Diplomatic Bluebook 2015

Chapter 3

Japan’s Foreign Policy to Promote National and Worldwide Interests

3.Participation in International Standard-Setting Activities

(1) G7 and G20 Summits

G7 and G20 Summits continue to play an essential role in providing an opportunity to show Japan’s own efforts to the international community and to form a global economic order desirable for Japan,

The G8 Sochi Summit was initially scheduled to be held in Russia in June 2014. However, in light of the situation in Ukraine, a G7 Summit Meeting was urgently held on the occasion of the Hague Nuclear Security Summit held in the Netherlands in March, and as a result of frank discussions among leaders, they decided that the G7 member states would not participate in the G8 Sochi Summit, but would hold a G7 Summit Meeting again in Brussels in June.

G7 Summit in Brussels (working dinner on June 6; Source: Cabinet Public Relations Office) G7 Summit in Brussels (working dinner on June 6; Source: Cabinet Public Relations Office)

At the G7 Brussels Summit held in Belgium in June, Japan as one of the G7 member countries, reaffirmed its determination to work on global challenges, based on common values such as freedom, democracy, open economies and societies, respect for human rights and the rule of law. In addition to topics such as the global economy, energy, climate change and development, the leaders frankly exchanged views on foreign policies focused on the situation in Ukraine. With regard to the situation in Ukraine, the leaders affirmed that G7 would act in a united manner and concurred on the importance of supporting Ukraine and called for a diplomatic solution by Russia.

Prime Minister Abe led the discussions on the situation in East Asia. With regard to the freedom of navigation and overflight, he appealed that “changing the status quo by force” should not be allowed anywhere in the world, and explained the principles that any claims should (i) be made based on international law; (ii) be done without resorting to the threat of force; and (iii) be settled peacefully; which obtained strong support from the member states. Moreover, the G7 leaders agreed to call on all parties to clarify and pursue their territorial and maritime claims in accordance with international law. In addition, Prime Minister Abe strongly appealed the necessity to urge North Korea to fully comply with the UN Security Council resolutions and resolve the abduction issue, which obtained strong support from the member states.

At the G20 Brisbane Summit held in Australia in November, the agenda of strengthening economic growth and creating jobs was positioned as the top priority, and the leaders conducted active discussions. The G20 member countries agreed that they would continue to coordinate in order to realize strong, sustainable, and balanced growth. At the Summit, statements such as the “Brisbane Action Plan” for lifting the collective GDP level of the G20 by at least an additional 2% by 2018 and “Comprehensive Growth Strategy” for each of the G20 countries were announced. Moreover, with regards to the urgent issue of the Ebola outbreak, G20 Leaders’ Statement was issued that G20 members are committed to taking necessary measures to respond to the medium-term economic and humanitarian costs caused by the Ebola outbreak.

Prime Minister Abe explained Japan’s reform efforts to overcome deflation. Further, he outlined Japan’s approach to supporting infrastructure development, women’s participation in the economy, and Japan’s efforts in making thermal power generation highly efficient and low-carbon via support for developing countries. Additionally, the Prime Minister pledged to contribute a maximum of 1.5 billion US dollars to the Green Climate Fund (GCF).

(2) World Trade Organization (WTO)

A. History of WTO and Doha Development Agenda Negotiations

The development of the Japanese economy has been largely indebted to the multilateral trading system led by the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO). The non-discriminatory and open multilateral trading system led by the WTO is a backbone of the global trade. The maintenance and enhancement of the system is a pillar of Japanese trade policy toward the revitalization of the Japanese economy. The WTO, which was established in 1995 to succeed the GATT, expanded the coverage of areas, strengthened the dispute settlement function, and has been playing a major role in: (i) promoting trade liberalization and developing new rules; and (ii) monitoring the implementation of the WTO Agreement and securing compliance with rules through the dispute settlement system. In the WTO Doha Development Agenda (DDA) negotiations8 launched in 2001, the single undertaking of the eight areas (agriculture, non-agricultural market access, services, rules, trade facilitation, development, environment, and intellectual property rights) had been pursued. The negotiations had remained deadlocked since 2008, but at the WTO’s 9th Ministerial Conference (MC9) in December 2013, “Bali Package” consisting of three areas of (i) trade facilitation, (ii) agriculture, and (iii) development was concluded as a partial agreement of the DDA.

