stratfor on WTO/Seattle

[Wojtek Sokolowski]

>Date: Thu, 16 Dec 1999 20:08:39 -0600 (EST)
>From: "alert at stratfor.com" <alert at stratfor.com>
>Subject: France/Japan
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>
>STRATFOR.COM's Global Intelligence Update - December 17, 1999
>
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>STRATFOR.COM Global Intelligence Update
>December 17, 1999
>
>
>After Seattle: The French and Japanese Strategies
>
>
>Summary:
>
>After the disastrous World Trade Organization (WTO) meeting in
>Seattle, France has renewed its determination to end U.S. dominance
>of the global trade environment. Believing that Washington
>monopolizes organizations like the WTO and the International
>Monetary Fund (IMF), the Chirac government is attempting to join
>forces with Japan. Ultimately, efforts to change the balance of
>power from within these organizations are likely to falter. France,
>Japan and others will eventually consider abandoning these
>institutions and creating their own.
>
>
>Analysis:
>
>Prime Minister Lionel Jospin met with Japanese counterpart Keizo
>Obuchi in Tokyo this week to discuss reforming the World Trade
>Organization (WTO). The two men issued a joint declaration stating
>the two nations' intent to cooperate in making the WTO "more open
>and more transparent" as well as a desire to see it "develop
>towards a multilateral system." At the meeting, Jospin implicitly
>blamed the United States for the debacle in Seattle. "It was not
>the fault of Japan, France or Europe," he said, according to Agence
>France-Presse.
>
>France and Japan share a common interest in undercutting U.S.
>control of global trade policy -- and international affairs at
>large. Now, Paris has seized upon this common ground to strengthen
>ties with Tokyo, in the hope of satisfying a mutual desire: a more
>balanced agenda in the WTO as well as the Bretton Woods
>institutions of the IMF and the World Bank.
>
>The unbridled nature of U.S. power has rankled France more than any
>other nation. Once a world power, French influence is overshadowed
>by Hollywood, McDonalds, the U.S. economy - and Washington's
>military muscle. Jospin, President Jacques Chirac and Foreign
>Minister Hubert Vedrine have in the last month repeatedly condemned
>U.S. "hyperpower" and stressed the importance of a multi-polar
>world.
>
>The Chirac government appears to believe that the WTO turns U.S.
>advocacy of free trade directly into policy -- at the expense of
>other countries' markets. French farmers are particularly
>threatened by U.S. competition. Small farms are the backbone French
>agriculture and have difficulty competing with the behemoth of U.S.
>agribusiness. Earlier this year, the United States deepened French
>antagonism by imposing sanctions on Roquefort cheese, Dijon mustard
>and goose liver pate, because the European Union refused to buy
>American hormone-treated beef.
>
>Jospin's meeting with Obuchi is only the latest effort to forge
>closer ties between Paris and Tokyo. In the first six months of
>1999, France poured more investment into Japan than any other
>country. In March, France's Renault car company bought a
>controlling stake in Nissan Motor Company.
>
>Japan has similar interests in balancing out the global economic
>system. Japan does not support U.S.-style free market capitalism.
>The country also shared France's disapproval of U.S. Treasury
>Secretary Lawrence Summer's proposal at the G-20 group meeting to
>transform the IMF into a short-term lending institution. The Obuchi
>government recently fielded its former finance minister as a
>candidate to replace outgoing IMF managing director Michel
>Camdessus and Tokyo has also led a campaign to create an
>alternative Asian Monetary Fund.
>
>But the effort to supplant U.S. dominance in organizations like the
>IMF and WTO will eventually run into an obstacle: the United States
>itself. The United States supplies more than 17 percent of IMF
>funds. In stark contrast, Japan and France combined provide less
>than 12 percent.
>
>Across the board, Washington's financial stake trumps other
>nations' interests. Efforts to change the dynamic of the World
>Trade Organization also face difficulties. The organization's
>mandate is "trade liberalization." As long as the United States
>remains the world's chief economic power, that mandate will
>continue serve its interests.
>
>Eventually, the inability to take control of these organizations
>may lead these countries to abandon them and establish institutions
>independent of the United States. The increasing discussion in Asia
>of a regional monetary fund is a good example. However, such an
>institution will be economically and politically weaker than the
>international organizations that exist today.
>
>For this reason, French strategy is keyed to reforming existing
>institutions from the inside. While in Tokyo, Jospin stressed that
>the central role of the IMF and World Bank should not be weakened
>"through the multiplication of forums." The strategies of the
>French and Japanese governments are divided. While Paris wants to
>work within the system, Tokyo sees a need for an immediate
>alternative: the Asian Monetary Fund.
>
>Ultimately, France will find that jostling with the United States
>within the framework of existing international institutions is
>fruitless. At that point, it will have to consider the option of
>working outside the system to build a new one.
>
>
>
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