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Provisional Translation

Urgent Recommendations
Toward the WTO Cancún Ministerial Conference and Beyond

July 22, 2003
Nippon Keidanren
(Japan Business Federation)

I. Overcoming the Crisis of the Doha Development Agenda

The Doha Development Agenda (DDA) currently stands at a major crossroads, with Members failing to reach agreement on agricultural trade negotiating modalities at the end of March this year. Furthermore, Members also failed to reach agreement at the end of May on non-agricultural market access negotiating modalities and to reach conclusion on negotiation of dispute settlement understanding. The number of countries submitting initial offers for services trade negotiations by the end of March deadline, as well as the contents of those offers, were far from satisfactory.

Under such circumstances, the 5th WTO Ministerial Conference will be held in Cancún, Mexico, this September. The success of the DDA is essential for world economic growth and it is essential to galvanize the political determination of the 146 member countries to make progress on negotiations.

Due to the critical situation of the DDA, Nippon Keidanren has decided to propose the following urgent recommendations.

II. Resolving the Critical Issues at Cancún Ministerial

Nippon Keidanren strongly urges that agreement by single undertaking, including negotiation issues launched at Cancún, is reached by the January 1, 2005 deadline.

For the success of the Cancún Ministerial Conference, and to breakthrough the crisis of DDA, Nippon Keidanren urges Members to resolve the issues on agricultural trade and developing countries.

(1) Breaking Out of the Stalemate of Agricultural Negotiation

Nippon Keidanren regards the negotiations on agriculture as one of the most important issues in the DDA. There is a possibility that the revised version of the draft of the modalities posed by the Chairman of Negotiating Group in February would be issued before the Cancún Ministerial Conference, and Nippon Keidanren strongly urges Members, including Japan, to come out boldly to reach conclusion of negotiating modalities. Furthermore, Nippon Keidanren regards it important to maintain the balance of the rights and obligations of both the exporting countries and importing countries when promoting liberalization.

  1. As the world's largest importer of agricultural products, with annual imports surpassing exports by approximately US35 billion dollars, Japan contributes significantly to the economic development of exporting nations. Nippon Keidanren appreciates the Government of Japan's effort in responding to the Uruguay Round accords by introducing liberalization. It is the position of Nippon Keidanren that Japan should make a decision based on national interest, including both consumers and producers. Japan should implement reforms in domestic agricultural policy that boost competitiveness, while at the same time aiming for a phased reduction of domestic support and tariffs, to make further improvements to market access. Nippon Keidanren holds that, with the adoption of "Uruguay Round approach" that allows variation with regard to individual items, it should be possible to significantly reduce tariffs and domestic supports while excluding certain particularly sensitive items from the application of such reductions.

  2. USA should implement significant cuts in export subsidies, including export credit. USA must cut counter cyclical payments with a view to the revision of Farm Security and Rural Investment Act of 2002.

  3. EU should significantly cut export credit. At the same time, Nippon Keidanren welcomes the move by the EU regarding the reform of the Common Agricultural Policy in order to reduce the prohibited domestic support, and requests for ongoing efforts for domestic reform.

  4. Canada and Australia, key members of the Cairns Group, are seeking as exporters to control trade in wheat and other products through monopoly practices. Nippon Keidanren maintains that disciplines on export state trading must be established at the WTO.

  5. The majority of developing countries are net importers of agricultural products. Agricultural negotiations must begin with the revision by developed countries of distorted trade measures. Nippon Keidanren, however, also calls on developing countries to pursue liberalization based on strengthened competitiveness over the mid- to long-term.

(2) Ensuring the Benefits of DDA to Developing Countries

For the success of DDA, cooperation to ensure that the benefits of negotiations accrue to all WTO Members are essential.

  1. Developed countries must work with developing countries, and particularly least developed countries (LDCs), on the basis of favorable treatment, more than full reciprocity, through liberalization in sectors that developing countries have export interests, expansion of generalized system of preference (GSP), and other means. Nippon Keidanren also calls on Members to take the lead in pursuing solutions to the "implementation issues" within the framework of existing WTO agreements. Furthermore, developed countries should actively pursue capacity building measures, in areas such as the implementation of the Uruguay Round accords, training of competent personnel, and the establishment of domestic laws and systems. Nippon Keidanren will continue its cooperation in capacity building by utilizing the private sector's knowledge, expertise and experience.

  2. Developing countries should recognize that the liberalization of trade in goods and services, and the creation of new rules on investment and trade facilitation will bring substantial benefits to both developed and developing countries alike; by not only stimulating the flow of foreign capital, but also by boosting technology transfer and job creation. Thereby, warranting active participation in the DDA.

