A successful conclusion of talks between South Korea and the United States on a free-trade agreement would be a “wakeup call” to Japan and the U.S. for an accord between them, according to a former senior U.S. trade official.
“I think that would be a wakeup call to Japanese and American businessmen to say, ‘Wait a minute, if the United States and Korea can do that, then maybe there are some things we can do as well, that will be beneficial to the two economies,’ ” Alan Wolff, managing partner of Dewey Ballantine LLP’s Washington office, said in a recent interview.
The U.S. and South Korea launched FTA negotiations last week aimed at striking a deal by the end of the year.
Wolff, who served as deputy U.S. trade representative in the Jimmy Carter administration, said if the U.S. has an FTA with South Korea, a country that has “this level of development and this level of manufacturing capability,” it would provide a new dimension to American trade.
“We will be able to serve cars freely in Korea,” he said. “That would be a major departure. No one can serve cars freely in Korea currently.”
Wolff said forging an FTA between Japan and the U.S. would not be easy and far more complicated. At the same time, however, he said the two countries understand each other through 2 1/2 decades of discussions on a range of economic issues.
“Whether it’s an economic partnership agreement or an economic integration agreement, whatever it’s called, I think the time is right to begin serious discussions about how to formalize that process,” he said.
While noting agriculture, a politically sensitive sector for Japan, would have to be part of a bilateral FTA, Wolff said such an accord should be comprehensive, covering investment and issues that are broader than purely border steps.
“This is the new horizon for trade negotiations, but it’s really economic negotiations and much broader than traditional trade negotiations,” he said.
Wolff said whether Japan and the U.S. can reach an FTA would depend on the “political will” of government leaders in both countries.
Wolff warned Japan against being preoccupied with FTAs only with Asian countries and said he thinks it would be a mistake if Tokyo “turns its back” on the U.S. “to just look toward Asia.”
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