U.S., Japan and S. Korea told to ratify GATT

JAKARTA (JP): The United States, Japan and South Korea have to give commitments ratifying the Uruguay Round before attending the second summit of the Asia Pacific Economic Cooperation (APEC) leadership meeting in Bogor in November, economist Mari Pangestu said here yesterday.

"Otherwise, their participation in APEC will only create a big question mark," Mari told journalists after attending a seminar on the General Agreement on Tariffs and Trade (GATT) held by the Center for Strategic and International Studies (CSIS).

She said if the three countries are not willing to give strong signals ratifying GATT, it will create the wrong perception of APEC as a forum not supporting GATT.

"APEC seems to be a bloc rather than supporting multilateral trade. It's dangerous because the original aim of APEC is to foster multilateral trade, not to create a free trade bloc," Mari said.

Some countries, especially Australia and New Zealand, have hinted of making APEC into an institution. "But, we don't want the institutionalization of APEC."

Next month, trade ministers of APEC countries will convene in Yogyakarta. "Hopefully, there will be a commitment from the three countries on GATT ratification. It's important for them to show strong signals."

Speaking at the discussion, Yorizumi Watanabe, a professor at the Nanzan University of Japan, noted that Japan is likely to ratify the GATT agreement by the end of this year.

He said that Japan truly realizes the importance of ratifying GATT, as without its full participation, the multilateral trade system will be at stake.

"Since the very beginning, Japan has been active in GATT negotiations. And Japan, for instance, has offered more than 100 sectors of services for deliberation, in the role of Japan's so- called initial commitment," Watanabe noted.

Disputes

Japan has also been active in the area of anti-dumping and dispute settlement procedures as East Asia nations have been the main target of dumping investigations.

Of 1,328 investigations in the period of 1985 to 1992, 439 were targeted at East Asian countries and Japan had the highest number at 105 cases, while Indonesia experienced only nine cases.

Besides dumping accusations, East Asian nations have also been the main target of various forms of contingency protections or unilateral actions by the main traders, mainly the European Union and the United States.

In 1992 alone, 95 percent of all voluntary export restrains outside textiles and agriculture were concluded by East Asian countries, or 75 out of the 79 cases.

"Therefore, the new agreement (GATT 1994) will produce better trading environment for East Asian traders, including Japan, South Korea, Taiwan and others as it eliminates protectionism which hinders trade efficiency and consumers' welfare," Watanabe said.

However, he warned that a multilateral trade agreement of GATT could easily be eroded by unilateral actions or by the increasing number of investigations on dumping practices.

As East Asian countries have been the main target of investigations and protectionism, Watanabe suggested that countries in this area should take a more active role in GATT negotiations, especially in environmental and labor issues.

"We have to take part, giving opinions, lobbying and so forth on what becomes the concern of developing countries, so that it is not only developed countries which decide the common sets of policies on environment and labor issues, but also developing countries," Watanabe said. (rid)