The outlook for the World Trade Organization's new round of trade negotiations is uncertain after member nations failed to agree on farm-trade "modality" before the March 31 deadline. The U.S.-European split over the Iraq war has slowed the momentum for talks. The initial goal of reaching a comprehensive agreement by January 2005 is now in doubt.
With difficulty expected in the new round of talks, most countries are likely to step up moves to conclude regional or bilateral free-trade agreements. International attention is focused on Japan, China and South Korea, all of which have fallen behind Western nations in signing FTAs.
In January Japan took the first step toward signing an FTA when it concluded an economic partnership agreement with Singapore. In September 2002, Japan and South Korea established an FTA study group of industry officials, bureaucrats and academics. In November, a summit of Japan and the Association of Southeast Asian Nations issued a joint declaration concerning a comprehensive economic partnership. In the same month, Japan and Mexico started formal talks on an FTA. Japan is also considering FTAs with Thailand, the Philippines, Australia, Chile and Taiwan.