WTO DIRECTOR GENERAL LAMY DISCUSSES PROTECTIONISM

UNCLAS SECTION 01 OF 02 TOKYO 000473 SENSITIVE SIPDIS STATE PASS USTR FOR AUSTR ROHDE AND AUSTR CUTLER E.O. 12958: N/A TAGS: ETRD EAGR EINV PREL JA SUBJECT: WTO DIRECTOR GENERAL LAMY DISCUSSES PROTECTIONISM AND DOHA ROUND WITH JAPANESE GOVERNMENT REF: 08 TOKYO 3381 ¶1. SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION. ¶2. (SBU) Summary: World Trade Organization Director General Pascal Lamy focused on the need for economies to guard against protectionism and to promote a reinvigorated Doha Development Agenda (DDA) during his February 24-25 meetings in Tokyo with Foreign Minister Nakasone, Minister for Economy, Trade and Industry Nikai, and Agriculture Minister Ishiba. According to readouts emboffs received from staff for the respective ministers, Lamy expressed appreciation for METI's efforts to monitor protectionist trends globally and told FM Nakasone he hopes to receive an invitation to attend the G20 financial summit in April to address recent measures around the world that restrict trade. Despite Japanese press reports Lamy is "not so worried" now about "Buy American" provisions, the legislation, however, reportedly did come up in his meeting with Minister Ishiba. Officials also report Ishiba said he could not support Lamy's efforts to push for a Ministerial meeting later this year to discuss the DDA. The MAFF Minister reportedly told Lamy working-level negotiators need to achieve greater clarity on next steps before such a Ministerial can occur. He also reiterated the GOJ's position that it could not agree to a lower cap on the number of sensitive agricultural products. End summary. Protectionism -------------- ¶3. (SBU) The WTO Director General Pascal Lamy called for continued global vigilance against protectionism during his meetings with Ministers Nakasone, Nikai, and Ishiba. METI Minister Nikai, responding to a request made by Lamy at Davos in February for Japan, the U.S. and the EU to monitor potentially trade-restricting measures that recently have been put in place around the world, provided the WTO DG with the GOJ's draft report. The WTO Secretariat plans to release its "Report on Trade Related Matters Restricting Global Trade" at the end of March. A senior METI Multilateral Trade System Department official asserted the report only identifies trends that may result in restricted trade in goods and services, but does not attempt to draw conclusions. Press reports note the GOJ's survey covers 40 potentially protectionist measures in 13 countries and regions, e.g., Russia's increased tariffs on liquid crystal television panels and Indonesia's new standards for steel products. ¶4. (SBU) A Ministry of Foreign Affairs (MOFA) International Trade Division official who participated in FM Nakasone's meeting with Lamy said the WTO head hopes to be invited to the G20 Financial Summit. This official described Lamy as "very cautious" in expressing his views on protectionist trends, especially when discussing Russia. He said Lamy generally avoided singling out individual countries for criticism. Neither Lamy nor Nakasone reportedly raised the "Buy American" provisions contained in the U.S. stimulus package. However, according to a Ministry of Agriculture, Forestry and Fisheries (MAFF) International Economic Affairs Division official, Lamy did raise "Buy American" with Minister Ishiba, saying he was concerned about the possibility of protectionism gaining a foothold in the U.S. (Note: Lamy was quoted in a February 25 Nikkei report as saying the WTO currently is "not so worried" about the "Buy American" provision, but that the WTO will closely monitor USG procurement practices. End note.) Doha Development Agenda -------------- ¶5. (SBU) Lamy spent relatively less time discussing the Doha Development Agenda than protectionism, according to our interlocutors. A MOFA official claimed Lamy and other negotiators believe another round of ministerial-level talks must wait until there is more clarity about the political direction of several key economies, most importantly the U.S. and India, which holds general elections in May. Lamy told MAFF Minister Ishiba he wants to convene a Ministerial by early summer, but said this timeline largely depends on whether Washington commits to renewed negotiations. He told Minister Nikai he hopes the new Administration will announce its policy on the DDA before the G20 meeting, and that G8 leaders will follow up with a strong statement of support during their July Summit. Minister Ishiba stated he could not support a ministerial meeting until working-level TOKYO 00000473 002 OF 002 negotiators had reached a clear consensus on next steps. He said "too many outstanding issues" need to be resolved, especially those related to agriculture. ¶6. (SBU) Minister Nikai also raised the need to strengthen anti-dumping measures and expressed Japan's views on "items of interest" related to the February 26 "Environment Friends" meeting in Geneva. However, he did not raise agriculture or non-agricultural market access negotiations. Lamy reportedly expressed appreciation for GOJ plans to provide trade finance-related assistance to private financial institutions in Asia via the Japan Bank of International Cooperation (JBIC). Agriculture and Fisheries -------------- ¶7. (SBU) Minister Ishiba reiterated the GOJ's view that Japan's food security concerns make the DDA's agriculture-related negotiations an especially delicate issue, one he argued that will be even more difficult to address with Japan's impending national elections. Lamy reportedly noted he was well aware of Japan's resistance to proposals to lower the amount of sensitive items for agricultural products, but pointed out many WTO member economies do not concur with Japan. Nakasone, according to officials, disagreed with Lamy's assessment that the WTO had reached consensus on most of the DDA's key agriculture provisions, explaining Japan could not accept the four-percent cap on sensitive products and would continue to insist on an eight-percent cap. Japanese media reported Ishiba as telling Lamy various kinds of agriculture should "coexist" and as also advocating a trading system that would allow "different farming cultures in each nation." On subsidies for fisheries, Ishiba told Lamy Japan disagrees with the U.S. over generally eliminating all subsidies. He claimed some support, in particular if it does not contribute to over-fishing, is needed to protect Japanese producers who are otherwise unable to compete globally. Other Meetings -------------- ¶8. (U) Lamy also used his visit to Tokyo to meet with Chief Cabinet Secretary Takeo Kawamura; Yoshio Yatsu, leader of the Liberal Democratic Party's Agricultural Caucus and Chair of the LDP Research Commission on Comprehensive Agricultural Administration; Koji Futada, another member of the LDP's Agricultural Caucus and Chair of the Research Commission on Trade in Agriculture, Forestry and Fisheries; and Mamoru Mogi, head of the Central Union of Agricultural Cooperatives (JA-Zenchu). Lamy delivered remarks to the Japan Institute of International Affairs (JIIA) and the Japan National Press Club. ZUMWALT