III. Priority Issues for Nippon Keidanren

(1) Launching of Negotiations on Investment Rules

Nippon Keidanren strongly urges that explicit agreement to launch negotiations on investment be reached at the Cancún Ministerial Conference, and that the negotiations be concluded within the timeframe of the DDA. Since trade and investment have become inextricably linked, Nippon Keidanren strongly calls for the promotion of liberalization and the creation of rules on investment. For this purpose, it is essential to establish a multilateral framework on investment rules at the WTO to ensure stable, transparent and predictable investment environments essential for the growth of the world economy. Members should consider an investment framework which especially focuses on transparency and liberalization to the extent agreeable to developing countries giving full consideration to the development policies of these countries.

(2) Further Liberalizing the Movement of Natural Persons

Nippon Keidanren recognizes that the facilitation of movement of goods, services, natural persons, capital and information across borders are indispensable for efficient business activities. Unfortunately, the movement of natural persons is not of sufficient scale compared with those of other business resources.

Nippon Keidanren recommends the prompt liberalization of: (1) all intra-corporate movements, including those of executives and managers, and those implemented for the purpose of education, training and the development of skills; (2) movement based on individual contracts of natural persons working in specialized and technical fields; and (3) temporary stay, firstly within the WTO trade in services negotiations. Developed countries must also positively consider the liberalization of movement of unskilled workers, an issue in which developing countries have a particularly strong interest, with application of economic needs tests, if necessary. Developed countries should also maintain domestic institutional infrastructure in anticipating the movement of those workers. Nippon Keidanren also calls for Members to go beyond their schedules of specific commitments in trade in services to ensure the transparency, simplification and expedition of their immigration regulations and procedures

(3) Other important items

Trade in Services

Nippon Keidanren strongly recommends the Members to submit their initial offers promptly, to improve national treatment and market access, and establish effective rules.

Non-Agricultural Market Access

Nippon Keidanren strongly urges that an agreement be reached on modalities that includes the formulas which apply for both developed and developing countries alike, and zero-for-zero on such sectors as consumer electronics and electric appliances and parts thereof and motor vehicles and parts thereof. Furthermore, expanded membership of the Information Technology Agreement (ITA) should be sought and tariffs eliminated on a wider range of goods.


Nippon Keidanren considers that it is highly desirable that negotiations progress seamlessly after the Cancún Ministerial Conference for the improvement of the AD agreements


Nippon Keidanren calls for strenuous implementation to achieve the following policy objectives: (1) revitalization of the WTO work program on e-commerce, (2) expansion of the existing moratorium on customs duties regarding online/electronic/digital transactions to a permanent status, (3) application of the GATT level rule to online/electronic/digital transactions to be formally recognized as a equal status to the trading transactions of physical goods, (4) commitment to the full liberalization of IT and e-commerce.

Trade Facilitation

Nippon Keidanren strongly urges that agreement be reached at the Cancún Ministerial on the launching of negotiations to create the rules for the clarification, simplification and harmonization of trade procedures, and that the negotiations be concluded within the timeframe of the DDA.


Nippon Keidanren strongly urges all Members to ensure the transparency of domestic regulations, which is vital to guaranteeing the benefits of liberalization.

Please see [ Recommendations by Sectors ] in detail.

IV. Actions Undertaken by Nippon Keidanren

Nippon Keidanren has issued seven general position papers in relation to the WTO New Round Negotiations #1 and lobbied the negotiators and the WTO Secretariats towards the implementation of its recommendations #2.

In addition to submitting proposals to the Government of Japan, Nippon Keidanren will actively seek out those in Japan involved in agriculture and all other relevant fields, as well as the WTO Secretariats, members of the Quad and other developed countries, developing and transitional countries to communicate these recommendations and work for their implementation. Nippon Keidanren will also continue to strengthen its cooperative links with business federations in Japan as well as those in developed and developing countries.

#1 The position papers are as follows: (1) In May 1999, Challenges for the Upcoming WTO Negotiations and Agendas for Future Japanese Trade Policy; (2) in March 2000, Expectations for the WTO Negotiations and Requests for Liberalizing Trade in Services; (3) in June 2001, Towards the Implementation of Strategic Trade Policies: A Grand Design of Japan's Policy as a Nation Built on Trade; (4) in July 2001, Basic Position and Recommendations for the WTO Doha Ministerial Conference and A New Round of Negotiations; (5) in June 2002, Trade in Services Negotiations on the WTO - Proposal Concerning the Movement of Natural Persons; (6) in July 2002, Toward the Creation of International Investment Rules and Improvement of the Japanese Investment Environment; (7) In September 2002, Nippon Keidanren WTO Mission Position Paper
#2 Nippon Keidanren has sent missions to Geneva and Brussels in 23-28 November 2000, 1-4 October 2001 and 23 September-1 October 2002.

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