  • 8 DDA stands for Doha Development Agenda.
B. Implementation of the Bali Package

The “Bali Package” was a landmark including the Agreement on Trade Facilitation that was the first-ever binding multilateral agreement among all members since the establishment of the WTO. However, because of opposition from some countries, the Protocol of Amendment to Insert the Agreement on Trade Facilitation into the WTO Agreement failed to be adopted by the deadline of the end of July 2014, and hence the implementation of the whole “Bali Package” had been up in the air. In order to bring back the “Bali Package” on track, Japan and other Members states made use of such occasions as WTO meetings and bilateral meetings to persuade the opposing countries to agree to the implementation of the whole package. As a result of this, at the special meeting of the General Council in November, the following three General Council Decisions were adopted: (i) the adoption of the Protocol of Amendment, (ii) public stockholding for food security purposes, and (iii) Post-Bali work program. Japan hereafter intends to implement the “Bali Package” steadily, and actively participates in the development of the Post-Bali work program in order to maintain and strengthen the multilateral trading system.

C. Plurilateral Negotiations

Since the 8th Ministerial Meeting in 2011, in addition to consultations over the above-mentioned “Bali Package,” negotiations by voluntary countries have been held since the 8th Ministerial Conference in 2011 as follows.

(a) Negotiations for the Expansion of the Information Technology Agreement (ITA) product coverage

With regard to the Information Technology Agreement (ITA)9, which has been implemented since 1997, negotiations have been underway since 2012, so that newly-developed products10 reflecting the technological innovation thereafter will be added to the coverage (participated in by 53 voluntary countries and regions11 as of the end of December 2014). The expansion of the ITA product coverage is expected to promote trade of IT products as well as to contribute to the enhancement of economic growth and productivity of each country through information technology.

  • 9 Plurilateral framework to eliminate tariffs on IT products (semiconductors, computers, cellular phones, printers, fax, digital still image cameras) (“Ministerial Declaration on Trade in Information Technology Products”). Agreed in 1996 and executed from 1997. Currently, 78 countries including Japan, the United States, the EU (28 countries), China, and Russia are participating.
  • 10 Digital audiovisual equipment (camcorders, DVD/HD/BD players), digital multifunction machines and printers, medical equipment (electronic endoscopes, etc.), semiconductor manufacturing equipment, etc.
  • 11 Japan, the United States, the EU, Australia, Canada, China, the ROK, Hong Kong, Taiwan, Singapore, Israel, Turkey, Columbia, Costa Rica, Malaysia, Thailand, the Philippines, New Zealand, Norway, Switzerland, Liechtenstein, Mauritius, Montenegro, Guatemala, Iceland, and Albania (53 countries and regions including EU members).
(b) Trade in Services Agreement (TiSA) negotiations

In order to contribute to further liberalization of services trade, full-dress negotiations on the Trade in Services Agreement (TiSA) have been underway among 50 voluntary countries and regions12 including the US, EU (28 nations), and Australia (as of the end of 2014) since the summer of 2013. The participating countries and regions in the negotiations agree on such points that it should not exclude specific fields from the subject of negotiations in advance, but attempt to deepen the contents of the General Agreement on Trade in Services (GATS), while buttressing the rules in a manner responding to the times. Japan actively participates in the negotiations.

