Will Trump administration flout intl rules under its new trade policy?

The Yomiuri ShimbunThe latest U.S. report signifies that the country would disregard international trade rules if they were adverse to its own interests. It would even go so far as to implement unilateral countermeasures. That stance must be viewed as too self-serving.

The kind of course to be adopted by the administration of U.S. President Donald Trump in implementing trade policy under its touted “America first” slogan is becoming clear.

The Office of the U.S. Trade Representative has publicized an annual report that states the United States will not abide by any decision to be made by the World Trade Organization if the decision undermines its interests.

The WTO agreement lays down rules to be observed in pursuit of the promotion of free trade. The course of action newly set by the United States is tantamount to declaring that the nation will turn its back on the order of trade preserved by nations around the world, placing priority on that purpose over the nations’ respective interests.

When it comes to complaints filed with the WTO against trade partners in a dispute, the country to have brought the most cases before the organization is none other than the United States. The U.S. stance means that the United States will get a trade partner to comply if it wins in a WTO dispute, but will not admit its fault if it loses. Such an opportunist approach cannot be accepted.

What cannot be overlooked is that the annual report refers to Section 301 of the U.S. Trade Act — a provision that could violate WTO rules if it is invoked — and states that the clause “can be a powerful lever” with which to encourage other nations to open their markets.

The Section 301 provision states that the United States can unilaterally impose high tariffs and other sanctions on trade partners.

In the past, it served as the measure of last resort for the U.S. government, which brandished that provision every time Japan and the United States were locked in a trade dispute over such products as cars and semiconductors. Under former President Bill Clinton’s administration, the United States presented a plan to slap 100 percent tariffs on luxury car imports from Japan.

Fact-based talks needed

The Trump administration has said that it will shift the focus of efforts from the existing multilateral trade pact to bilateral trade talks. If the U.S. government intends to hint at invoking the 301 clause and to adopt an intimidating stance in this respect, it cannot be overlooked.

The Trump administration must correctly grasp the realities of Japan-U.S. trade, first and foremost. In an opinion paper recently submitted to the WTO, the U.S. government criticized the existence of “a variety of nontariff barriers” in the Japanese car market, while also viewing “substantial” tariffs on agricultural products as a problem.

Both assertions are irrelevant.

Japan does not impose tariffs on imported cars. Its automobile inspection system, which the United States has singled out for criticism, is not designed to target any specific countries, either. European cars are seeing a steady sales increase in Japan.

In developing products and devising sales strategies, U.S. car manufacturers are neglecting efforts to contrive good ways and means of attracting Japanese consumers. This seems to be the main cause of sluggish sales of U.S. automobiles in our country.

In regard to agricultural products, too, the Trans-Pacific Partnership free trade agreement was to have realized a great reduction in tariffs, including those imposed by Japan on beef. The United States has only itself to blame for giving up on such benefits because of its own decision to withdraw from the TPP pact.

A Japan-U.S. economic dialogue aiming to extensively discuss trade and other bilateral issues is set to start next month. Japan should deepen fact-based, constructive discussions with the United States, not yielding to misguided U.S. assertions.

(From The Yomiuri Shimbun, March 15, 2017)Speech


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