Time for Japan to be Ambitious on Global Trade

Joining the U.S. to Advance the Current Round of WTO Negotiations

This article appeared on July 11, 2004 in the Mainichi Daily News, and it is reproduced here with the Mainichi's permission.

By Howard H. Baker, Jr.
Ambassador to Japan

This year marks the 10th anniversary of NAFTA, a regional trade agreement between the United States, Mexico, and Canada that has played an important role in integrating the North American market and promoting growth among the three economies Deeply committed to continuing to open markets, the United States has embarked on an ambitious agenda of what U.S. Trade Representative Robert B. Zoellick calls "competitive liberalization" - promoting trade liberalization globally, regionally, and bilaterally. In addition to having forged Free Trade Agreements (FTAs) with Singapore, Chile, Israel, and Jordan, the United States is in the process of finalizing agreements with Australia, Bahrain, Morocco, and Central America. Other FTA talks in various stages of negotiation are with Thailand, the South African Customs Union, and many Latin American countries. We see these cutting-edge, comprehensive bilateral and regional trade agreements, combined with multilateral trade liberalization, as part of a cumulative process that will improve the livelihood of people the world over.

Japan has long supported and benefited from participating in the multilateral trading system. In recent years, Japan has also sought to bind itself more closely to key trading partners through its own FTAs. It has concluded agreements with Singapore and Mexico, establishing Economic Partnership Agreements that include certain agricultural products and go beyond simple tariff reductions by setting up new channels for the freer flow of goods, services, investment, technology, and know-how. More recently, Japan has launched negotiations with South Korea, Thailand, Malaysia, and the Philippines, where new challenges lie in the areas of key agriculture products and the movement of persons. In those negotiations, Japan should ensure that all future agreements cover substantially all goods, including agriculture, as WTO rules require.

Comprising nearly half of the world economy, the United States and Japan can have a tremendously positive impact on economic growth, prosperity, and development by leading efforts to lower global trade barriers. For its part, the United States has been an ambitious and leading voice in the current WTO trade negotiations known as the Doha Development Agenda. It is important to recognize that trade is not a zero-sum game. Rather it is a win-win dynamic where we can all grow together. Emerging markets, whose economic growth will fuel a rise in their middle-classes and expand their consumer sector, will offer increased opportunities for countries like Japan and the United States to export their goods and services.

The window of opportunity for the Doha Agenda is narrow. In the next three weeks, trade negotiators will try to hammer out the frameworks upon which the next stage of negotiations will be based. The specific numbers and the final agreements will come later, but at this critical juncture we must not lose momentum, nor should we lower our ambitions. We urge Japan to take its rightful place as a key global economic player and provide robust leadership in the Doha negotiations. With its recently improving economy, Japan should now be in an even stronger position to positively contribute to those negotiations. We all have our sensitivities and our political problems, but the question is whether we will allow those sensitivities to paralyze us. Japan's FTA efforts demonstrate that it is just beginning to address its domestic sensitivities for the overall good of its own economy and the global economy. The real challenge facing Japan is whether it can mobilize the same resolve toward advancing the Doha talks.

The Doha negotiations are a strategic opportunity to give a boost to global growth. As the world's two largest economies, it is our special responsibility to cooperate closely in our endeavors to seize that opportunity and further liberalize trade around the world. It is also our responsibility to lead the charge on the trade front, together setting an ambitious course to promote free trade and create a more prosperous and equitable world.