  • 12 Japan, the United States, the EU, Australia, Canada, the ROK, Hong Kong, Taiwan, Pakistan, Israel, Turkey, Mexico, Chile, Columbia, Peru, Costa Rica, Panama, Paraguay, New Zealand, Norway, Switzerland, Iceland, and Liechtenstein (50 countries and regions including EU members).
(c) Environmental Goods Agreement (EGA) negotiations

In July 2014, 41 voluntary countries and regions13 commenced the Environmental Goods Agreement (EGA) negotiations. These negotiations are aimed at eliminating tariffs of environmental goods in accordance with the list of environmental goods endorsed by the APEC Leaders in 2012 as well as the commitment made in APEC Leaders’ Declaration in 2013. Through these negotiations, it is expected to expand the trade of environmental goods, and achieve sustainable development. Japan has actively participated in the negotiations since the establishment.

  • 13 Japan, the United States, the EU, Australia, Canada, China, the ROK, Hong Kong, Taiwan, Singapore, Costa Rica, New Zealand, Norway, and Switzerland (41 countries and regions including EU members).
D. Dispute Settlement (DS)

The WTO dispute settlement system is a quasi-judicial system among the WTO Members to resolve trade disputes regarding the WTO Agreements in accordance with the dispute settlement procedures. As a pillar to stabilize and secure predictability to the WTO system, it is functioning effectively14. Recent cases, in which Japan was involved, are as follows:

○China’s measures related to the exportation of rare earths, tungsten and molybdenum15: In August 2014, followed by the Appellate Body report, the WTO Dispute Settlement Body recognized measures by China as inconsistent with the WTO Agreements, and recommended China to abide by the WTO agreement.

○Argentine’s import restrictions16: In January 2015, followed by the Appellate Body report, the WTO Dispute Settlement Body recognized measures by Argentine as inconsistent with the WTO Agreements, and recommended Argentine to abide by the WTO Agreement.

○China’s measures imposing anti-dumping duties on high-performance stainless steel seamless tubes from Japan17: A panel report is expected to be released in early 2015.

○Ukraine’s safeguard measures against imports of certain passenger cars18: The panel proceedings are currently in progress.

Japan has contributed significantly toward further improvements of the dispute settlement system including the clarification of the procedures through DSU19 review negotiations, which are being conducted as part of DDA.

E. Efforts toward the elimination and correction of protectionism

Since 2008, against the backdrop of such occurrences as the failure of Lehman Brothers and the European debt crisis, an increasing number of countries has ntroduced protectionist measures. In G20 and APEC, the participating countries and regions have agreed to continue their effort to restrain protectionism, and express political commitments accordingly. WTO has also committed in rolling back protectionist measures by way of the Trade Policy Review Mechanism and dispute settlement procedures. Japan is determined to continue its efforts toward the elimination and correction of protectionism.

  • 14 WTO Members that believe that they are suffering disadvantages because of WTO-inconsistent measures by other Members, may request consultations between the parties concerned. If a dispute is not resolved through consultations, the member states may refer the issue to a panel and contest the consistency of the measures concerned with the WTO Agreements. A party dissatisfied with a legal finding by the panel may appeal to the Appellate Body, the final adjudicator, to contest the findings. From the establishment of WTO in 1995 until the end of 2014, Japan was involved as a party (either as complainant or respondent) in 34 out of 486 disputes (the number of cases for which requests for consultation were made). The Appellate Body is composed of seven members and the term of members is four years (may be reappointed). Japan has produced three members since the establishment of WTO in 1995.
  • 15 Japan requested the establishment of a panel in July 2012 concurrently with the US and the EU, regarding the case of export taxes, export quotas and the management thereof.
  • 16 Japan requested the establishment of a panel in December 2012, concurrently with the EU and the US, regarding the case of the requirement for the Advance Sworn Import Declaration, non-automatic import license, and the trade balancing requirements.
  • 17 In cases where the export price is lower than the normal value, a product is to be deemed as being dumped and the duty will be imposed up to the dumping margin. Japan requested the establishment of a panel in May 2013, regarding the case of high-performance stainless steel seamless tubes used in superheaters and reheaters of supercritical and ultra-supercritical boilers in a coal-fired power plant.
  • 18 An emergency action on imports of particular products. Japan requested the establishment of a panel in March 2014, regarding the case of imposing tariffs on imported foreign passenger cars.
  • 19 Understanding on Rules and Procedures Governing the Settlement of Dispute

