APPENDIX B - DATA ON BEST PROSPECTS FOR AGRICULTURE AND INDUSTRY SECTOR EXPORTS The best prospects for U.S. exporters of U.S. products and services including agricultural products are itemized below. Best prospects in industry sectors are ranked by the greatest estimated two-year growth in U.S exports (1993 - 1995). Of the 32 best prospects, 14 are in the "Big Emerging Sectors" of energy, environmental, health, information, transportation and infrastructure. However due to the appreciating yen between 1993 and 1994, the growth rate in yen terms is less. Best prospects in agricultural sectors are not ranked. The following is a summary, with 1995 estimated total market size and imports from the U.S. in millions of U.S. dollars: RANK SECTOR TITLE 1. AUT Automobiles/Light Trucks/Vans 110,296/4,063 2. ELC Electronic Components 61,900/6,500 3. FRA Franchising 108,400/5,300 4. FOD Processed Foods 291,283/12,995 5. CPT Computers and Peripherals 35,100/3,500 6. ICH Industrial Chemicals 198,200/6,570 7. MED Medical Equipment 13,135/2,283 8. ELP Electrical Power Systems 23,902/1,034 9. APS Automotive Parts & Accessories 132,800/894 10. BLD Building Products 97,970/3,800 11. GSV Direct Marketing Services 47,240/1,850 12. CSF Computer Software 3,500/470 13. APP Apparel 77,000/840 14. AIR Aircraft & Parts 11,700/4,300 15. ACE Arch./Eng./Constr. Services 860,490/190 16. DRG Drugs and Pharmaceuticals 59,783/1,136 17. MFI Marine Fisheries Products (Seafood) 41,505/2,456 18. BTC Biotechnology 6,500/110 19. PET Pet Foods and Supplies 3,712/422 20. PVC Pumps, Valves, and Compressors 4,032/395 21. PAP Paper and Paperboard 44,900/280 22. SEC Security and Safety Equipment 2,450/96 23. COS Cosmetics/Toiletries 13,559/183 24. TEL Telecommunications Equipment 16,714/711 25. LAB Laboratory and Scientific Instruments 4,980/360 26. SPT Sporting Goods and Recreational Equipment 18,300/490 27. JLR Jewelry 19,600/460 28. FLM Films, Videos and Other Recordings 7,970/370 29. MTL Machine Tools and Metalworking Equipment 3,015/157 30. FUR Furniture 25,095/263 31. DNT Dental Equipment 1,444/106 32. TXP Textile Products-Made Up 8,650/92 33. POL Pollution Control Equipment 11,580/16 unranked Beef 1,477/281 unranked Apples 1,028/0 unranked Rice 10,379/600 1 A. Rank of sector: B. Name of sector: Automobiles/Light Trucks/Vans C. Three-letter ITA industry sector code: AUT (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 105,686 110,296 111,366 E. Total local production 171,389 171,364 171,364 F. Total exports 74,687 71,583 71,469 G. Total imports 8,984 10,515 11,471 H. Imports from the U.S. 2,534 4,063 4,779 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Japan is the second largest motor vehicle market in the world. Eleven domestic manufacturers and over thirty foreign auto makers compete to sell over 6.3 million cars and trucks each year. No tariffs or quotas exist but some regulatory restrictions on imports exist in Japan although differences in language, culture, laws and high prices of land present special challenges to the importers. In 1993, imported car sales were up despite of an overall downturn in the Japanese market. Growth of sales of imported cars has been brisk over the past five years (albeit from an extremely low base). Notably, the success and market commitment of European automakers has encouraged U.S. and other carmakers to follow in their footsteps. More and more manufacturers are stepping up their investments and marketing activities in order to tap the vast potential of the Japanese market. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Subcompact/compact passenger cars (1,500 - 2,000 cc engines) 37,660 Major local and third-country competitors: Toyota Motor Corp. Japan Nissan Motor Co. Japan Honda Motor Co. Japan Mitsubishi Motor Japan BMW Germany A. Rank of sector: 2 B. Name of sector: Electronic Components C. Three-letter ITA industry sector code: ELC (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 56,390 61,900 65,400 E. Total local production 69,900 75,800 79,700 F. Total exports 25,710 27,800 29,800 G. Total imports 12,200 13,900 15,500 H. Imports from the U.S. 5,980 6,500 7,090 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The electronic components market in Japan is expected to grow about 8% in 1994. Major market segments such as semiconductors and Ics and flat panel display panels will show continued strong demand. The market for other passive components, however, will remain flat due to the overall slump in the consumer market. There are still some market entry barriers for foreign semiconductors causing market access issues in Japan. The semiconductor market is expected to grow 10-15% annually, and the LCD display panel market will continue to grow 30-35% annually until 1996. It is a tough market for U.S. suppliers but this market is one of the largest electronics markets in the world. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Semiconductor/Integrated Circuits (IC) 30,200 Liquid Crystal Display Devices/Panels 11,800 Major local and third-country competitors: NEC Japan Hitachi Japan Fujitsu Japan Toshiba Japan Mitsubishi Japan A. Rank of sector: 3 B. Name of sector: Franchising C. Three-letter ITA industry sector code: FRA (millions of U.S. dollars) 1993* 1994 1995 (actual) (estimated) (forecast) D. Total sales 98,500 108,400 114,900 E. Sales by local firms 93,800 103,100 109,200 F. Sales by local firms 93,800 103,100 109,200 G. Sales by foreign-owned firms 4,700 5,300 5,700 H. Sales by U.S.-owned firms 4,700 5,300 5,700 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: 1993 statistics are estimates. Statistics for "U.S. owned firms" are for Japan Franchise Association members only; U.S. ownership of "U.S.-owned firms" in most cases is less than 50%. Sales by services franchisees showed a 1,900% increase between 1974 and 1992. The franchise industry is still showing good growth during a slowdown in the economy. Although double-digit growth rates can no longer be expected in services franchising, various U.S. services, such as children's services, real estate, business (management training, etc.) are expected to provide significant opportunities. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Franchising of services 12,000 Major local and third-country competitors: Mos Food Service Japan Fujiya Japan Seven-Eleven Japan A. Rank of sector: 4 B. Name of sector: Processed Foods C. Three-letter ITA industry sector code: FOD (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 270,043 291,283 304,523 E. Total local production 232,637 251,711 262,660 F. Total exports* 2,006 2,086 2,170 G. Total imports* 39,412 41,658 44,033 H. Imports from the U.S.