GOJ REACTIONS ON DOHA ROUND AFTER HONG KONG

UNCLAS SECTION 01 OF 02 TOKYO 000077

SIPDIS

SENSITIVE
SIPDIS

STATE ALSO PASS USTR FOR A/USTRS CUTLER AND DWOSKIN
USDOC FOR ITA/OFFICE OF JAPAN

E.O. 12958: N/A
TAGS: ECON ECIN ETRD EINV PGOV JA
SUBJECT: GOJ REACTIONS ON DOHA ROUND AFTER HONG KONG
MINISTERIAL


Summary
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1. (U) WTO member states obtained about as much as they
could under the circumstances at the Hong Kong Ministerial,
according to Japanese officials from several ministries at a
symposium hosted by Aoyama Gakuin University's WTO Research
Center. The Director-General of the Agriculture Ministry's
International Affairs Bureau, Kaoru Yoshimura, insisted there
had been progress on agriculture and was confident that
negotiators could come up with a final agreement. A top
Foreign Ministry official, Seiichi Kondo, stressed to the
audience the importance of a successful Doha round, saying it
would resolve economic disputes that would otherwise turn
into political issues. Akira Kamitobe, of the Finance
Ministry, focused on the need to improve existing trade
rules, in particular the anti-dumping agreement -- which
would be key to boosting Japan's economic growth potential.
Although Japan has been a fairly passive player in advancing
the Doha talks so far, this conference demonstrates that the
government at least sees the need to put a positive public
spin on the importance of reaching a successful agreement.
END SUMMARY.

MOFA: Spinning Story
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2. (U) Ambassador Seiichi Kondo of the Foreign Affairs
Ministry's Economic Affairs Bureau stressed the importance to
Japan that the Doha Trade Round succeed. He emphasized the
WTO,s importance in resolving trade disputes. The
difficulty in trying to move forward more quickly in Hong
Kong, he said, reflected the fact that reaching consensus is
becoming much more difficult -- particularly as the WTO
membership becomes larger and more diverse. It is no longer
possible, he noted, for the United States single handedly to
lead other WTO member countries. Interests in the trade
organization vary widely. Kondo added that it was hard for
government negotiators to forge deals when non-government
entities -- the business sector, media, academic
institutions, and other interest groups -- clamor to be
heard. He said that WTO negotiations will move more smoothly
in the future when governments learn to collaborate better
with these groups.


3. (U) Kondo conceded what had become increasingly obvious
in recent months: that agriculture was front and center the
focus of the Doha Development Round, whether the attention
was merited or not. He also conceded that, owing to domestic
political constraints, Japan's position in the talks --
particularly with respect to agricultural market access and
domestic supports -- was difficult. Kondo underscored,
however, that free trade and a successful Doha Round was
critical to Japan's economic expansion and farm sector reform
would be important to improving Japan's outlook.


4. (U) Meeting deadlines set in Hong Kong mattered, Horohisa
Soma, of MOFA's International Trade Division, suggested to
the gathering. Although there was some possibility that the
United States would extend Fast Track authorization beyond
its expiration date, Japanese negotiators could not count on
any extension. Therefore a trade agreement needed to be
wrapped up well in advance of mid-2007. For his part,
somewhat tautologically, Kondo said that agreeing to
modalities by the end of April, as called for in the
Ministerial Declaration, depended on whether WTO
Director-General Lamy could draw constructive responses from
negotiators. Kondo added that Lamy's track record was good.
Another area that would require more attention in coming
months was Trade in Services, progress on which, according to
Kondo, had been uneven.

METI: Plodding Ahead
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5. (U) There were few surprises in Hong Kong, according to
Shigehiro Tanaka, Director of METI's Multilateral Trade
System Department. Claiming to be speaking in his personal
capacity, Tanaka told the audience that the Hong Kong
Ministerial did not produce any surprises. The METI official
made a point of praising Brazil and India for their consent

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to the Swiss Formula for non-agricultural market access
(NAMA). He was also pleased with sectoral negotiations in
services, such as those for telecom. They had been carried
out unofficially between member countries and announced
officially in Hong Kong.

MAFF: Agriculture Gets Too Much Attention
--------------


6. (U) Kaoru Yoshimura, the Director-General of the
International Affairs Bureau at the Agriculture Ministry,
told the symposium that the media -- Japanese and
international -- put too much focus on agriculture
negotiations, which have dominated the Doha Round so far. He
praised Agriculture Minister Nakagawa -- his boss -- for
pushing to include Japan in G-4 talks. He added that it was
in Japan's interest to include capacity building for
developing countries in its agenda of priorities, as well as
pushing for more progress in NAMA and services talks at the
same time as agriculture. Yoshimura was confident that
agriculture negotiations, although still stymied on market
access, had accomplished a lot on domestic support and export
subsidies. Much negotiating remained before the April 30
deadline.

MOF: Fixating on Anti-dumping Rules
--------------


7. (U) Akira Kamitobe, the Director of the Finance
Ministry's Customs and Tariff Bureau, gave a brief
presentation on MOF,s role in the discussion on WTO trade
rules. His focus was on anti-dumping and safeguard
agreements, subsidies, and countervailing measures. If the
Doha Round produced an agreement that made trade rules
clearer and more predictable, he said, this was good for
everybody. Japanese business would benefit from better
anti-dumping rules, including he singled out, better sunset
provisions; anti-dumping duties should be phased out after a
fixed period. Kamitobe stressed also the importance of
improving trade facilitation and all its aspects -- this
would be good for developing countries and rich ones alike as
they move forward.

Comment
--------------


8. (U) Although Japan has been a fairly passive player in
advancing the Doha talks so far, this conference demonstrates
that the government at least sees the need to put a positive
public spin on the importance of reaching a successful
agreement. GOJ officials participating in the Aoyama Gakuin
University symposium on the Doha Round were not the first
ones to be out making the public case that successful trade
talks are good for Japan. Owing to the sensitivities of the
talks politically, officials have not been clear about how
they intend to push them toward a successful conclusion. But
officials have been out making the public case -- at least on
a general level, trying to explain to a skeptical public the
advantages of a strong international trade agreement.
DONOVAN