(3) Organization for Economic Co-operation and Development (OECD)

A. 50th anniversary of Japan’s accession to the OECD

For Japan, the year 1964 is not only when the Tokyo Olympics were held, but Japan acceded to the Organization for Economic Co-operation and Development (OECD) in that year, and the nation thereby took its place as one of the world’s industrialized nations, both in reality and in name. Followed by that, Japan achieved its economic growth steadily, using OECD’s policy recommendations and tools.

In 2014, in celebrating the 50th anniversary of Japan’s accession to the OECD, Japan conducted approximately 30 commemorative events, including a symposium attended by Prime Minister Abe and Angel Gurría, OECD Secretary-General, and the issue of commemorative stamps. In August, under the “OECD Tohoku School” program, about 100 pupils from the affected areas of the Great East Japan Earthquake visited Paris and promoted the wonders of Tohoku.

Foreign Minister Kishida handing commemorative stamps to OECD Secretary-General Gurría Foreign Minister Kishida handing commemorative stamps to OECD Secretary-General Gurría
Prime Minister Abe giving a keynote speech during the OECD Ministerial Council Meeting (May 6 in Paris; Source: Cabinet Public Relations Office) Prime Minister Abe giving a keynote speech during the OECD Ministerial Council Meeting (May 6 in Paris; Source: Cabinet Public Relations Office)
B. OECD Ministerial Council Meeting
(a) General remarks

In May 2014, Japan took up the Chair of the OECD Ministerial Council Meeting for the second time after 36 years. From Japan, Prime Minister Abe, Foreign Minister Kishida and three other Cabinet members attended the Ministerial Council Meeting. The meeting was also attended by 34 OECD member states, key partners (China, India, Indonesia, Brazil, and South Africa), nations under the accession process (Costa Rica and Latvia) at the ministerial level. Invited by Prime Minister Abe and Secretary-General Gurría, seven cabinet members from the ASEAN member states attended the OECD Ministerial Council Meeting for the first time in its history.

(b) Theme

Since the 2008 financial crisis, a sense of risk against economic crisis remains, particularly in Europe. Japan, as a chair country of the meeting, raised two pillars: (i) resilient economies and inclusive societies, and (ii) strengthening ties between the OECD and South East Asia. Japan led the discussions on topics such as response to economic crisis, new sources of growth, greater inclusion and participation of women, the elderly and youth, and, long-term challenges (the declining birthrate and an aging population, climate change, etc.), strengthening ties with South East Asia, and development.

In his keynote speech, Prime Minister Abe sent messages about Japan’s growth strategy in the future and its contributions to the global economy, and promoted the revitalization of the Japanese economy, including the reconstruction from the Great East Japan Earthquake, and overcoming deflation to the international community.

In particular, it is noteworthy that the resilience of the economy was addressed at the subsequent G20 Brisbane Summit, showing Japan’s leading role in creating trends of the global economy.

(c) Establishment of the “Southeast Asia Regional Program”

In order to make the growth of the global economy solid, it is essential to promote the economic growth in fast-growing Southeast Asia. In recognition of this, Prime Minister Abe launched the “OECD Southeast Asia Regional Program” together with five Cabinet Members of the ASEAN member states. In the future, Japan will lead discussions focused on such challenging issues as avoiding the occurrence of the “middle-income trap” in ASEAN member states, through regional policy network meetings regarding six areas including investment and SMEs and the use of abundant data or tools possessed by the OECD.