* 12,520 12,995 13,489 I. Exchange rate used (YEN/$) 111 107 107 *No breakdown is available in Ministry of Finance records concerning which foods are processed and which are unprocessed. J. Comments: Due to over-regulation under the Food Sanitation Law, approximately 70% of processed foods available in U.S. are not allowed to be sold in the Japanese market. The Food Sanitation Law is the biggest hinderance to increased U.S. food exports to Japan and prime reason why keep consumer food prices remain high. Japanese people spend 2 to 3 times more money on processed foods than Americans. Raw materials, labor costs, packaging costs, and transportation are all higher in Japan than the United States, and so are food prices. Transportation costs of processed foods from the west coast of the United States to Tokyo are generally less than the inland transportation costs of moving the same item from Tokyo to other Japanese locations. U.S. suppliers have 98% of Japan's import market for vitamins. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Health Foods 5,864 Food Supplements based on vitamins 542 Major local and third-country competitors: Ito Ham Co., Ltd., Prima Ham Co., Ltd.. Marudai Co., Ltd. Yuki-jirushi Co., Ltd., Nippon Ham Co., Ltd., Ajinomoto Co., Ltd., House Shokuhin Co., Ltd. (Japan) A. Rank of sector: 5 B. Name of sector: Computers and Peripherals C. Three-letter ITA industry sector code: CPT (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 34,340 35,100 36,390 E. Total local production 44,600 45,600 46,500 F. Total exports 14,100 14,700 14,900 G. Total imports 3,840 4,200 4,790 H. Imports from the U.S. 3,100 3,500 4,050 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Trade barriers on U.S. mainframe and PC's exist particularly in the government procurement market. The computer and peripheral systems market is expected to grow 2-3% in 1994. The PC and multimedia PC/workstation subsector market will grow 15-20% annually by 1996. As in the United States, PC and workstation shipments in Japan continued to grow in 1993, while sales of mainframes and mini computers were down. That trend will continue. Japanese competitors will also focus on client/server systems and parallel processing systems as to which U.S. suppliers have a stronger market position in Japan. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Workstations 3,420 Personal Computers 11,050 PC/Computer Peripherals 19,200 (Hard and Floppy Drives/Printers/Displays) Major local and third-country competitors: NEC Japan Fujitsu Japan Toshiba Japan A. Rank of sector: 6 B. Name of sector: Industrial Chemicals C. Three-letter ITA industry sector code: ICH (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 198,300 198,200 201,000 E. Total local production 200,000 197,100 197,100 F. Total exports 19,100 18,800 18,000 G. Total imports 17,400 19,900 21,900 H. Imports from the U.S. 5,750 6,570 6,570 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The market grew in dollar terms due to the appreciation of the yen despite a 5 percent drop in Japanese production. As a result, forecasts made in 1993 predicted a smaller market than the actual figures revealed. U.S. produces have a competitive advantage in the production of pharmaceuticals, additives for plastics and rubber, and agrochemicals derived from manufacturing efficiency and a broad product range. Major foreign competitors are European countries, such as Germany and France. The Japanese industry is under increasing export pressure from China and India in specialty chemical intermediates. Due to the appreciation of the yen, exports will be decreasing and imports from U.S., China and India will keep expanding. The Japanese chemical industry may have to implement major re-structuring in next few years. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Basic petrochemical products 7,000 Inorganic chemicals 11,500 Intermediates for Pharmaceuticals 3,500 Photo-sensitive products 9,600 Additives for plastics and rubber 1,300 Major local and third-country competitors: Germany France Taiwan Korea A. Rank of sector: 7 B. Name of sector: Medical Equipment C. Three-letter ITA industry sector code: MED (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 12,162 13,135 13,750 E. Total local production 11,784 12,727 13,000 F. Total exports 3,059 3,304 3,200 G. Total imports 3,437 3,712 3,950 H. Imports from the U.S. 2,114 2,283 2,600 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The Japanese government is committed to expand public spending and to improve social infrastructure including health and welfare facilities. This will increase demand for capital equipment, including CT's and MRI's, and products for Japan's aging population. Japanese physicians and other medical professionals look to the U.S. for innovative and advanced products, although some criticize the lack of good after-sales services by U.S. suppliers. Note: 1993 statistics are based on estimates by industry sources, as official statistics for 1993 are not yet available. In-vitro diagnostics are classified as pharmaceuticals under the Pharmaceutical Affairs Law, and are not included in the above statistics. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Diagnostic imaging equipment: 3,335 Surgical and orthopedic instruments and supplies: 1,775 Artificial organs and assist devices: 1,500 Major local and third country competitors: Toshiba, Hitachi, Shimadzu, Nihon Kohden Japan Siemens, Dornier Germany Philips Netherlands A. Rank of sector: 8 B. Name of sector: Electrical Power Systems C. Three-letter ITA industry sector code: ELP (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 22,669 23,902 24,765 E. Total local production 22,057 22,814 23,717 F. Total exports 0 0 0 G. Total imports 612 1,088 1,048 H. Imports from the U.S. 581 1,034 996 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Japan's ten electric utility companies are expected to make significant investments in power generating capacity through the remainder of the decade to meet increasing Japanese power demand. Increased investment in development of diversified sources of power including the expansion of nuclear power facilities is expected. The ten electric companies participate in the Government of Japans's "Business Global Partnership Initiative" and have expressed their intention to take appropriate actions to promote foreign products in the Japanese market, which should result in sharply increased imports. