Although top leaders from the Group of Eight fired themselves up in late July to get a new round of global trade liberalization negotiations started by yearend, their agreement appears likely to fizzle out.
One-and-a-half months after the G8 summit in Okinawa Prefecture, no sign of progress has emerged toward launching the new round, leaving Japanese trade officials even more pessimistic than before about the G8 goal.
In a communique issued at the end of their three-day summit in Okinawa Prefecture, the G8 leaders said, “We agree to intensify our close and fruitful cooperation in order to try together with other WTO members to launch such a round during the course of this year.”
The G8 consists the United States, Canada, Britain, Germany, France, Italy, Japan and Russia; Russia is not a WTO member.
The new round of negotiations was supposed to be inaugurated under the auspices of the World Trade Organization early this year but has not been due to the collapse last December of a key WTO ministerial meeting.
Ministers from the more than 130 members of the WTO, the Geneva-based watchdog on international commerce, failed at their meeting in Seattle to set a specific agenda for the new round due to sharp differences over labor protection, agriculture, antidumping rules and other issues.
“There is no prospect at all of specific progress being made toward an early launch of the new WTO round,” a senior official at the Ministry of International Trade and Industry said with a deep sigh, requesting that he not be named.
His view was generally shared by other senior MITI officials in charge of WTO affairs when they met earlier this week at a ministry room for the first time after summer holidays to discuss details of their WTO strategy for the rest of the year.
The Foreign Ministry is also equally pessimistic about an early launch of the new WTO round.
“I am concerned that many of industrialized as well as developing countries are losing enthusiasm about getting the new round started early,” a senior ministry official said, requesting anonymity. “But we cannot just sit back and do nothing.”
To grope for possible measures to help break the deadlock and launch the delayed round, Kazuo Asakai, the ambassador in charge of international economic affairs, will visit Geneva later this month, ministry sources said.
During his two-day visit to Geneva beginning Sept. 18, Asakai will meet with WTO Director General Mike Moore and senior officials in charge of WTO affairs from major industrialized and developing countries, the sources said.
At the WTO Seattle meeting, the U.S. administration of President Bill Clinton, under pressure from domestic labor unions and human-rights advocates, insisted on putting labor protection on the agenda for the new WTO round.
This U.S. proposal angered many developing countries, which saw it as a thinly-veiled protectionist ploy aimed at curbing surging cheap imports from them.
The farm and antidumping issues pit the U.S., Australia and other agriculture-exporting nations against Japan, France and other nations that object to agricultural trade being further liberalized in new global trade talks.
The Clinton administration also rejected a Japanese and EU proposal to put antidumping rules on the agenda for the new WTO round.
Japan and the EU believe the antidumping rules should be reviewed to prevent what they perceive as abuse of the rules by WTO members.
The U.S., for example, invoked those rules when steel exports from Japan and other nations surged into the country following the Asian financial crisis of 1997. But after U.S. government investigations, antidumping sanctions were actually imposed only in seven of 11 cases brought by the government.
These contentious issues have created a wide chasm between WTO members, and compromises will eventually have to be made for the stalemate to be broken. But the world’s biggest trader is currently handcuffed in this regard.
The Clinton administration is unlikely to budge on any of the issues in a politically-charged election year, especially at the risk of alienating labor unions, the Democratic Party’s traditional constituency.
In addition, Clinton is currently focusing more on other global affairs.
“The Clinton administration is now so preoccupied with the issue of achieving a Middle East peace agreement that the new WTO round seems to have been pushed to the back burner of the administration’s foreign policy agenda,” one senior Japanese trade negotiator grumbled.
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