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Economy

Japan, US, EU to join in pressuring China on fair trade

The three economies hope to use WTO to persuade Beijing to rethink policies

Onlookers watch from a harbor wall as a large container ship, the CSCL Globe, docks at a port in England in January 2015.   © Reuters

TOKYO -- Japan, the U.S. and the European Union will join together to call for fairer trade practices at the ministerial meeting of the World Trade Organization to be held in Buenos Aires from Sunday. They are expected to announce a joint policy to develop new rules to help maintain both industry policies and fair trade practices, in an attempt to indirectly pressure China.

Japanese Minister of Economy, Trade and Industry Hiroshige Seko, U.S. Trade Representative Robert Lighthizer, and EU Trade Commissioner Cecilia Malmstrom will hold talks Tuesday. They hope to draw up a joint document to express their commitment to work together to fight state policies that could undermine fair and transparent trade.

The document is expected to emphasize the importance of a framework to address national policies that could be harmful to fair trade, such as excess production, preferential treatment and indirect subsidies to state enterprises. It will also oppose excessive government controls on the internet. While it will not be directed at any particular government, it will be intended to persuade Beijing to reconsider its current policies. 

In November, steel-producing countries met in Germany to discuss excess production capacity. But in response to the forum's report, Washington said the meeting had "not made meaningful progress" on the root causes of excess steel capacity, and the U.S. would not hesitate to use "the tools available under legal authorities."

The EU is also currently in a dispute with China before the WTO over whether China's economy operates in a way that can be recognized as a "market economy."

These circumstances have brought the three parties together to counter China. But Washington's focus appears to be on the WTO's shortcomings. The U.S. has preferred to work on its own, trying to impose higher tariffs or ban imports from China, in accordance with its own laws, rather than joining multilateral efforts.

U.S. President Donald Trump and Japanese Prime Minister Shinzo Abe discuss a range of issues, including trade, at a joint news conference on Nov. 6 in Tokyo.

Japan and the EU, on the other hand, have insisted on proceeding based on international frameworks such as the WTO. The two will attempt to persuade the U.S. to join international cooperation on trade.

The upcoming WTO ministerial meeting will be the first since U.S. President Donald Trump took office at the beginning of this year. Lighthizer will take the opportunity to ask for reforms to the WTO. India and some African nations are expected to urge various improvements to the body. They complain that the benefits of free trade have not fully spread to developing countries. 

Japan, meanwhile, wants to propose the creation of common rules to promote e-commerce, and call for cooperation from member nations in developing adequate telecommunications infrastructure in developing countries. But prior discussions have revealed the gap between developing nations, who prioritize agriculture and fishery issues, and richer economies seeking to discuss more technologically advanced matters.

The WTO also has a concern that the conference might not be able to issue a ministerial communique if it faces disapproval from the U.S. to particular expressions, such as "against protectionism."

There have been two WTO conferences in the past that closed without a joint statement. At the 2003 meeting, trade negotiations over the liberalization of agriculture collapsed.

The U.S. role is key, as it has led global efforts toward free trade in the past. If the U.S. turns it back on the WTO, global trade flows could be thrown into turmoil. 

(Nikkei)

 

 

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