KAWASE Tsuyoshi
Having graduated from the Faculty of Law, Keio University, Tsuyoshi Kawase completed his Master of Laws at Georgetown University in 1994. That same year he took up the position of assistant professor in the Faculty of Business and Economics, the former Kobe University of Commerce (now University of Hyogo). In 1999 he rose to the role of associate professor and also returned to Georgetown University in the concurrent positions of Visiting Scholar at the Graduate School of Law and Fellow of the Institute of International Economic Law (under the auspices of the Japan Society for the Promotion of Science). In 2001 he entered the Trade Policy Bureau of the Ministry of Economy, Trade and Industry as a deputy director of the Multilateral Trade System Department, before taking up his position of Fellow at RIETI in 2003. Fields of expertise include international economic law and trade policy.
For a detailed biography, please click here
To read Tsuyoshi Kawase's two columns for the RIETI website on the U.S. Steel Safeguard Dispute, please follow the links below:
"The Problems Left by the U.S. Steel Safeguard Dispute - The Success of Rebalancing and the Limits of the Safeguard Agreement" (Part 1)
http://www.rieti.go.jp/en/columns/a01_0110.html
"The Problems Left by the U.S. Steel Safeguard Dispute - The Success of Rebalancing and the Limits of the Safeguard Agreement" (Part 2)
http://www.rieti.go.jp/en/columns/a01_0111.html
Interview
WTO Safeguard Agreement
RIETI Report: Could you tell us about the problems with the World Trade Organization's (WTO) safeguard mechanism as it stands today?
Kawase: The very fact that WTO safeguard measures are used so infrequently is the problem we face today. It turns out that antidumping duties have been used with far more frequency than safeguard measures. In setting up the WTO, an agreement was formed to allow for the legitimate use of safeguard measures, thereby preventing WTO member countries from turning to measures outside the framework of the General Agreement on Tariffs and Trade (GATT), including voluntary export restraints (VERs), as seen in bilateral agreements between Japan and the United States on autos, semiconductors, and machinery tools. However, through a series of WTO disputes, we have come to recognize that the existing safeguard provisions pose a range of problems when you actually try to use them.
At the moment, the WTO Safeguard Agreement is biased against user governments or those trying to invoke the safeguard clause. In all of the eight cases of WTO disputes hitherto brought under the Safeguard Agreement, the invoking parties were found to have acted inconsistently with the agreement, ie they lost. Because the U.S. has been the loser in most of these cases, the U.S. Congress is strongly dissatisfied with the wording of the agreement as well as with its interpretation and application by the Appellate Body.
RIETI Report: Why did the agreement end up being so hard to use?
Kawase: At the time of Japan-China dispute over Welsh onions, fresh "shiitake" mushrooms and "tatami" rushes in 2001, I was involved in the task of invoking the Safeguard Agreement. What I realized at the time was that the agreement is poorly worded. In addition, because the interpretation of the agreement provided by the WTO Appellate Body is extremely vague and fails to present proper guidelines, it is difficult to see how safeguard measures can be made to function in a WTO-consistent manner. On the other hand, when I was involved in the Japan-U.S. steel disputes brought to the WTO, in which Japanese exports were subjected to U.S. safeguard measures, I realized how easy it is to find deficiencies in the measures in light of the agreement.
RIETI Report: Is the revision of the WTO Safeguard Agreement making progress?
Kawase: Improving the rules of antidumping and countervailing duties has been included on the agenda for the Doha Round trade negotiations. Among the so-called trade remedy (or "rule") issues, however, only the safeguard issue has been excluded from the agenda. Problems concerning the safeguard clause are now gradually surfacing, but the aforementioned discontent of U.S. Congress became prominent after the Doha Ministerial in November 2001, which partly explains why the safeguard issue failed to be listed on the agenda.
RIETI Report: You said that the wording of the WTO safeguard clause is very vague. Do you think this indicates that those involved in the rulemaking process for the WTO or under the GATT are unwilling to make commitments as regards the safeguard issue?
