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Efforts to Enhance Prosperity in Japan and the International Community

In 2007, the global economy saw a growing presence of China, India, Russia and other emerging economies amidst an expansion in trade and investment as globalization advances. It also experienced a greater uncertainty due to the turmoil in the financial markets stemming from the sub-prime mortgage loan problem in the US and drastic increase in crude oil price. As for the Japanese economy, the corporate sector enjoyed a sustained economic growth as the economy continued to rebound, but it is necessary to pay due attention to risk factors in the trends of the global economy. Under these circumstances, Japan has developed comprehensive policies to promote the sustainable growth both for the Japanese and the global economies, by setting up the pillars of the following major issues.


Formulating Rules for a Multilateral Free Trading System

The World Trade Organization (WTO) is a major component of the global economic infrastructure. It is of tremendous significance that the international community learned lessons from the block economies of the pre-World War II years and has been formulating global rules first through the General Agreement on Tariffs and Trade (GATT) and now through the WTO framework. The WTO system covers not only trade in goods but also a broad range of areas including services and intellectual property rights. Japan considers it important to consolidate this system and has been giving due consideration to the concerns of developing countries as it works actively to promote the WTO Doha Round negotiations.

The WTO Doha Round negotiations, which were suspended in July 2006, resumed in earnest in January 2007. In July, the chairs of the agriculture and non-agricultural market access (NAMA) negotiating groups circulated draft texts on modalities as a basis for discussions. Since September, intensive negotiations have been underway in individual negotiating areas and Japan has been proactively engaged in these.


Promoting Negotiations on Economic Partnership Agreements (EPAs) and Free Trade Agreements (FTAs)

The reinforcement and development of the multilateral free trading system, with the WTO at its center, is the fundamental core of Japan's external economic policy. In order to supplement this, Japan has also been promoting Economic Partnership Agreements (EPAs) and Free Trade Agreements (FTAs). EPAs / FTAs accommodate the various types of global economic relationships, going beyond trade liberalization to cover investment liberalization and the formulation of rules in various sectors. These agreements can also be expected to foster closer ties with the partner countries. Japan considers the conclusion of EPAs with the countries of East Asia, with which it has close relations, to be a priority issue. To date, Japan has concluded and signed EPAs / FTAs with eight countries and has concluded the negotiations with ASEAN as a whole. Negotiations are currently underway with six countries and regions, including those that are important in the areas of natural resources and energy.


Addressing Globalization

In the new international environment that has emerged since the 2001 terrorist attacks in the United States, responding to global issues such as sustainable development, poverty, counter-terrorism, and non-proliferation of weapons of mass destruction requires urgent attention, necessitating aid to developing nations and the creation of rules. The interest of the international community in energy issues and climate change issues rose dramatically in 2007, and there was also a focus on various challenges that have arisen along with the development of emerging countries such as China and India. Japan is addressing these issues through its active contributions as an advanced nation to policy coordination and the formulation of basic rules through the G8 Summit, the Organisation for Economic Co-operation and Development (OECD), and other diplomatic occasions.


Economic Security

Japan is dependent on imports for not only fundamental resources and products for a stable economy and society such as crude oil, natural gas, coal, and other energy resources, mineral resources, fishery resources, and agricultural products, but also many other resources. Moreover, the price of crude oil that had hovered between US$10 and US$30 throughout the 1990s, began a continuous sharp climb in around 2002. Influenced in particular by a dramatic surge in demand in emerging countries and influx of speculative funds into the market these past few years, it continued to escalate and briefly on January 2, 2008 exceeded US$100 / barrel (closed at US$99.62/barrel) for the first time in history (all price data is for WTI, a benchmark crude oil on the New York futures market). Metal prices have also continued to rise steeply due to spiraling demand in emerging countries, and the sharp escalation in crude oil price has impacted on metal and food prices. Amidst such changes, reinforcing Japan's economic security through using finite resources sustainably and ensuring stable supplies of resources is one of the extremely important diplomatic policy agenda.


Reinforcing the Competitiveness of Japanese Companies and the Strength of the Japanese Economy

Support for the activities of Japanese companies engaging in business overseas is important in fostering vitality of the Japanese economy. In particular, proliferation of counterfeit and pirated goods not only prevailing a threat for both sustainable economic growth and the health and safety of consumers, but also negatively impact Japanese companies through the loss of profits in overseas markets. For that reason, in addition to the arrangements and improvements made by Japanese Embassies, Consulates, and Permanent Missions overseas and multilateral efforts, Japan aims, in coordination with other nations concerned, to realize the Anti-Counterfeiting Trade Agreement (ACTA; provisional name), a new international legal framework to strengthen the enforcement of intellectual property rights.

Since 2003, when Japan launched its Invest Japan campaign, the government has been working to promote inward foreign direct investment (FDI). The Ministry of Foreign Affairs has been promoting the active use of its Embassies, Consulates, and Permanent Missions overseas for this purpose, while contributing to public relations and promotion activities to attract FDI through cooperation with various organizations of Japan.

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