Diplomatic Bluebook 2001
Chapter II. JAPAN'S FOREIGN POLICY IN MAJOR DIPLOMATIC FIELDS
SECTION 2. ECONOMICS
A. New Developments in Japan's Economic Diplomacy
One of the ultimate objectives of Japan's economic diplomacy is to reinforce and advance the Japanese economy by contributing to the further development of the global economy. The quantitative expansion of the global economy that began in the late 1980s, especially the expansion of trade and investment, is largely due to the increased globalization of the world economy through the free movement of people, goods, services, capital, and information across borders. This economic globalization has been systematically supported by numerous multilateral trade negotiation bodies, such as the General Agreement on Tariffs and Trade (GATT) and its successor the World Trade Organization (WTO), which have promoted the reduction and elimination of trade barriers and the establishment of common trading rules.
The pace of economic globalization has been accelerating all the more as a result of the Information and Communications Technology (IT) revolution and other technological innovations in various fields. At the same time, globalization is showing a dark side. As demonstrated by the Asian monetary and financial crisis and its worldwide repercussions, economic developments in one region may now exert an immediate, large-scale influence on the world economy as a whole. However, the globalization of the economy generates many benefits through the expansion of trade and investment. The greatest issue facing Japan's economic diplomacy today is to revive and reinforce the Japanese economy not only by taking advantage of the opportunities offered by this wave of globalization, but also by promoting the benefits of globalization for the entire world economy, ensuring that these benefits are enjoyed by all peoples across the world, and minimizing the adverse effects of globalization. Japan's economic diplomacy during the year 2000 is summarized in the following subsections.
Promoting further liberalization of trade and investment on a global scale is essential to ensure that Japan as well as other countries, including developing countries, can reap the fruits of balanced economic development. Japan has worked toward the liberalization of trade and investment through such means as summit diplomacy and other bilateral consultations, and through multilateral frameworks for promoting global approaches such as the WTO, the Organization for Economic Cooperation and Development (OECD), the International Monetary Fund (IMF), and the World Bank. While it goes without saying that strengthening the multilateral trading system under the auspices of the WTO is critical for expanding global economic activities, Japan believes that enhancing inter-regional, intra-regional, and bilateral cooperation and working to deepen and expand cooperative regional frameworks at multiple levels are also important to supplement and strengthen the multilateral trading system, and thereby contribute to further global economic growth. Accordingly, Japan continues to work toward the launch of a new round of the WTO negotiations (see B below), while simultaneously deciding to initiate formal negotiations on an economic agreement for a new age partnership between Japan and Singapore in October 2000 (see C below).
The Asian monetary and financial crisis of 1997-98 demonstrated that the global financial system cannot sufficiently respond to the new realities posed by the globalized world economy. To prevent and respond to such crises, not only do the domestic financial systems of each country have to be strengthened, but it is also essential to reinforce the international financial system, and in this regard, the IMF has an important role to play. At the July G8 Kyushu-Okinawa Summit, which was chaired by Prime Minister Yoshiro Mori, the G8 members agreed on measures to promote the strengthening of the international financial system, such as IMF reforms. Concerning cooperation in currency and financial fields in East Asia, at the November ASEAN+3 (Japan, China, the ROK) Summit Meeting, the participating countries confirmed their agreement regarding the basic framework and principles for bilateral currency swap and repo arrangements under the Chiang Mai Initiative, and bilateral negotiations are now underway based on this consensus. At the ASEAN+3 Summit Meeting, the government of Japan also announced that it would provide technical assistance to strengthen monetary cooperation within the region.
It was highly significant that the participants at the Tenth Session of the United Nations Conference on Trade and Development (UNCTAD X) held in Bangkok in February actively discussed the conference's main theme of "developmental strategies in an increasingly interdependent world: applying the lessons of the past to make globalization an effective instrument for the development of all countries and all people." While the leaders of many countries, especially developing countries, and international organizations participated, Japan was the only leading developed country whose head of state and government attended the conference, demonstrating Japan's recognition of the importance of the conference's main theme. In his keynote address, Prime Minister Keizo Obuchi explained Japan's stance on providing assistance to developing countries, including support for developing sophisticated information-telecommunications societies, so that the developing countries could enjoy the benefits of globalization. Prime Minister Obuchi also stressed the importance of working toward promptly launching a new round of WTO negotiations while advancing confidence-building measures with developing countries. The conference adopted two documents, the Bangkok Declaration and the Bangkok Plan of Action, which call for expanded dialogue between developed and developing countries and indicate the future roles of the international community as a whole and of UNCTAD in particular toward making globalization more efficient and more equitable.
To ensure the stable development of the world economy in the future, both the developed and the developing countries must address the challenges posed by globalization through discussions on balanced worldwide economic growth. Japan deems it important to actively work toward the sound management of the global economy by explaining the benefits of globalization to developing countries which tend to emphasize its negative aspects, and by providing assistance so that such countries can enjoy the fruits of globalization. Accordingly, the government of Japan continues to actively promote expanded dialogue between developed and developing countries.
The revival of the Japanese economy is a major issue for Japan's active involvement in efforts to upgrade the international economic system and for improving the status of Japanese economic diplomacy. During 2000, the Japanese economy continued to gradually improve overall. Although the Japanese economy has yet to fully recover, the economy showed continuing movements toward a self-sustaining recovery. In addition to appropriate domestic economic management, efforts to advance the multilateral trading system, to enhance regional economic cooperation, and to maximize the benefits from the globalization of the world economy are needed to promote reforms toward a more open and freer economy and to revive and strengthen the Japanese economy.
Amid the advance of globalization and the consequent economic and social changes that are rapidly occurring, new approaches are now required in many fields, such as ensuring food safety and addressing the information gap resulting from the IT revolution. Japan is also taking an active stance toward these issues, as detailed in D, below.
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