The abortive efforts of the world's trade ministers to launch a new round of global trade talks in Seattle last November put the five-year-old World Trade Organization in the spotlight as never before. The international focus on the Seattle meetings was in part a consequence of the growing realization that the Uruguay Round of multilateral trade negotiations under the General Agreement on Tariffs and Trade, which was completed in late 1993, had resulted in changes to the global trade regime that were more far-reaching than were realized at the time. The WTO already has significantly altered trade policymaking in the United States and Japan. For example, Japanese trade policy has become more multilaterally oriented, although the durability of that thrust remains in doubt.
The ways in which the two nations position themselves for a possible resumption of international trade negotiations or cope within the existing framework will have important implications for the world trading order. Japan likely will continue to be a relatively passive participant in the development of a future liberalization agenda. Moreover, Japanese thinking is not expected to be influenced much by the new attitudes toward the WTO that were on display in Seattle. U.S. opinion, in contrast, will be shaped not only by the stance of the president elected in November but also by a sense among some Americans that U.S. trade policy since World War II has been too single-minded in its pursuit of increased exports by corporate America. These critics want to put on the table such considerations as labor and environmental standards as well as the appropriate role of science in the determination of trade restrictions. While such a position can be construed as protectionist and often does serve as cover for that objective policymakers on both sides of the Pacific are learning that the new opinions on trade are not so easily categorized.
RULING PARTIES HANG ON TO LOWER HOUSE
MAJORITY, ENDORSE MORI AS PREMIER
--- by Barbara Wanner
After weeks of speculation that gaffe-prone Prime Minister Yoshiro Mori might drag his three-party ruling coalition down to defeat in the June 25 lower house elections, the Liberal Democratic Party and its allies, the New Komeito and the New Conservative Party, emerged victorious albeit barely. The alliance clinched a 271-seat absolute majority in the 480-member House of Representatives, exceeding by 17 its target of 254 seats. The results mean that the LDP, the New Komeito and the New Conservative Party will continue to chair all standing committees in the lower house. That control, at least in theory, should facilitate action on key legislation. But the 56.5 percent of seats now occupied by members of the three parties is a far cry from the two-thirds share they had before the elections.
ELECTION RESULTS COMPLICATE ECONOMIC
POLICYMAKING IN JAPAN
--- by Douglas Ostrom
Pundits around the world interpreted Japan's June 25 lower house election results as a wake-up call for the triparty coalition government. Judging by the reaction of financial markets to the large losses sustained by the Liberal Democratic Party and its partners, however, somebody must have pushed the snooze button on the political alarm clock. On the first day of trading following the elections, the Nikkei average of 225 stocks listed on the first section of the Tokyo Stock Exchange and the yen barely budged. The Nikkei, for example, was off a tiny 0.2 percent. That development was not an indication that the elections would have no effect on economic strategy. Instead, it was a sign that the policy impact was particularly hard to predict.
JAPAN'S SECURITIES MARKET HITS MILESTONES
AND ENCOUNTERS POTHOLES
--- by Jon Choy
Financial industry executives and regulators in Japan have worked long and hard to make the country's financial markets a center of global activity. Not only was this development seen as a natural consequence of Japan's position as the world's second-largest economy, but such an outcome also was considered vital to the nation's continued industrial strength and future growth. Achieving this goal, however, has been anything but simple. Close ties between government regulators and businesses as well as myriad laws and rules have greatly complicated and retarded the process of internationalizing Japanese financial markets. Recent events show how far the country has come in its quest and the distance that still must be covered.
JAPAN LOOKS TOWARD RESUMPTION OF AID TO
--- by Marc Castellano
At a June 25-26 bilateral meeting in Yangon (formerly Rangoon), some 50 representatives from government, industry and academia discussed Japanese support for economic reform in Myanmar (previously Burma). Tokyo has provided only minimal help to the Southeast Asian nation since the military-dominated State Law and Order Restoration Council subsequently renamed the State Peace and Development Council took control in a 1988 coup. However, in a historic meeting held on the sidelines of the November 1999 summit of the Association of Southeast Asian Nations, then-Prime Minister Keizo Obuchi promised junta leader Gen. Than Shwe that Japan would consider resuming limited financial aid if Yangon made substantial progress in reforming its political and economic structures (see JEI Report No. 47B, December 17, 1999).