Diplomatic Bluebook 2001
Chapter II. JAPAN'S FOREIGN POLICY IN MAJOR DIPLOMATIC FIELDS
SECTION 2. ECONOMICS
B. The World Trade Organization (WTO)
At the Third Ministerial Conference held in Seattle in December 1999, the WTO failed to launch a new round. This was mostly because it proved impossible to adjust the different positions of the leading WTO members regarding the range of agenda items. During 2000, there were numerous deliberations and consultations toward launching a new round, and Japan made an active contribution to this process.
Specifically, at the July G8 Kyushu-Okinawa Summit, the G8 agreed to work toward launching a new round. Then, at the November Asia-Pacific Economic Cooperation (APEC) Summit, regional leaders agreed that a balanced and sufficiently broad-based agenda responding to the interests and concerns of all WTO members should be finalized as soon as possible in 2001, and that a new round should be launched within 2001.
Japan believes that a new round should be launched within 2001 under a broad-based agenda that responds to the wide-ranging interests of all WTO members and that gives due consideration to the concerns of developing countries.*1 Accordingly, Japan is working toward the launch of a new round together with other concerned countries.
It is important to launch a new round within 2001 to maintain and reinforce the credibility of the WTO. What presently impedes the launch of these negotiations includes the lack of consensus among WTO members regarding the agenda, as well as issues concerning the implementation of the WTO Agreements. Measures must be devised to break through these impediments.
Japan, the European Union (EU), and other members are advocating a broad agenda, including not only market access, but also the strengthening of WTO rules (such as setting rules on investment and strengthening disciplines on anti-dumping measures). Meanwhile, the United States has expressed reservations on the inclusion of the rules on anti-dumping measures in the agenda, and India and other developing countries are taking a negative stance toward including the establishment of investment rules. What is more, the structure of advocates and opponents varies by issue. For example, the EU and the U.S. are in favor of an agenda that considers measures linking both trade and the environment as well as both trade and labor standards, while the developing countries are cautious about those linkages.
Japan believes it is important to give sufficient consideration to the concerns held by developing countries in order to resolve these types of differences toward launching a new round. In other words, while setting a broad-based agenda that responds to the wide-ranging interests of all WTO members, Japan believes that the agenda must also be acceptable to the developing countries. Some of the developing countries insist that the issues with implementing the WTO Agreements must first be resolved prior to launching a new round. Japan believes that the best way to address these implementation issues is to launch a new round within 2001 and to resolve these issues during the course of the new round.
In addressing the scope of the agenda issues related to implementing the WTO Agreements, Japan has been taking an active lead in involving the developing countries and building a consensus toward launching a new round. As one example, Japan convened an informal meeting on the launch of a new round in January 2001 in Frankfurt, Germany with the participation of vice-ministerial-level officials of major developing countries, including Egypt, the Republic of South Africa, and Brazil; this meeting was chaired by Deputy Minister for Foreign Affairs Yoshiji Nogami. Subsequently, at the end of January, Foreign Minister Yohei Kono met with WTO Director-General Mike Moore in Japan, and both agreed on the importance of launching a new round at an early date and of giving due consideration to the concerns of the developing countries.
In accordance with the WTO Agreements, WTO negotiations on the trade in services and agriculture ("the built-in agenda") began from January. In December, Japan submitted proposals for both the agricultural negotiations*2 and the services trade negotiations.*3 Japan believes it is important to consider the ongoing negotiations on the trade in services and agriculture as one aspect of a new round.
The widest possible participation of countries and regions in the WTO is critical in strengthening the multilateral trading system and making it more universal. With the accession of Jordan in April, the Republic of Georgia in June, Albania in September, and Croatia in November, there were a total of 140 WTO members as of the end of 2000.
Meanwhile, a total of 27 countries and regions including China, Chinese Taipei, Russia, Saudi Arabia, and Vietnam are still in the process of applying for WTO membership. Concerning China's application, China's bilateral market access negotiations with WTO members are almost complete, aside from negotiations with Mexico and a few other countries. However, while the WTO Working Party on Accessions conducted intensive deliberations toward granting China WTO membership within 2000 in six meetings held from March 2000 and did make progress in certain areas, disagreements remain in other fields. Thus, the negotiations on China's application will continue, primarily focusing on these fields. Japan will continue to cooperate with various countries towards promoting China's membership based on the belief that the accession of China to the WTO will accelerate additional reforms of China's domestic economy, further advance the market economy, deepen China's interdependence with the international community, and not only produce economic merits for Japan and China's other trading partners but also contribute to global prosperity and stability.
The WTO dispute settlement procedure has significantly strengthened and expedited the handling of disputes compared with the prior measures during the General Agreement on Tariffs and Trade (GATT) era. The WTO procedure clearly specifies the various deadlines, and is widely utilized by WTO members. In fact, the number of cases referred to panels has increased dramatically. Over the six-year period from the time that the WTO was launched in January 1995 until the end of December 2000, there were requests for the establishment of 106 panels, and reports on 46 of them were submitted to the WTO appellate body.
Like other WTO members, Japan also utilizes the WTO dispute settlement procedure. During 2000, Japan filed a complaint concerning U.S. anti-dumping measures on certain hot-rolled steel products from Japan. The WTO appellate body upheld Japan's contentions in two disputes: one with Canada regarding discriminatory tariffs on imported automobiles, and the other with the United States regarding the U.S. Anti-Dumping Act of 1916.
Additionally, in December the European Community (EC), Australia, India, the ROK, and other countries jointly requested formal WTO consultations with the United States concerning the Byrd Amendment on Antidumping and Countervailing Duties.*4
As demonstrated above, the impartial and fair WTO dispute settlement procedure contributes to maintaining the stability of the multilateral trading system. Examinations toward further improving the WTO dispute settlement procedure are now underway, and Japan has submitted a joint amendment toward revising the procedure together with Canada, Colombia, the Republic of Korea (ROK), Switzerland, and other countries. Further enhancing the effectiveness and reliability of the WTO dispute settlement procedure will remain an important issue in the future.
- Some developing countries firmly believe that the WTO has not produced benefits in line with their expectations, and stress the WTO's failure to respond to their concerns, especially regarding the opening of textile and agriculture markets and the easing of their obligations under the WTO Agreements.
- The Japanese proposal on the WTO agricultural negotiations is based on the philosophy of the "coexistence of various types of agriculture," and pursues the following five main points: (1) consideration of the multifunctionality of agriculture; (2) ensuring food security; (3) redressing the imbalance between rules and disciplines applied to agricultural exporting countries and those applied to importing countries; (4) consideration for developing countries; and (5) consideration for the concerns of consumers and civil society.
- The Japanese proposal on the WTO services trade negotiations emphasizes that the agenda should be comprehensive. Based on the concerns expressed by domestic industries, the proposal notes the importance of liberalization as well as the issues to be addressed for liberalization in nine sectors, including finance, telecommunications, and transportation. Also in October, Japan, the EU, the ROK, Norway, Singapore, and Hong Kong issued a joint declaration on the WTO maritime negotiations calling for these negotiations to promote the liberalization of maritime services.
- The Byrd Amendment stipulates that all anti-dumping tax and countervailing duties levied on subsidies received by the U.S. government will automatically be distributed to those domestic U.S. firms that launched the original complaints or supported these complaints to compensate them for injuries ostensibly suffered from unfair trading practices.
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