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Generators and Turbines: 10,000 High Voltage Power Transmission Lines and Equipment: 6,000 High voltage Electrical Transformers: 3,000 Power Distribution Transformers, Lines and Equipment: 3,000 Major local and third-country competitors: Hitachi, Ltd. Japan Mitsubishi Heavy Industries Japan Fujitsu Electric Co., Ltd. Japan Toshiba Corporation Japan Siemens Germany A.B.B. Germany Voest Alpine Austria A. Rank of sector: 9 B. Name of sector: Automotive Parts & Accessories C. Three-letter ITA industry sector code: APS (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 136,228 132,800 132,000 E. Total local production 163,288 160,000 160,000 F. Total exports 29,003 29,100 30,000 G. Total imports 1,943 1,900 2,000 H. Imports from the U.S. 745 894 1,073 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Reflecting the decrease of domestic auto production and sales in 1992 and 1993, JFY 1994 auto parts production is expected to decrease as well. Currently the United States has the largest share of the Japanese imported auto parts market (about 38 percent in 1993), but total imports represented only 1.2 percent of the value of locally produced auto parts. New opportunities for auto parts exports to Japan generated in the wake of former President Bush's 1992 visit and the Japan automotive framework negotiations present U.S. suppliers with a substantial opportunity to penetrate this difficult market sector. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): High technology parts & equipment, including turbochargers, catalytic converters, emission control devices, car navigation systems, and air-bag related products 20,000 Major local and third-country competitors: Nippondenso Japan Calsonic Japan Akebono Brake Japan Zexel Corp Japan Toyoda Gyosei Japan A. Rank of sector: 10 B. Name of sector: Building Products C. Three-letter ITA industry sector code: BLD (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 94,000 97,970 102,540 E. Total local production 81,000 84,000 88,000 F. Total exports 1,000 1,030 1,060 G. Total imports 14,000 15,000 15,600 H. Imports from the U.S. 3,600 3,800 3,900 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The above market figures include wooden and non-wooden building products such as aluminum windows and flat glass, for which statistics are now available. Although the number of newly built homes in Japan increased 6 percent in 1993 and will likely maintain a high growth rate in 1994, most industry specialists believe that the average price of building products used for newly built homes declined. In addition, the commercial building market is still in difficulty because of the recession. This reflects a flat market for building products over the last few years. However, general economic conditions in Japan are gradually recovering, and the building products market will recover its healthy growth rate over the next few years. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Particle Boards and Fiber Boards 900 Imported Prefabricated Houses 135 Major local and third-country competitors: Daiken Corporation Japan Eidai Co., Ltd. Japan Matsushita Electric Works, Ltd. Japan Asahi Woodtec Corp. Japan Dantani Sangyo Co., ltd. Japan A. Rank of sector: 11 B. Name of sector: Direct Marketing Services C. Three-letter ITA industry sector code: GSV (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total sales 46,280 49,400 51,400 E. Sales by local firms 43,780 46,700 48,600 F. Sales by local firms 43,330 46,700 48,600 G. Sales by foreign-owned firms 2,500 2,700 2,800 H. Sales by U.S.-owned firms 2,000 2,200 2,300 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Despite the current recession -- in which department stores and supermarket chains suffer from a negative growth in sales -- direct marketing is still showing positive growth, although its pace has slowed. Apparel is the best selling item through catalog sales, followed by furniture and household items, food, accessories, and precious metals. Imported products represent approximately 10% of the mail order market. Health foods, foundation underclothes, and haircare items are popular, especially through door-to-door sales. Major U.S.-based multi-level marketing firms have had great success in the Japanese market. List of the most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Apparel 4,400 Major local and third-country competitors: Otto/Sumisho Germany/Japan Cecille Japan A. Rank of sector: 12 B. Name of sector: Computer Software C. Three-letter ITA industry sector code: CSF (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 2,800 3,500 4,260 E. Total local production 2,360 2,970 3,620 F. Total exports 0 0 0 G. Total imports 440 530 640 H. Imports from the U.S. 380 470 580 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Computer software products include packaged software and customized software. The market for personal computer software accounts for about 60% of the whole. Higher growth is expected to continue for the future for PC software products. PC software will remain the leading position in the Japanese software market. The custom software market for mainframes, mid-range computers, and workstations will have an annual growth rate of 5-7% during 1994 to 1996. Packaged software will have annual growth rate of 20%. When downsizing and open network systems are diffused in Japan, the software market would be extended larger. Software for CAD systems will grow steadily with workstations in conjunction with growth of electronics market. U.S. suppliers have competitive strength in the Japanese CAD software market. The computer software market in Japan could expand up to double its current market size by 1996. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): PC packaged software: 2,300 CAD (Computer Aided Design) software: 450 Major local and third-country competitors: NEC Japan Fujitsu Japan A. Rank of sector: 13 B. Name of sector: Apparel C. Three-letter ITA industry sector code: APP (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 70,117 77,000 80,467 E. Total local production 61,208 67,860 71,209 F. Total exports 456 460 456 G. Total imports 9,365 9,600 9,715 H. Imports from the U.S. 727 840 903 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Although the average annual growth rate for apparel in Japan has been only a few percent for the past several years, imports from the U.S. have been increasing rapidly with the growth rate ranging from 25 - 50% annually. This is because of the boom of "American Casual Fashion" in Japan. The U.S. is the third largest exporting country, following China and South Korea. Japan's apparel market is: Men's: 23%; Women's: 47%; Children's: 8%; Other kinds of apparel: 15%; Fashion-related items: 7%. