Prospects for the WTO system and FTAS

Abstract

The Doha Round of multilateral trade talks under the WTO is faltering badly. A confrontation between developed and developing countries is bogging down efforts to push negotiations forward. Tired of difficult progress in the multilateral trade negotiations, industrialized countries are now tending to push bilateral and regional free trade agreements(FTA). Direct effect of FTA on the WTO system is important. The problem concerning FTA is whether FTAs are building blocks or stumbling blocks to global free trade. Using FTA may be an effective strategy, but it is also risky.It is thus important to reinforce the WTO system whose job is to promote multilateral trade liberalization at a time FTAs are becoming common. If the WTO system loses effect, world trade will shrink, hurting the industrial countries. The major trading countries must play a constructive leadership role to prevent a collapse. What should Japan do to foster a new round? Japan must make a bigger offer, such as opening its agricultural markets much wider to imports. Real answer is domestic agricultural reform.