Japan is taking the initiative in getting the much-vaunted global machine of trade liberalization up and running again after it stalled more than a year ago.
Top negotiators from Japan and 10 other economies will meet informally in Frankfurt on Jan. 24 to explore ways to get a new round of global trade talks launched under the auspices of the World Trade Organization, the Foreign Ministry announced Thursday.
Ministry officials said that the sub-Cabinet-level conference was originally proposed by Japan and will be chaired by Yoshiji Nogami, a deputy Japanese foreign minister for economic affairs. A deputy director general of the WTO will also attend.
Among the other WTO members participating in the Frankfurt conference will be Switzerland, Australia, South Korea, Thailand, India, Mexico, Brazil, Egypt and South Africa. Hong Kong, which returned to China's rule in July 1997, will also attend as an independent member of the WTO, the Geneva-based watchdog on international commerce.
The 15-nation European Union and the United States will not participate. The U.S. is in transition, as President-elect George W. Bush prepares to take office Jan. 20, succeeding President Bill Clinton. Bush has yet to complete his team of trade negotiators.
The officials said, however, that Japan and the EU will hold high-level bilateral talks on the issue of launching a new WTO round in Brussels on the eve of the Frankfurt conference.
"We already informed the U.S. and the EU of our plan to convene the Frankfurt conference and received their blessings," a Foreign Ministry source said. "They both asked us to brief them on the outcome."
A new round of global trade liberalization negotiations was to have been inaugurated in December 1999 at a key WTO ministerial meeting in Seattle. But WTO members splintered into several fiercely divided camps at the meeting, and no common ground has been found since on issues ranging from agriculture trade to environment and labor safeguards to renegotiating antidumping rules.
The next WTO ministerial meeting is now planned for the end of this year, but there has yet to be a decision on where that meeting will take place.
In another sign of just how intractable the differences between the WTO members remain, an end-of-the-year deadline to begin the next round of liberalization talks came and went. The deadline was set in July during a Group of Eight summit in Okinawa Prefecture.
The G8 comprises the U.S., Canada, Britain, Germany, France, Italy, Japan and Russia. Russia is still not a WTO member.
At a meeting in Brunei in mid-November, leaders of the 21 member economies of the Asia-Pacific Economic Cooperation forum, or APEC, set a more modest goal — to have the new WTO round launched at "the earliest possible date" within this year. But even this broad target appears highly elusive, with no sign of progress toward a breakthrough.
At the Seattle disaster, the Clinton administration came under pressure from domestic labor unions and human-rights advocates who insisted on putting labor protection and environmental preservation on the agenda of the new WTO round.
Clinton's trade team agreed, but its proposal angered many developing countries, which saw the demands as protectionism and called them mere ploys aimed at curbing cheap imports.
The farm issue pits the U.S., Australia and other agriculture exporters against Japan, the EU and other WTO members who continue to tightly regulate that segment of their economies.
At the end of the last round of trade liberalization, it was agreed that agriculture trade would be on the agenda for the next round, but now Japan and the EU are objecting to liberalizing farm trade.
In addition, Japan is insisting that antidumping be taken up at the new round again, a demand the U.S. adamantly refuses.
Japan and the EU believe the antidumping rules should be reviewed to prevent what they perceive as "an abuse" of the rules by some WTO members.
Japan is particularly concerned with the success the U.S. has had in invoking WTO rules and applying sanctions to steel products that U.S. courts ruled were dumped into the U.S. by Japan and other nations at less than fair market value.
None of the sides appear to be moving toward compromising their stances.
The Clinton administration has adamantly refused to budge on any of the issues, and some outside observers blame this on the recent presidential and congressional elections. They say Clinton and the Democratic candidate to replace Clinton, Vice President Al Gore, feared alienating labor unions, the Democratic Party's traditional constituency.
It remains uncertain, however, what tack the incoming Bush administration will take.
While Bush appears likely to take a softer stance on the labor and environmental issues, the incoming president is expected to push harder for liberalization of farm trade to boost American agricultural exports.
On the antidumping issue, Bush may feel it politically difficult to depart from the Clinton administration's policy, given the fact that the U.S. Congress is now almost evenly divided between Republicans and Democrats.
The divisive stances among industrialized nations make up only one hurdle to the next round. Many developing countries are also opposed — or at least reluctant — to launch new WTO negotiations out of the belief that further liberalization would benefit only wealthy countries at the expense of developing economies.
Despite the new round's inability to get off the starting line, negotiations are under way in Geneva on the two so-called built-in agendas of agriculture and services.
Japan and the EU, however, are opposed to these negotiations proceeding as smoothly as the U.S. and other farm-exporting countries want while a broader agenda for the new WTO round has yet to be established.
"What we have to do first to get the new WTO round launched as soon as possible is to build a broad consensus on a specific agenda for the new round among major players in the WTO, including developing countries," a senior ministry official said. "Even if agreement is reached among the major economic powers, like Japan, the U.S. and the EU, it will not be enough.
"That is a lesson we have learned from the failure of the Seattle meeting."
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