EXCLUSIVE: U.S., EU Envoys Warn against Japan Postal Reform Plan

Tokyo, April 1 (Jiji Press)--Ambassadors to Japan of the United
States and the European Union have warned that Japan's new postal system
reform measures may violate international free trade rules, it was learned
Thursday.
In mid-March, U.S. Ambassador John Roos and EU Ambassador Hugh
Richardson jointly sent letters to four Japanese cabinet members saying if
the Japanese government actually implements reform measures Prime Minister
Yukio Hatoyama has given the go-ahead, it will likely violate the World
Trade Organization rules, informed sources told Jiji Press.
The four ministers are Chief Cabinet Secretary Hirofumi Hirano,
Foreign Minister Katsuya Okada, Postal Reform Minister Shizuka Kamei and
Internal Affairs and Communications Minister Kazuhiro Haraguchi.
At a meeting Tuesday, Hatoyama instructed relevant ministers to
promptly draw up a postal reform bill based on a draft plan announced by
Kamei and Haraguchi on March 24, which will dismantle the 10-year
privatization process for the Japan Post group initiated by former Prime
Minister Junichiro Koizumi.
The plan calls for raising the caps on per-customer deposits at
Japan Post Bank to 20 million yen from 10 million yen and on benefit
payments by Japan Post Insurance Co. to 25 million yen from 13 million yen.
The two firms are financial arms of Japan Post Holdings Co.
It also obliges the government to own more than a third of
outstanding shares in a new postal service holding company to be created
through a merger between Japan Post Holdings and its Japan Post Network Co.
and Japan Post Service Co. units. The financial units will become
subsidiaries of the new firm.
Roos and Richardson said that the new postal system reforms would
also run counter to the agreement to "fight protectionism" at the financial
summit meeting of the Group of 20 major economies in Pittsburgh in September
2009, according to the sources.
The Japanese government should establish a level playing field
between Japan Post group firms and private companies in the insurance and
banking sectors, Roos and Richardson said in the letter.
Under the privatization process that began in October 2007 by the
previous government led by the Liberal Democratic Party, Japan Post Holdings
was to take full control of the four subsidiaries first and the two
financial units were to be fully privatized by September 2017.