While new developments in the regional trade liberalization agenda (FTAs and EPAs) are reported almost on a daily basis, the pace of WTO's Doha Round of multilateral trade negotiations, launched in Doha, Qatar in 2001, is excruciatingly slow. Can we afford to be complacent about this situation? After all, Japan has greatly benefited from the multilateral trading system, first under GATT and now under WTO, and the Japanese government has traditionally been strongly committed to the maintenance and strengthening of this system. All the regional economic integration agreements concluded so far are purportedly in compliance with the WTO agreements. Indeed, these agreements have served as the basis for their negotiation. These developments highlight the need to revitalize discussion on multilateral trade negotiations. What perspectives can foster such discussion?
In this Symposium, we approach the issues from the following four perspectives: (1) relationship of the multilateral trading system to the regional trade liberalization agenda; (2) functiovning of the WTO system; (3) domestic processes of trade policymaking; and (4) global governance; through interdisciplinary discussions among economists, political scientists and legal scholars. While specific issues such as antidumping rules and agricultural trade (for good reason) receive more attention, our aim is to focus primarily on the underlying "philosophical" problems behind the difficulties in these specific areas. We hope that the discussions will lead to concrete proposals for the Japanese government as it struggles to contribute to the successful conclusion of the Doha Round.
1) Regional Trade Liberalization Agenda
At first sight, the growing trend toward regionalism appears to diminish the relative importance of the multilateral trading system, as described in the Sutherland Report ("The Future of the WTO") published earlier this year by the WTO, which warns about the danger of erosion of non-discrimination caused by the networks of preferential trade agreements. However, as noted above, the spread of regional economic integration is a fait accompli. Should we continue to view this phenomenon as something undesirable (a "stumbling block") for the development of the multilateral trading system, or, does it actually represent a viable alternative to the multilateral trading system, which is showing signs of "negotiation fatigue"? If regional economic integration agreements and the multilateral trading system are compatible, what are the parameters that make them mutually supportive?
2) Functioning of the WTO System
With the total number of WTO member states reaching 148, the organization's consensus-based decision-making system has clearly reached its limit. A more effective mechanism for decision-making is thus called for. However, reforms to this process must take into account of the positions of developing countries, many of which feel marginalized in the multilateral trading system. Also, in order to enhance the legitimacy and accountability of the WTO, there is a clear need to engage in a constructive dialogue with civil society groups, although "co-opting" them could prove difficult. In this connection, special attention should be given to the issue of the dispute settlement mechanism, which has, in a way, become a victim of its own success: critics complain of excessive "legalization" in the WTO, and implementation of dispute settlement rulings has become a serious issue, not only in the United States and Europe but for almost every major user of the dispute settlement mechanism, including Japan. How should the dispute settlement mechanism be reformed so as to enhance its legitimacy and effectiveness, while building upon its track record of success?
3) Domestic Process for Trade Policymaking
As noted above, the "usual suspects" in protectionist lobbying are alive and well in agriculture, steel, textiles and other sectors. This is a perennial issue to which governments have not found an effective answer, either in relation to the trade negotiations themselves or with respect to the implementation of specific rulings in the dispute settlement process. In addition to these traditional naysayers, various other stakeholders (e.g., business and civil society groups) are becoming vocal in the negotiations and dispute settlement processes, particularly in the United States and Europe. Japan lags behind in this trend. Nongovernmental groups (apart from traditional protectionist lobbies) are not so active in the decision-making process in the formation of trade policies in Japan, but their interest is growing. How do these groups participate in the domestic process of trade policymaking? What has been the experience of the United States in this regard? How can we construct an effective mechanism for public-private partnerships in trade matters in Japan?
4) Global Governance
Since the 1990s, the GATT/WTO system has been asked to be more sensitive to nontrade concerns. This was first seen in the issue of "trade and environment"; now such issues include labor and culture as well. In the Doha Round, the issues of poverty and development have come to the forefront of the negotiations as more and more developing countries actively participate in the process. What is noteworthy is that these issues are pursued not only by member governments but also by civil society groups. To address these questions, the WTO may have to be transformed into an international economic institution for global governance. Can it be? Should it be? If this is a desirable outcome, how should we design the governance structure of the new organization?
These are some of the major issues we will touch upon at the upcoming RIETI Policy Symposium.
