Japan Advises Developing Nations On Tariff Cuts

Japan’s Economy, Trade and Industry Minister urges developing countries to be more flexible about cutting tariffs on industrial goods.

TOKYO (Kyodo) - Economy, Trade and Industry Minister Akira Amari urged developing countries Tuesday to be more flexible about cutting tariffs on industrial goods.
''There is the view that gradual lowering of tariffs would spur investment in developing nations. They need to understand there are many examples of success,'' Amari said at a news conference, when asked about Japan's stance on stalled market liberalization talks under the World Trade Organization.
He said developing countries should see that lowering the hurdle of non-agricultural market access, or NAMA, would help increase investment in themselves, rather than focusing on the view that slashing manufacturing tariffs will only benefit industrialized nations.
Amari said companies will not consider investing in developing nations if they do not have supporting industries and tariffs are high, making it more costly to import parts, for example. If countries have low tariff rates, companies find it easier to invest even if they do not see sufficient levels of supporting industries in the countries.
At the same time, Amari indirectly urged the United States and the European Union to lower the hurdle of agriculture subsidies and tariffs, which would help the developed world increase farm exports.
When a crucial meeting of the United States, the European Union, Brazil and India—the so-called ''Group of Four''—collapsed last week, Brazil and India criticized Washington for failing to offer deep enough cuts in trade-distorting farm subsidies.
Washington and Brussels, for their part, blamed the emerging economic powerhouses for refusing to offer new market opportunities for manufacturing exports.
Amari said he wants to play a role in narrowing gaps in positions on trade liberalization between developed and developing economies, especially in light of tariff cuts in industrial products, when he hosts a meeting with developing nations on the sidelines of the July 5-6 trade ministerial gathering in Australia of the Asia-Pacific Economic Cooperation forum.
He said it is important for Japan to gather views of developing nations that are more forward-looking and flexible in dealing with NAMA.
Now that the four influential trade powers failed to break the impasse over the WTO's Doha Round, Amari said that no one, including Japan, ''can afford to just sit and watch'' the multilateral negotiation process at the WTO's headquarters in Geneva as the year-end deadline to end the round draws closer.
''It is necessary (to think) how we will support the multilateral negotiations,'' Amari said. ''It is important to narrow the distance between developed and developing countries. In this respect, the meeting with developing nations in Australia will be an important one.''
Key WTO members have been striving to agree on the framework of a deal to reduce barriers to commerce in agriculture, manufacturing and services by the end of July, leaving enough time for technical work on a final accord by the year's end.
Without a breakthrough by August, the Doha Round could be put on hold for several more years—or even fail altogether—as agricultural subsidy and tariff concessions are unlikely in 2008, the year of U.S. elections, and 2009, when elections are scheduled in India.
Since its launch in 2001, the Doha Round has missed deadline after deadline as negotiators have failed to find common ground on issues related mainly to farming, but also market access for industrial goods and services.
APEC groups Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, South Korea, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.
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