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

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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