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Men's Apparel 9,457 Women's Apparel 19,325 Major local and third-country competitors: Renown Co., Ltd. Japan Kashiyama Co., Ltd. Japan Celine S.A. France Christian Dior France Givenchy S.A. France A. Rank of sector: 14 B. Name of sector: Aircraft & Parts C. Three-letter ITA industry sector code: AIR (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 11,583 11,700 11,800 E. Total local production 7,731 7,800 7,800 F. Total exports 897 900 900 G. Total imports 4,749 4,800 4,900 H. Imports from the U.S. 4,269 4,300 4,400 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The number of U.S. manufacturing firms in the aircraft sector is limited and virtually all have offices in Japan. These companies are constantly evaluating the balance between competition and cooperation with Japanese manufacturers involved in aerospace. The number of cooperative efforts among U.S., European, and Japanese firms has increased markedly in recent years. While the U.S. still maintains a commanding lead in aircraft and components, demonstrated by the U.S. bilateral trade surplus in this sector, Japanese aircraft exports have been expanding in recent years. Another important competitive factor is the entry of European manufacturers, whose aggressive marketing efforts pose a possible threat to the long-standing dominance of U.S. products in the Japanese market. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Military aircraft 6,358 Civil aviation jet aircraft 1,800 General aviation aircraft 200 Major local and third-country competitors: Aerospatiale France Kawasaki Heavy Industries Japan Airbus Industries France/United Kingdom/Germany British Aerospace United Kingdom Deutsche Aerospace Germany A. Rank of sector: 15 B. Name of sector: Architectural/Engineering/Construction Srvs C. Three-letter ITA industry sector code: ACE (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total sales 810,000 860,490 889,650 E. Sales by local firms 810,500 860,800 890,000 F. Sales by local firms 810,500 860,800 890,000 G. Sales by foreign-owned firms 100 190 250 H. Sales by U.S.-owned firms 100 190 220 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The reform of the Japanese bidding system for public works projects opens up the world's largest construction market, valued at close to $1 trillion/year. The best market opportunities for U.S. goods and services exist in the areas of urban development planning, architectural design, civil- engineering consulting, building construction, and construction materials. The strongest competition will be from Japanese firms, in particular the top 10 design/consulting firms, the top 50 general contractors, and the top 50 building material suppliers. Third company competitors include Korean and Chinese general contractors and ASEAN building material suppliers. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Public construction projects to be procured through Action Plan procedures 19,000 Major local and third-country competitors: Shimizu; Hasegawa Komuten; Taisei Japan Ohbayashi; Kajima; Kumagai Japan Daewoo; Dongbu; Hanil Development Korea Hyundai Engineering and Construction Co. Korea Kuk Dong Construction Co. Korea Samsung Engineering & Construction Co. Korea SSangyong Engineering and Construction Co. Korea GTM International S.A. France Foster Associates; Ove Arup & Partners U.K. 16 B. Name of sector: Drugs and Pharmaceuticals I. Rank of Sector C. Three-letter ITA industry sector code: DRG (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 55,355 59,783 61,576 E. Total local production 50,475 54,513 56,148 F. Total exports 452 488 503 G. Total imports 5,330 5,756 5,929 H. Imports from the U.S. 1,052 1,136 1,170 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The Japanese government hopes to reduce pharmaceuticals' 30% share of total medical expenditures in Japan's universal health care by promoting the dispensing of drugs by pharmacies and by limiting reimbursement prices. However, government pricing policy gives premium reimbursement prices to breakthrough and innovative drugs, an area where U.S. companies are considered to be R&D leaders. Products for an aging population, including diagnostics and therapeutic drugs for elderly diseases, have high growth potential. In-vitro diagnostics are classified as pharmaceuticals under the Pharmaceutical Affairs Law, and are included in the above statistics. As reimbursement drug prices were reduced by 8.1% in 1992 and another 6.6% in 1994, the above statistics (including 1993) figures are estimates which reflect revisions in earlier estimates as to future market size. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Drugs for cardiovascular diseases 9,850 Drugs for central nerve system diseases 6,300 Drugs for digestive diseases 6,000 In-vitro diagnostics 2,000 Major local and third-country competitors: Takeda Chemical, Sankyo, Yamanouchi Japan Rhone-Poulenc Rorer France Hoechst Germany Sandoz Switzerland A. Rank of sector: 17 B. Name of sector: Marine Fisheries Products (Seafood) C. Three-letter ITA industry sector code: MFI (millions of U.S. dollars) 1993* 1994 1995 (actual) (estimated) (forecast) D. Total market size: 37,909 41,505 43,784 E. Total local production: 25,203 26,538 26,936 F. Total exports: 1,223 1,057 879 G. Total imports: 13,929 16,024 17,727 H. Imports from the U.S.: 2,365 2,456 2,459 I. Exchange rate used (yen/$): 111 107 107 J. Comments: Demand in this sector remains basically strong. Total Japanese domestic production quantities in 1993 -- including aquaculture -- is estimated to have decreased by 10 percent from the 1992 level to approximately 8.1 million metric tons. Total production value, however, is estimated to be unchanged. This is attributed to decreases in catch quantities for low-value species such as sardines and Alaska pollock, but increases in high-value species such as tuna and squid. Japanese imports of marine products are expected to increase as Japanese landings from ocean fisheries continue to slowly decline. Japanese aquaculture production is estimated to grow very slowly due to limited space. *Note: 1993 production is estimated. Actual data available in 1995. