JAPANESE THINKING ON UPCOMING WTO MINISTERIAL

C O N F I D E N T I A L SECTION 01 OF 02 TOKYO 001962

SIPDIS

STATE PASS USTR FOR MROHDE, WCUTLER, MBEEMAN
STATE PASS USDA FOR DMILLER

E.O. 12958: DECL: 07/15/2018
TAGS: ETRD JA PREL WTRO
SUBJECT: JAPANESE THINKING ON UPCOMING WTO MINISTERIAL
MEETINGS

Classified By: CDA Robert F. Cekuta, for reasons 1.4 (B) and (D)


1. (C) Summary: Ministry of Economics, Trade and Industry
(METI) DG for Multilateral Trade Ogawa met with EMIN July 15
to outline thoughts on the upcoming WTO ministerial meeting
on the Doha Development Agenda. Ogawa argued the U.S. and EU
need to help establish a positive tone at the start if the
Ministerial is to be successful. The U.S., he continued,
should play the role it played in earlier rounds of setting
out clearly what it would be prepared to do if other members
tabled serious offers. He said he thought the EU needs
something on geographic indicators and noted the importance
of "anti-concentration clauses" for Mandelson to keep the
Germans and other EU members on board. He also suggested
differences between the U.S. and Japan, for example on
anti-dumping, should be discussed after achieving overall
agreement among the parties on modalities. He advised METI
Minister Amari and MAFF Minister Wakabayashi will go to
Geneva. End summary.


2. (C) On July 15 EMIN met with Ministry of Economics, Trade
and Industry (METI) Director General for Multilateral Trade
Tsunehiro Ogawa. Ogawa requested the meeting, between trips
to Geneva, to discuss the Doha Development Agenda in advance
of Ministerial meetings in Geneva scheduled to begin July 21.
Ogawa advised METI Minister Amari would leave for Geneva
July 18 and MAFF Minister Wakabayashi would go July 17.


3. (C) Ogawa opened saying two questions are important right
now for the U.S. and Japan: how do we each view key issues,
and how can the U.S. and Japan best cooperate so that the
upcoming Ministerial is a success. Ogawa felt prospects for
a solid DDA outcome may depend on the tone set at the start
of the sessions and that a strong, clear initial U.S.
statement outlining what the U.S. would be prepared to do in
exchange for specific offers from other members will be
essential. The U.S. had played such a role, he said, in the
Uruguay and other previous trade rounds. Ogawa therefore
hopes the U.S. will lead off with a strong offer; countries
continuing to hold their cards close would lead to an
unproductive atmosphere. He also commented that the U.S.
offer on agriculture would have to show substantial cuts in
"overall trade distorting domestic subsidies" to be widely
accepted. Interestingly, Ogawa did not mention the issue of
disciplining export restrictions. EMIN noted steps the U.S.
had taken in the past and added Japan and others have
important roles to play in terms of setting a positive tone
and moving the talks to a successful conclusion.


4. (C) Ogawa stated the European Union will be the other
critical factor. He said certain issues, such as language on
anti-concentration, will be important to Germany and enable
Mandelson to keep the French in line. In addition,
accommodation on geographic indicators will be needed for him
to maintain Italian and Spanish support. He noted, however,
that the Commission is in a weak situation in terms of the
WTO since additional protections for geographic indicators
are outside the single undertaking. Ogawa also questioned EU
wisdom in agreeing with some developing economies to link
commitments on geographic indicators with provisions in the
Convention on Bio-Diversity. Ogawa thought that while the
tactic might garner some developing country support,
pharmaceutical and other companies in the EU might oppose the
move.


5. (C) Noting the DDA's development imperative, Ogawa
observed less developed members focus on calling for more
duty-free and quota-free access to major developed markets.
In his view, a solution to the major issues would enable
resolution on these points. However, if we get stuck on the
big issues, then the members will want to raise their
numerous smaller concerns as well.


6. (C) Concerning what is needed to bring or keep key

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developing economies on board, Ogawa said Brazil already has
some gains and hopes for more on agriculture, but is not
likely to sink a deal if there is agreement among the other
parties. India is not as difficult as it has been going into
past ministerials and, Ogawa opined, while it has outstanding
concerns, hopefully will not block overall progress in the
DDA. Should India look like it is willing to play the
spoiler, however, Ogawa hopes the U.S. might use bilateral
leverage to encourage a constructive position. China would
be a major beneficiary of a successful round, but does not
seem to realize it. China, Ogawa continued, has given little
thus far and Chinese participation in sectoral initiatives
will be vital to achieving the critical mass needed for a
successful outcome. As a recently acceded member, China may
be allowed a little more time for transition, Ogawa said, but
given its rapid growth and strong trade balance, any such
transition times should be limited and China held to a high
standard. Ogawa said he sees South Africa's issues mostly
resolved. On graduation of members like Taiwan and Korea to
developed economy disciplines, Japan favors encouraging them
behind the scenes, and in advance of formalizing offers, to
press them voluntarily to accept higher standards.


7. (C) Turning again to cooperation between the U.S. and
Japan, Ogawa noted our differences on anti-dumping as well as
agriculture but said it is better to postpone discussing
differences until after agreement on modalities to facilitate
general cooperation within the WTO. Both sides acknowledge
the need for a robust agreement in order to sell it to their
legislatures and to have credibility with/support from
business.


8. (C) Ogawa concluded with his rough assessment that we have
a better than a 50 percent chance of closing a deal. He
reiterated his view that two essential factors next week will
be a strong U.S. offer and U.S. leadership, and strong EU
commitments and the EU Commission's ability to make the
necessary movements. He also noted, while we need to make
the DDA a success and deliver real benefits for developing
members. Once this round is concluded members will need to
consider new approaches if they decide in future years to
undertake broad measures to liberalize global trade. This,
he continued, is likely the last round following the model
developed in the GATT.
Cekuta