO RUEHC/SECSTATE WASHDC 0236
INFO RUCPDOC/USDOC WASHDC 0018
RHMFIUU/DEPT OF JUSTICE WASHINGTON DC
RUEHKO/AMEMBASSY TOKYO 0243
RUEHKSO/AMCONSUL SAPPORO 0123
RUEHOK/AMCONSUL OSAKA KOBE 0155
RUEHFK/AMCONSUL FUKUOKA 0126
RUEHNH/AMCONSUL NAHA 0126
RUEHNAG/AMCONSUL NAGOYA 0253

UNCLAS NAGOYA 000027

SENSITIVE

SIPDIS

STATE PASS FEDERAL TRADE COMMISSION FOR INTERNATIONAL ANTITRUST
FOR DSHANAHAN
STATE PASS USTR FOR BEEMAN
JUSTICE FOR ANTITRUST DIVISION - CHEMTOB

E.O. 12958: N/A
TAGS: ECON PGOV JA
SUBJECT: JFTC MAY LOOK AT MANUFACTURING SUPPLIER RELATIONSHIPS IN
CENTRAL JAPAN

1. (SBU) Newly arrived Japan Fair Trade Commission (JFTC)
Central Japan Director Toshihiro Hara paid a courtesy call on
Nagoya PO on July 2. Looking beyond the recently concluded
Nagoya Subway bid-rigging case, Hara said his office plans to
focus on buyer-supplier relationships in the manufacturing
sector -- specifically whether major producers are using their
monopsony status to illegally squeeze their small and
medium-sized suppliers. Hara said he did not have any evidence
of wrongdoing, but the issue was of particular concern given the
apparent economic slowdown and the rapid increase in the price
of raw materials.

2. (U) Hara said his office is also looking closely at
misrepresentations in promotional materials for nursing homes, a
key concern and continuing source of complaints in light of
Japan's aging population.

3. (SBU) Hara said, that considering its workload and the
detailed work involved in investigations, his office is far
short of the optimal number of staff. The JFTC's Nagoya office
covers six Central Japan prefectures but has only 32 staff
members. He noted that overall there are about 150 people
working at the JFTC's seven regional offices and around 600 at
Tokyo headquarters. Hara explained JFTC strategy as having
Tokyo handle major issues drawing national attention, regardless
of where they occur in Japan, as a means of deterring cartel
activity nationwide. Despite the ongoing personnel shortage, he
said he appreciated the central government's policy of
increasing national JFTC staffing at the rate of about five
percent per year over the past five years, especially in the
face of government-wide staff reductions.

4. (SBU) Hara expressed an interest in increased exchanges with
USG officials and the American private sector on common
antitrust concerns. He added that he found the work of the
American Chamber of Commerce in Japan in highlighting market
access issues to be useful.

Comment
------------
5. (SBU) Although we are aware of no specific illegal activity,
based on our understanding of manufacturing sector supplier
relationships and discussions of the issue with many regional
firms, this is a matter that may be ripe for JFTC investigation.
Nevertheless, we expect the regional JFTC would be very
circumspect in taking on any of the Central Japan automotive (or
other sector) manufacturing kingpins in the absence of an
open-and-shut case.

ROCHMAN

© Scoop Media

 
 
 
 
 
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