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Cod/Alaska pollock roe 556 Oysters 67 Major local and third-country competitors: Cod/Alaska pollock roe: Russia, North Korea, Poland Oysters: Japan Miyagi Prefecture Fishery Cooperative Association Mie Prefecture Fishery Cooperative Association Hiroshima Oyster Fishery Cooperative Association Republic of Korea New Zealand A. Rank of sector: 18 B. Name of sector: Biotechnology C. Three-letter ITA industry sector code: BTC (millions of U.S. dollars) 1993 1994 1995 (estimated) (estimated) (forecast) D. Total market size 4,300 6,500 8,400 E. Total local production 4,200 6,350 8,200 F. Total exports 0 0 0 G. Total imports 100 150 200 H. Imports from the U.S. 70 110 160 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: There are no official statistics available for biotechnology market in Japan, and many informal estimates have been used until recently. According to a report released in June 1993 by the MITI-affiliated Bioindustry Promotion Council, consisting of representatives from the government, industry and academia, Japan's market for biotechnology products, including pharmaceuticals, is expected to reach 3 trillion yen (approximately $28 billion at the current YEN107/$1 rate of exchange) by the year 2000. Industry sources state there is currently few significant import of biotechnology products other than pharmaceuticals and laboratory instruments used for biotechnology research and development. Note: The above statistics exclude pharmaceuticals. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Pharmaceuticals (not included in above statistics) 7,000 Foods 4,000 Chemicals 1,800 Agriculture, forestry and fisheries 1,300 Biotechnology support equipment 650 Major local and third-country competitors: Mitsubishi Kasei Corporation; Ajinomoto Co., Inc. Japan Suntory Limited; Toyobo Co., Ltd. Japan Hoechst AG Germany Akzo, N.V. Netherlands Imperial Chemical Industries U.K. Institut Meriux, Pasteur France A. Rank of sector: 19 B. Name of sector: Pet Foods and Supplies C. Three-letter ITA industry sector code: PET (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 3,398 3,712 4,083 E. Total local production 3,250 3,554 3,909 F. Total exports 800 884 972 G. Total imports 948 1,042 1,146 H. Imports from the U.S. 384 422 464 I. Exchange rate used (Yen/$) 111 107 107 J. Comments: With the change of Japanese lifestyles in the early 1970's, largely as result of cultural influence from North America and Europe, pets are now considered almost family members in many households. The major reasons for the steady increase in pets are: (1) fewer family members per family; and (2) longer life span for Japanese. Total domestic production of pet food in Japan was 203,161 tons in 1988. By 1992, this figure rose to 273,887 tons, a growth rate of a modest 35% in five years. In contrast, during the same period, imports increased from 35,870 tons to 211,074 tons, or 5.9 times. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): High quality pet foods: 3,062 High quality pet supply: 1,021 Major local and third-country competitors: Maruha Japan Japan Pet Food Japan Ajinomoto General Foods Japan Nisshin Pet Food Japan A. Rank of sector: 20 B. Name of sector: Pumps, Valves, and Compressors C. Three-letter ITA industry sector code: PVC (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 4,105 4,032 4,250 E. Total local production 7,390 7,513 7,813 F. Total exports 4,048 4,241 4,369 G. Total imports 763 760 806 H. Imports from the U.S. 389 395 419 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: PVC's are basic equipment for machinery and industrial facilities from households to nuclear power plants. Current demand is slow due to the machine industry depression, but the industry is expected to begin recovery in the latter half of this year. U.S. suppliers hold a top 47% share in the total imports of this category in 1993. Valves accounted for 46% of the total import of PVC's, pumps 32%, and compressors 22%. A variety of Asian countries have also been active in the Japanese market in low grade level products. No import barriers exists in this sector. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Valves 1,998 Pumps 1,275 Compressors 976 Major local and third-country competitors: Ebara Corp. Japan Kitz Corp. Japan Danfoss A/S Denmark Babcock-Bosig AG Germany A. Rank of sector: 21 B. Name of sector: Paper and Paperboard C. Three-letter ITA industry sector code: PAP (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 42,200 44,900 47,700 E. Total local production 41,700 44,220 46,910 F. Total exports 1,150 1,125 1,125 G. Total imports 1,650 1,800 1,890 H. Imports from the U.S. 250 280 320 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The total market size is expected to grow by 2% over the next two years. Imports, however, are expected to have higher growth rates due to the U.S.-Japan paper agreement and increasing acceptance by Japanese customers. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Wood free paper (high grade printing and writing paper) 10,000 Milk cartons 350 Major local and third-country competitors: Finland Canada A. Rank of sector: 22 B. Name of sector: Security and Safety Equipment C. Three-letter ITA industry sector code: SEC (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 2,050 2,450 2,950 E. Total local production 2,430 2,950 3,580 F. Total exports 500 650 820 G. Total imports 120 150 190 H. Imports from the U.S. 75 96 140 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Market demand for security systems is expected to grow steadily and rapidly in line with the increase in the number of buildings, 24 hours stores, parking lots, and game centers in urban areas. The most popular security systems in Japan are observation video camera and systems, which market is dominated by Japanese electronic systems manufacturers. Demand for video observation (monitor) camera systems will continue to increase 30% annually for the coming five years for pachinko game parlors, karaoke shops, 24 hours stores, ATM and cash dispenser machines, etc. The access control and ID systems markets are expected to grow steadily 10-15% in 1994. High tech based electronic ID systems such as non-touch access will gradually be introduced to the market. The home security market in Japan is still in its infancy. Several large security service companies dominate the household security market with on-line alarm systems. The market for safety detectors such as gas sensors, smoke detectors, etc. is steadily growing 5-10% annually. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Monitor Video Camera Systems: 1,100 Security Control Systems: 750 Access Control & ID systems: 280 Burglar Sensor Systems: 250 Safety sensors: 650 Major local and third-country competitors: Ikegami, Matsushita, NEC Japan A. Rank of sector: 23 B. Name of sector: Cosmetics/Toiletries C. Three-letter ITA industry sector code: COS (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 12,837 13,559 13,807 E. Total local production 12,605 13,338 13,604 F. Total exports 243 277 305 G. Total imports 475 498 508 H. Imports from the U.S. 148 183 201 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Japanese cosmetics production modestly increased by 2% in 1993. Consumers' desire to pursue beauty continues to be strong, while price-consciousness is coming increasingly to the fore. This trend may benefit mid-priced American cosmetic products of good quality. Japanese consumers' receptiveness to imported cosmetics is high. U.S. cosmetics exports to Japan in 1993 showed a remarkable increase of 60% from 1992. The increase is attributable mainly to sales of a large U.S. manufacturer which recently entered the Japanese market with quality products and a unique marketing system. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Skin care cosmetics 4,850 Makeup cosmetics 2,822 Major local and third-country competitors: Shiseido Japan Kanebo Japan Clarins France Numerous companies France Numerous companies United Kingdom A. Rank of sector: 24 B. Name of sector: Telecommunications Equipment C. Three-letter ITA industry sector code: TEL (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 15,878 16,714 17,216 E. Total local production 22,318 23,384 24,086 F. Total exports 7,628 7,914 8,151 G. Total imports 1,188 1,244 2,811 H. Imports from the U.S. 679 711 732 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: U.S. exports to Japan account for 57% of Japan's total import market. U.S. firms are competitive in communications satellites, earth station equipment, B-ISDN network equipment, internetworking equipment such as routers, frame relay/ATM switches, and "multi-media" software and hardware, including CATV. Japanese companies are so weak that already some major Japanese telecom companies are establishing cooperate alliances with U.S. companies. In contrast, European competitors are such strong competitors to U.S. firms that they can defeat U.S. firms in important tenders. Deregulation will expand potential markets in these areas for U.S. companies. The GOJ estimates that its NII (National Information Infrastructure) spending for the NII project up to the year 2010 will be 123 trillion yen. Note: Communications satellites are not included in Japan's import statistics as they are delivered in orbit and do not clear customs. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Internetworking equipment including routers, frame relay switches, ATM switches, etc. 100 "Multi-media" software and hardware, including CATV 70 Communications satellites and related equipment 2,000 Major local and third-country competitors: NEC, Hitachi, Fujitsu, Oki Electric (Japan) Ericsson (Sweden), British Aerospace (U.K.), NOKIA (Finland) Newbridge (Canada), Aerospatiale (France) Deutsche Bundespost, Siemens (Germany) A. Rank of sector: 25 B. Name of sector: Laboratory and Scientific Instruments C. Three-letter ITA industry sector code: LAB (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 4,830 4,980 5,070 E. Total local production 4,540 4,710 4,800 F. Total exports 760 780 810 G. Total imports 470 510 540 H. Imports from the U.S. 330 360 380 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Japan's high level of R&D spending and capital investment for quality control manufacturing will support the comparatively high rate of growth for market of laboratory and scientific instruments in Japan. U.S. suppliers continue to maintain relatively strong competitive position in this field. U.S. origin instruments with specialized applications are particularly competitive. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Analytical instruments 1,400 Electric test and measuring instruments 2,600 Major local and third-country competitors: Shimadzu Corp. Japan Hitachi Japan Nihon Bunko Japan Yokogawa Japan VG U.K. Oxford U.K. Cambridge U.K. Carl Zeiss Germany A. Rank of sector: 26 B. Name of sector: Sporting Goods and Recreational Equipment C. Three-letter ITA industry sector code: SPT (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 17,100 18,300 18,800 E. Total local production 14,760 15,775 16,200 F. Total exports 960 1,025 1,050 G. Total imports 3,300 3,550 3,650 H. Imports from the U.S. 460 490 500 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Due to the recession in Japan, the Japanese sporting goods market has not grown for the last few years. The golf products market and ski products market, the two most important subsectors in the Japanese sporting goods market, have shrunk since 1991. However, average working hours continue to decline in Japan, and Japanese people have more free time. They are now more interested in inexpensive leisure activities. For example, outdoor activities such as camping are now the most popular form of leisure in Japan, and the outdoor products market has been maintaining a high growth rate. The total Japanese sporting goods market will recover its healthy growth rate gradually over the next several years. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Camping equipment 560 Snow-boards 90 Major local and third-country competitors: Mizuno Corporation Japan Asics Corporation Japan Descente, Ltd. Japan Goldwin Inc. Japan Hit-Union Co., Ltd. Japan A. Rank of sector: 27 B. Name of sector: Jewelry C. Three-letter ITA industry sector code: JLR (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 19,291 19,600 19,528 E. Total local production 15,283 15,555 15,756 F. Total exports 54 55 56 G. Total imports 4,062 4,100 4,200 H. Imports from the U.S. 444 460 480 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: "Jewelry" includes 341 different types of precious metals (including worked gems) and 3,451 different kinds of personal ornaments and decorative articles (excluding precious metals and gems). The Japanese market is very important for U.S. suppliers, particularly in the area of diamonds, precious metal jewelry and costume jewelry. Japan is the largest market for diamonds in the world, and the U.S. share of Japan's total imports is over 11%. For articles of jewelry, the U.S. share of Japan's total imports is 20%, followed by South Korea (15%), France (13%) and Taiwan (8%). List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Costume Jewelry 5,600 Diamonds 3,193 Precious Metal Jewelry 928 Major local and third-country competitors: Hattori Seiko Co., Ltd. Japan Nakagawa Jewelry Co., Ltd. Japan Chatani Jewelry Co., Ltd. Japan Tres Belle Italy Clio Blue France A. Rank of sector: 28 B. Name of sector: Films, Videos and Other Recordings C. Three-letter ITA industry sector code: FLM (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 7,700 7,970 8,150 E. Total local production 7,480 7,750 7,940 F. Total exports 310 360 400 G. Total imports 530 580 610 H. Imports from the U.S. 350 370 380 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Total local production statistics above include revenue of distributors of movies, sales of videos by members of the Japan Video Association, and sales of music recordings (CD's and tapes) by members of the Recording Industry Association of Japan. The receptivity of American music and video titles in general by the Japanese public is excellent, with distributors earning $416 million in revenues from foreign films (90% from U.S. films) in 1993, representing 64% of total film distributor revenue in Japan. Total revenue derived from foreign titles of video cassettes and laser discs in 1993 was US $700 million (U.S. titles represent 90%), representing 28% of the total market. The sales of video cassettes is presently divided 60-40 between sales for rentals and sales to consumers, while the share for sales to consumers, especially for animations and films for children, is rising. However, due to a substantial drop in laser discs for karaoke, sales of video discs decreased 26% in 1993. The $1 billion sales of foreign titles of music recordings produced locally (65% of which are U.S. titles) represents 25% of the total sales of audio discs and tapes. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Compact digital audio discs 5,000 Major local and third-country competitors: Producers of animated movies on video cassette Japan A. Rank of sector: 29 B. Name of Sector: Machine Tools and Metalworking Equipment C. Three-letter ITA industry sector code: MTL (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 3,603 3,015 3,289 E. Total local production 6,977 6,834 7,622 F. Total exports 3,745 4,156 4,716 G. Total imports 371 336 383 H. Imports from the U.S. 152 157 178 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The current machine tool market is in a depressed state. Forecasts made in 1993 by the machine tool industry and market research firms as to 1993 market recovery were overly optimistic. However, the market is expected to recover beginning in the latter half of 1994 or early 1995. Machine tools are called mother machines because they are used to make other machines. Therefore sales should increase with economic recovery. Potential demand is also expected to increase with the economic recovery because of the need to address the pending problems of cost, environment, and labor shortage. Imports from the U.S. in 1993 were $152 million, which accounted for 41% of the total imports of metal cutting machine tools into Japan. No import barriers exists in this sector. List of most promising subsectors within the sector, along with estimated 1955 total market size of each subsector (US $ millions): Machine tools 2,578 Metalworking equipment 710 Major local and third-country competitors: Mitsubishi Heavy Industries Japan Klingelnberg Germany Traub A.G. Germany Reishauer A.G. Switzerland A. Rank of sector: 30 B. Name of sector: Furniture C. Three-letter ITA industry sector code: FUR (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 24,146 25,095 25,371 E. Total local production 22,999 23,858 24,097 F. Total exports 367 342 342 G. Total imports 1,514 1,579 1,616 H. Imports from the U.S. 250 263 269 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: The appreciation of the yen together with the growing reputation of U.S. furniture for value and quality are increasingly encouraging Japanese furniture buyers to look at U.S. furniture. U.S. products are desired in a wide variety in terms of price, style, and design. Some key furniture retailers are challenging the inefficient multiple layer distribution system by launching direct sales to end- users. This simplified distribution system -- which allows consumers to obtain imported quality furniture at affordable prices -- will benefit U.S. furniture suppliers. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Household furniture 15,887 Office and institutional furniture 3,925 Major local and third-country competitors: Kosuga & Co., Ltd. Japan Maruni Co., Ltd. Japan Cassina S.P.A. Italy Numerous companies Italy Numerous companies United Kingdom A. Rank of sector: 31 B. Name of sector: Dental Equipment C. Three-letter ITA industry sector code: DNT (millions of U.S. dollars) 1993 1994 1995 (estimated) (estimated) (forecast) D. Total market size 1,337 1,444 1,488 E. Total local production 1,122 1,212 1,248 F. Total exports 74 80 82 G. Total imports 289 312 321 H. Imports from the U.S. 98 106 109 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Due to an alleged excess supply of dentists in Japan, the Japanese government has reduced number of new entrants into dental college by about 20 percent in the last several years. Competition among dentists is severe and a substantial number of dental offices have been forced to close in the past several years. Under these circumstances, the dental market is not expected to expand significantly in the short term, but in view of rapid growth of elderly population in Japan, the dental market has a high growth potential in the long term. Orthodontic, esthetics and implant products have a high growth potential both in short term and long term. Note: 1993 statistics are based on estimates by industry sources, as official statistics for 1993 are not yet available. