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The Globe and Mail Thursday, August 3, 2000
WTO's next challenge? Unfair use of sushi
By Jim Stanford
This just in: A dispute-settlement panel of the World Trade
Organization has ruled that Japan's traffic laws constitute a barrier to
trade and must be changed.
The judgment is considered a major victory for North American and
European auto producers, who argued before the WTO that Japan's
requirement that vehicles drive on the left side of the road established an
unfair barrier to imports of cars and trucks.
As one auto-industry lobbyist explained, "The Japanese government
literally forces its citizens to drive on the wrong side of the road. It's
the
major reason why they don't buy our left-hand-drive vehicles."
The WTO panel is similar to those that forced Canada to abolish the
auto pact, its pharmaceutical patent laws, its domestic magazine policy,
an aerospace technology program, and several agricultural marketing
boards.
The Japanese government must now enter into negotiations with
other countries to determine a timetable for reforming its traffic laws.
Sales of imported vehicles in Japan are expected to enjoy an immediate
boost as a result of the WTO decision. Large North American sport-utility
vehicles, such as the Dodge Durango and the tank-like General Motors
Hummer, are likely to experience the greatest increases in market
penetration thanks to their enhanced ability to withstand head-on
collisions.
International Trade Minister Pierre Pettigrew hailed the WTO's
decision as a victory for free trade. "Sure, there will be short-run
adjustment costs," he admitted, referring to the temporary increase in
head-on crashes. "But, in the long run, the Japanese will start to focus
their skills and resources in those industries where they are more
efficient."
Emboldened by the WTO decision, foreign automakers plan to
launch other complaints against Japanese trade practices. Sources
within the industry hint that the next challenge may target the unfair use
of the Japanese language. "Japanese customers can hardly make sense
of North American owner's manuals," said one Detroit-based auto
analyst. "They're much less likely to buy a vehicle when they can't figure
out how to make it work."
It's widely expected that Japan would resist any WTO demands to
abolish Japanese by claiming a cultural exemption to normal trade rules.
But a WTO official scoffed. "There's even less genuine cultural value to
a Japanese-language owner's manual than there is in the Canadian
edition of Reader's Digest."
China's trade ministry, meanwhile, expressed pleasure at the WTO
decision, suggesting that it enhances the likelihood that Beijing will soon
be admitted to the world trading club. "Sure, our country is still nominally
run by Communists," said one official. "But we drive on the right side of
the road. This clearly indicates our readiness to accept the discipline of
world market forces."
The implications of the WTO's ruling on traffic laws may extend to
other industries. An association representing U.S. beef growers is
already planning a trade challenge against the Japanese sushi industry.
"Japanese consumers are indoctrinated to eat raw fish from the time
they are toddlers," one beef lobbyist said. "No wonder they won't buy our
meat. That's completely unacceptable."
The beef challenge may be backed by powerful support from the
pharmaceutical industry, which has long complained of a lack of
Japanese demand for U.S.-made cholesterol-reduction drugs.
The latest WTO decision represents another expansion in the scope
and breadth of the trade body's dispute-settlement system. What was
initially intended as a means of arbitrating relatively narrow and arcane
questions of trade law has evolved into an authority with the mandate to
challenge any law, policy or practice found to inhibit the pre-eminent goal
of expanded world trade.
The worldwide economic and cultural harmonization thus being
encouraged by the dispute-settlement mechanism is a normal side-effect
of globalization, said a top U.S. trade official assigned to the WTO.
"Basically, it won't stop until foreigners think like Americans, act like
Americans and shop like Americans."
When not reporting on WTO decisions from Geneva, Jim Stanford is an
economist with the Canadian Auto Workers union.
