The failure this month of the Seattle Ministerial this month effectively ends the prospects for a comprehensive round of trade negotiations in the foreseeable future. Although negotiations on services and agriculture technically are required to begin next month, despite the failure, the exclusion of other issues realistically ensures the negotiations will be inconclusive.
However, U.S. and WTO officials are eager to resume multilateral negotiations on a comprehensive agenda for a new round through low-level meetings to be held in Geneva next week. President Clinton in particular said he remains "optimistic that we can use the coming months to narrow our differences and launch a successful new round of global trade talks." It is doubtful that in the near future negotiations between low-level officials will resolve any of the substantial differences that remain between WTO members with regard to the agenda for the new round.
The failure of the Seattle Ministerial can primarily be blamed on the intransigence of the world's major economies on issues of domestic political importance and a general failure to include developing countries in substantial negotiations. Many developing nations took offense to being excluded from last-minute, "green room" negotiations between the major economies, and complained that the WTO's existing system marginalized their interests. We believe that developing countries will demand increased participation in WTO policy-making and will play an increasingly important role in future trade negotiations. The effect of the protesters and general mayhem outside the negotiations is also not to be ignored as one of the causes for the Ministerial's failure.
CLINTON ADMINISTRATION OFFERED CONCESSIONS TO JAPAN ON INCLUSION OF ANTIDUMPING IN NEW ROUND
The turnaround in U.S. position, however brief, is especially remarkable considering that only several weeks earlier Department of Commerce Undersecretary for International Trade, David Aaron, called Japan the "greatest dumping" nation in the world, accused the GOJ of deliberately pursuing the inclusion of the antidumping issue as a means to thwart the WTO Millennium Round, and declared that Japan's true intention was to divert attention from its own trade constraints on fisheries, timber and agriculture.
However, a mild softening on the antidumping issue appears to be as far as the United States was willing to compromise on this issue and other "key" agenda disputes in Seattle. There were no reports of U.S. negotiators showing any willingness to compromise with regard to the inclusion of labor standards and worker's rights. We believe this U.S. posture is at least partially due to domestic political considerations, including a potential labor union revolt against Vice President Gore's presidential campaign if the United States was to abandon its demands that labor issues be included.
JAPAN FILES WTO COMPLAINT ON U.S. ANTIDUMPING INVESTIGATIONS
OTHER BILATERAL DISPUTES CONTINUE QUIETLY
On other fronts, the GOJ recently rejected a U.S. request for an extension of the U.S.- Japan flat glass agreement set to expire at the end of this month. The U.S. government also announced its intention to pursue additional bilateral insurance talks with Japan, beginning in January.
OUR WASHINGTON, D.C. OFFICE:
Japan - U.S. Trade ReportFAX is published solely for the interest of friends and clients of Paul, Hastings, Janofsky & Walker LLP and should in no way be relied upon or construed as legal advice. For specific information on recent developments or particular factual situations, the opinion of legal counsel should be sought. Paul, Hastings, Janofsky & Walker LLP is a limited liability law partnership including professional corporations.