Kawase: I believe that may be the case in certain aspects. The Uruguay Round of trade negotiations, which established the WTO, was a multilateral negotiation, and when you have that many countries involved, it is quite difficult to make all of them agree to any clear-cut clause. Therefore, the overall agreements - not just limited to the Safeguard Agreement - have been vaguely worded on purpose, an exercise known as "constructive ambiguity." As to the Safeguard Agreement, the U.S. played a leading role in drafting the wording, modeling it after safeguard ("Escape Clause") provisions under Section 201 of the U.S. Trade Act of 1974. Therefore, the wording of the WTO Safeguard Agreement is certainly similar to that of U.S. law, but there are subtle differences. The U.S. is dissatisfied with how the wording of the Safeguard Agreement has been interpreted by WTO dispute settlement panels and the Appellate Body, which is quite different from the interpretation by the U.S. authority. In its report submitted to Congress at the end of 2002, the U.S. Secretary of Commerce devoted a substantial number of pages to describing its dissatisfaction with WTO rulings on safeguard-related disputes.
RIETI Report: Do you consider safeguard actions as important tools for implementing trade policy?
Kawase: From the viewpoint of pursuing an economic optimum, we must avoid reimposing any restrictions on the liberalized market. Thus, from the viewpoint of pursuing freer trade, it is a good policy to prevent the abuse of safeguard measures by keeping this hard-to-use safeguard clause unchanged. However, as assumed in the Safeguard Agreement, it is not a totally impossible scenario that a certain domestic industry, which lost to imports and had to exit from the market, successfully relocates resources to another booming industry or restores competitiveness after some period of time. Therefore, I believe that we should maintain an effective safeguard system, and it should function properly when needed on limited occasions, as well as seek to explore a better balance between disputing parties.
RIETI Report: How "usable" should the WTO safeguard system be?
Kawase: To what extent invocation of the safeguard clause should be allowed or restricted is a matter subject to judgment by all of the WTO members and the outcome of their negotiations. Therefore, it is difficult to say exactly how we can achieve an optimal policy. However, criteria for the invocation of the safeguard clause should be clarified so that WTO members know exactly when they can turn to this scheme. The clause should be revised to achieve this goal. Meanwhile, vague wording is a problem that is also common to trade remedy provisions under the WTO, such as those in the agreements on antidumping and countervailing duties. Safeguard cases tend to concern the kinds of items that possess a significant political magnitude, as exemplified by steel for the U.S. and Welsh onions for Japan, and therefore they are more apt to become a political issue compared to cases concerning antidumping and countervailing duties. But the Safeguard Agreement should be revised along with the agreements on antidumping and countervailing duties.
RIETI Report: Do you think that the Japanese government should advocate revising the Safeguard Agreement? Is there anything else that Japan should be doing?
Kawase: Before raising problems about the safeguard clause, I think Japan should try to actually use it. I do not intend to encourage protectionism. But because Japan, in the end, decided not to take definitive safeguard measures on Welsh onions and towels from China, I think that by actually invoking the safeguard clause, the Japanese government would be able to understand the problems inherent in this clause more clearly and make more substantive proposals.
RIETI Report: Is this also related to the fact that the Japanese government has very few experts on the legal system of the WTO?
Kawase: The lack of legal experts versed in WTO-related matters within the government is quite serious. Under the current personnel system of government ministries and agencies, each official is typically transferred, once every two years, from one post to another within a broad scope of policy areas, making it difficult to nurture true WTO experts comparable to those in the U.S. and Europe. In addition, it has not been the ordinary policy of the Japanese government to invoke trade remedy measures or other trade-related provisions. This is probably why there has been little demand for those specialized in trade laws within the government, as well as in the community of legal practitioners including lawyers in private practice. It is about time that the Japanese government started thinking seriously about a mechanism for nurturing legal experts on WTO matters.
RIETI Report: While being an academic researcher, you were engaged in WTO negotiations as a member of the Ministry of Economy, Trade and Industry. What was your impression of this experience?
Kawase: In general, I believe it is useful for the government to invite an expert - someone who has a systematic understanding of the WTO and GATT, including historical background - to offer advice on relevant policies. Meanwhile, as an individual researcher, it was a great experience to see the whole process of how the government formulates trade policies, and how disputes are handled and managed at the WTO. I am very grateful that I was granted such a precious opportunity.
RIETI Report: A book you co-authored, Safeguards under the WTO Agreement: Issues and Proposals for a More Effective Mechanism, has just been published.
Kawase: I don't think that this book provides answers to all the problems, and I would like to ask for criticism and frank comments from its readers. However, I believe that we have been able to comprehensively discuss major issues that have been raised during the nine years since the coming into effect of the WTO Safeguard Agreement. In this regard, I would like to say, with pride, that this book will be a useful reference for government officials and researchers.
***
