----- Original Message ----- From: <alert at stratfor.com> To: <redalert at stratfor.com> Sent: Friday, December 17, 1999 7:38 AM 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.
>
>
>
> (c) 1999, Stratfor, Inc. http://www.stratfor.com/
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