(d) OECD Forum

The OECD forum was held concurrently with the Ministerial Council Meeting. From Japan, many experts including the Friends of the OECD Parliamentary Group led by Toshihiro Nikai, a member of the House of Representatives of Japan, and Dr. Shinya Yamanaka, the Director of Center for iPS Cell Research and Application, University of Kyoto, attended the OECD forum. During the period of the forum, having abundant expertise regarding the economy in Southeast Asia, the ERIA (Economic Research Institute for ASEAN and East Asia) concluded a memorandum of understanding concerning cooperation with the OECD.

(4) Asia Pacific Economic Cooperation (APEC)

APEC is a forum that aims at sustainable development in the Asia Pacific region on a voluntary basis by each individual economy20 in order to promote the regional economic integration and cooperation. APEC consists of 21 countries and regions in the Asia-Pacific Region, which is “a world growth center” sharing about 40% of the world population, about 60% of the world GDP, and 50% of the trade volume. The regional trade shares about two-thirds of the total trade, being comparable with the EU in terms of establishing close regional economy. Strengthening economic cooperation and trust relationships in the APEC region is extremely important in pursuing Japan’s further development. APEC Economic Leaders’ Meetings and Ministerial Meetings provide the member economies with significant opportunities to exchange views among leaders and ministers regarding major interests in the international community, specifically focused on economic issues.

In the 2014 Beijing APEC Economic Leaders’ Meeting hosted by China, the Leaders looked back the 25 years of APEC history and discussed with the theme of “Advancing Regional Economic Integration”, “Strengthening Comprehensive Connectivity and Infrastructure Development”, and “Promoting Innovative Development, Economic Reform and Growth”. As outcomes of the meeting, the “22nd APEC Economic Leaders’ Declaration—Beijing Agenda for an Integrated, Innovative and Interconnected Asia-Pacific” and the “Statement on the 25th Anniversary of APEC—Shaping the Future through Asia-Pacific Partnership” were endorsed. With regard to “Advancing Regional Economic Integration” “The Beijing Roadmap for APEC’s Contribution to the Realization of the FTAAP” was endorsed, and launch of the “collective strategic study on issues related to the realization of the FTAAP” was agreed as a further step of contributions by APEC toward the realization of the Free Trade Area of the Asia-Pacific (FTAAP), which has been driven since the APEC Economic Leaders’ Meeting in 2010, in Yokohama. The leaders instructed the officials to report the results of study by the end of 2016. The Leaders also shared a seriousness of the problems associated with the implementation of the Bali-decisions, which are the cause of the impasse in the WTO negotiation function, and expressed support for the prompt conclusion of the negotiation on expanding the Information Technology Agreement (ITA). With regard to the “Promoting Innovative Development, Economic Reform and Growth”, commitments in efforts toward the economic reform, innovation, energy, promotion of women’s participation into society, anti-corruption, countermeasures against the Ebola outbreak were agreed. Prime Minister Abe addressed Japan’s intention to contribute to further regional economic growth via the revitalization of the Japanese economy through bold implementation of the regulatory reform of Abenomics. Further, he emphasized on the importance of promoting women’s participation in APEC in order to make the most of the region’s potential. With regard to “Strengthening Comprehensive Connectivity and Infrastructure Development,” APEC Leaders agreed with the “APEC Connectivity Blueprint for 2015–2025” and developed concrete actions to strengthen connectivity by 2025. Prime Minister Abe pointed out the importance of “quality of infrastructure,” “high-quality standards,” and the “promoting local employment and capacity building,” together with effective mobilization of private capital. Prime Minister Abe also participated in APEC Business Advisory Council (ABAC) Dialogue with Leaders, which was held on the occasion of the APEC Economic Leaders’ Meeting, and explained the “Growth Strategy” of Abenomics as well as Japan’s view on principles which need to be followed for infrastructure development.

Outcome of the 2014 APEC Summit in Beijing

  • 20 APEC participating unit including Hong Kong China, Chinese Taipei