Myth and Reality: Why Japan Strives For Multilateralism

Yohei Kono
Minister for Foreign Affairs

 The beginning of a new century makes one think about history. Now more than fifty years old, the multilateral trading system embodied first in the GATT then in the WTO, has delivered unprecedented growth and wealth to the peoples of nations, both large and small. To give some figures, world trade in goods grew eighty fold between the years 1950 and 1999.

 The system, however, now faces multi-facetted challenges. While the memories of Seattle remain vivid, the WTO Members are still searching for ways to launch a new round. Regional trade agreements have been increasing for some time, directing attention of some parts of the business sector to regional arrangements rather than global liberalisation and multilateral rule-making. The legitimacy of the WTO is also being challenged from the viewpoint of such issues as environmental protection. Responding to the concerns of developing countries also remains an important task.

 Will later historians note the year 2001 as a turning point in the history of the world trading system? Whatever the answer might be, it is certain that the multilateral trading system needs to take on these challenges to continue to play a central role in world trade. For this very reason, Japan, along with other WTO Members, are striving hard to launch a new round of WTO trade negotiations in 2001 by taking such initiatives as organising informal consultations among WTO members to get them prepared.

 Meanwhile, the following criticisms of Japan's posture on the multilateral trade negotiations seem to persist among some critics:

(1) Japan's call for a "comprehensive" round is just another of its usual delaying tactics: asking for the impossible and not moving forward in opening up its market.
(2) Japan has already abandoned multilateralism as it has quickly shifted its policy towards bilateral free trade agreements.
(3) Japan cannot be taken seriously in trade talks especially when it does not agree to open its agricultural market.

 The following will show not only the inaccuracy of these views but also why it is important to strive for the early launch of an inclusive new round.

 First and foremost, Japan is fully committed to the multilateral trading system and firmly believes that the new round has to respond to the wide-ranging interests of WTO members and broad sectors of society, and cover market access as well as rule making and strengthening. Only through such an approach, can we ensure an active contribution by all members and successfully conclude negotiations to the satisfaction of all. Such a new round would also enable the WTO to provide more stable and strengthened trade rules on which everyone could depend and to respond to the newly evolving environment of world trade. The WTO would thereby continue to play a central role in the world trading system. Seeking for better rules on investment, e-commerce and anti-dumping is relevant in this regard. It is therefore inaccurate to claim that a call for launching a sufficiently broad-based round is asking for the impossible.

 Second, Japan's recent commencement of negotiations with Singapore on the Economic Partnership Agreement by no means indicates that Japan has abandoned multilateralism. On the contrary, as mentioned above, Japan is working hard for the strengthening the WTO. This is quite a natural consequence of Japan's dependence on multilateral trade; Japan's trade structure does not show particular dependence on particular regions. Regional trade agreements are useful tools for market liberalisation and economic structural reform to complement multilateral efforts, as long as they are consistent with WTO rules. The Economic Partnership Agreement with Singapore is expected to be one such agreement.

 Third, on agriculture, to set the record straight, Japan has been faithfully implementing the Uruguay Round agreement, and has been the world's largest food importing country bar none; Japan's net food import amounted to approximately 36 billion US dollars in 1997. At the same time, Japan has the lowest food self-sufficiency ratio among all industrialised nations. Based on such a record, we firmly believe that the negotiations on agriculture have to take full account of non-trade concerns including the multifunctional role of agriculture and to allow the agriculture of each WTO member to coexist. Furthermore, for any negotiations to deliver meaningful results, different interests have to be reflected in the negotiations in a well-balanced manner. This is why a large number of WTO members are calling for the early launching of a sufficiently broad-based new round and agricultural negotiations to be an integral part of it.

 Global trade in the 21st century will continue to prosper as long as it is based on a clear set of rules and disciplines: thus the need to strengthen the WTO. To this end, active participation by all nations, particularly the developing countries is essential. Based on this belief, as agreed in the G8 Kyushu-Okinawa Summit last year, developed countries including Japan are actively engaged in such tasks as enhancing market access for the least developed countries and strengthening trade-related technical assistance. For instance, Japan is actively promoting trade-related capacity building for developing countries through such means as bilateral development assistance schemes. It is also imperative to forge support from all relevant parties, including the civil society. The WTO needs to build a constructive working relationship with NGOs, and the new round should respond to such public concerns as food safety.

Through these active efforts and successfully launching and concluding a new round, the WTO system, which is common public property in world trade, will continue to play a central role. Let us endeavour so that later historians will note the turn of the century as a positive turning point in the history of the world trading system.

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