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Esthetics products: 100 Orthodontic devices: 35 Dental implants: 10 Major local and third country competitors: Yoshida; J. Morita; Japan Tokyo Dental Industrial Co.; Shofu Inc. Japan Siemens Germany Degussa Germany Livoclar Liechtenstein A. Rank of sector: 32 B. Name of sector: Textile Products-Made Up C. Three-letter ITA industry sector code: TXP (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 8,300 8,650 8,700 E. Total local production 7,275 7,570 7,595 F. Total exports 135 140 145 G. Total imports 1,160 1,220 1,250 H. Imports from the U.S. 87 92 94 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Because of Japan's recession, the Japanese textile products market has been shrinking over the last few years. However, the number of newly constructed residential houses increased in 1993, and will likely increase in 1994 as well. Since it may take several years for the commercial building market to recover, the entire textile products market will grow slowly over the next couple of years. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Carpets 1,250 Curtains 1,580 Major local and third-country competitors Toli Corporation Japan Kawashima Textiles Co., Ltd. Japan Toso Co., Ltd. Japan Suminoe Textile Co., Ltd. Japan Sangetsu Co., Ltd. Japan A. Rank of sector: 33 B. Name of sector: Pollution Control Equipment C. Three-letter ITA industry sector code: POL (millions of U.S. dollars) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 10,254 11,580 12,405 E. Total local production 10,000 11,300 12,100 F. Total exports 273 300 330 G. Total imports 19 20 25 H. Imports from the U.S. 14 16 20 I. Exchange rate used (YEN/$) 111 107 107 J. Comments: Environmental protection and pollution control is a top policy priority in both the public and private sectors. The market for pollution control and environmental protection equipment and services in Japan is expected to resume sustained growth when investment levels increase with an improved domestic economy. Japan, the third largest exporter of pollution control equipment and licensed technology behind Germany and the United States, is a strong competitor. Nevertheless, there is a substantial U.S. export potential for products and services dealing with remediation of soil and groundwater contamination. U.S. equipment and services in this field are considered more advanced than those offered by Japanese firms. Statistics are based on best available industry information. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): Remediation equipment & services for soil and groundwater contamination 400 Major local and third-country competitors: Ishikawajima-Harima (IHI); Mitsubishi Heavy Industries (MHI); Nippon Kokan (NKK); Ebara; Kurita (Japan) Stengelin GbmH U. Co. KG; Meiko GmbH Co. (Germany) PCI Membrane Systems, Ltd.; IMC (U.K.) A. Rank of sector: Unranked B. Name of sector: Beef C. PS&D Commodity Heading: Meat, Beef and Veal (thousands of metric tons) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 1,410 1,477 *** E. Total local production 595 605 *** F. Total exports 1 1 *** G. Total imports 717 735 *** H. Imports from the U.S. 277 281 *** I. Exchange rate used (YEN/$) N/A N/A *** J. Comments: Japanese imports of U.S. beef continued booming in 1993, rising 15 percent by value and 17 percent by quantity. The trade was valued at an incredible $1.37 billion. Key factors encouraging increased sales included: a 10 percent tariff reduction in April, appreciation of the yen by more than 10 percent, and strong retail and food service promotion efforts to move increasingly affordable cuts through "high yen" sales and "price-cut" menus. *** The U.S. Department of Agriculture does not make forecasts this far in advance. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): *** Major local and third-country competitors: Japan Australia A. Rank of sector: Unranked B. Name of sector: Apples C. PS&D Commodity Heading: Fresh Apples (thousands of metric tons) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 1,039 1,028 *** E. Total local production 1,039 1,028 *** F. Total exports 1.5 1.5 *** G. Total imports 0.07 1 *** H. Imports from the U.S. 0 0 *** I. Exchange rate used (YEN/$) N/A N/A N/A J. Comments: Japanese apples such as Fuji and Tsugaru are large, high quality, physically near-perfect, and exorbitantly expensive due to the requisite heavy labor costs. Apples have been considered a luxury item, suitably wrapped as gifts or eaten as a special delicacy, rather than an considered an everyday fruit or staple nutrient. Imports of U.S. apples at the time of the 1994 Japanese harvest follows lifting of long- standing Japanese phytosanitary objections to imports. While consumer views of apples as a luxury product could initially impede the acceptance of low cost fruit, U.S. packers can expect that their dramatically lower prices should eventually create a new market tier of "everyday use" apples. U.S. packers must take the unheard of quality expectations of the Japanese consumer seriously. *** The U.S. Department of Agriculture does not make forecasts this far in advance. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): *** Major local and third-country competitors: Japan New Zealand A. Rank of sector: Unranked B. Name of sector: Rice C. PS&D Commodity Heading: Rice, Milled (thousands of metric tons) 1993 1994 1995 (actual) (estimated) (forecast) D. Total market size 10,279 10,379 *** E. Total local production 7,200 9,500 *** F. Total exports 0 0 *** G. Total imports 2,650 600 *** H. Imports from the U.S. 2,000 600 *** I. Exchange rate used (YEN/$) N/A N/A N/A J. Comments: With the Japanese Government's decision to partially open its rice market, through GATT commitments as well as to make up for the disastrous 1993 harvest, there will be many opportunities for U.S. rice exporters. The most promising market niche for U.S. rice will be in food service and other institutional markets which want good quality rice at reasonable prices. Japanese industry sources believe this rice will have to be imported in brown rice form, milled just prior to retail sale for better freshness. Other promising niches are for lower quality rice for processing, for long grain rice and for other specialty varieties. The quantity of imported rice is expect to equal 70% of the volume of government channel rice, while 340,000 metric tons of imported rice will be sold by the Food Agency to rice wholesalers annually. Most imported rice is expected to be blended with domestic rice. In many taste testings held throughout Japan by trade newspapers and even by the Food Agency, U.S. rice (short/medium grain) gains high marks. *** The U.S. Department of Agriculture does not make forecasts this far in advance. List of most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (US $ millions): *** Major local and third-country competitors: Japan China Thailand Australia