Interview with Dr. Fukunari Kimura, Professor, Keio University, on the issue of Japan’s approaches to addressing changes in global society
Are you aware of the global framework called “T20”? It sounds similar to the G20 (group of twenty major countries and regions), but not exactly. The T20, an abbreviation of “Think20,” is one of the subgroups that contributes to the G20 process and is composed of members of leading think tanks from around the world. The T20 consists of 10 task forces categorized by policy issue and the members hold repeated discussions and write policy papers on these issues. The Ministry of Economy, Trade and Industry (METI) held an interview with Dr. Fukunari Kimura, Professor of Keio University as well as the lead co-chair of the T20 Task Force on Trade, Investment, and Globalization. In this interview, Dr. Kimura shared the visions for the future directions of the discussions on reform of the World Trade Organization (WTO) and data governance, which are two of the major issues on which the G20 meetings in June 2019 will focus.
The task force members share a strong sense of crisis
METI: Your T20 task force has compiled the results of its repeated discussions on policy papers that include recommendations prior to the convening of the G20 meetings. What are the characteristics of the recommendations?
Kimura: Currently, the global trading systems cannot fully address new challenges, such as the rise of the protectionism and digital trade. Our task force held repeated discussions on [i] reform of WTO systems that will result in its revitalization towards negotiation opportunities and the resurgence and enhancement of its dispute settlement functions and [ii] ideal approaches to well-balanced international rules for promoting the free flow of data.
As a starting point for the recommendations, we share a strong sense of crisis in the ongoing weakening of the foundations of the WTO’s multilateral free trading system, which is a framework that acts as the basis for the world trade order, and that has contributed to suppressing protectionism and advancing global economic development since its inception. Based on this awareness, we have proposed recommendations for WTO reform in order to restore its functionality.
METI: The T20 members include some representatives from the United States. Do all members share the same recognition?
Kimura: Yes. U.S. representatives in the T20 are not spokespersons of the White House. The significance of the existence of think tanks lies in the fact that their opinions are free of political influence and that opinions are based on empirical evidence.
METI: What kind of recommendations do you present on the issue of restoring the negotiation function of the WTO?
Kimura: We recommend an approach that will make negotiations more flexible. In the early days after its inauguration, the WTO adopted an approach to reaching agreements on all negotiations by what is known as the single undertaking approach, whereby all members must agree on all items in order to proceed. Following this, it shifted to a new policy that allows for dividing agreements into fewer subjects for which reaching agreement is quicker and more feasible. As a positive outcome of this policy, the WTO adopted the Trade Facilitation Agreement (TFA), whereas for the remaining negotiation subjects, member countries have yet to reach any agreements at the multilateral level. Considering this situation, there is a possibility of various options for negotiations, such as proactive advancement of negotiations by multiple, like-minded member countries, made possible by limiting the fields subject to the negotiations we call this style “plurilateral negotiations” or even advancement of multilateral negotiations where different time-bound goals are set for respective subjects.
The WTO should maintain its Appellate Body.
METI: To shift focus, what is your assessment of the WTO Appellate Body? The United States claims that the Appellate Body (the final arbiters in the dispute settlement mechanism of the WTO) has deviated from its scope of authority and procedures that member countries agreed to under the WTO Agreement, and refused to designate replacement members for the vacant seats of the Appellate Body. As a result, the Appellate Body is set to become dysfunctional by the end of 2019.
Kimura: Since the inauguration of the Trump administration, some cases involving unilateral protectionist measures have been seen in the United States. Keeping in mind that these cases may still be appealed in the future, I cannot determine if the United States actually intends to maintain the Appellate Body or not. On the other hand, the United States is the country that takes advantage of the dispute settlement functions of the WTO more often than any other member. T20 researchers do not always agree on specific measures for the WTO reform, such as approaches to choosing reform measures or the speed necessary for each reform. However, they strongly agree on the necessity of the continuation of the Appellate Body.
METI: The G20 Leaders’ Declaration issued at the G20 Buenos Aires summit meeting in 2018 indicated the member countries’ agreement to support the reforms necessary for improving the various WTO functions. To what degree do you expect that the G20 summit meeting in June this year will deal with this issue?
Kimura: The G20 summit meeting is a challenging meeting, in which not only developed countries but also emerging and developing countries participate. If participants hold constructive deliberations as efforts for improving the effectiveness of the various functions of the WTO as foundations of the rule-based international economic order, and if the significance of such deliberations is included [in the declaration] in some form, whether or not the expressions are the same as those in the previous meeting, we could say that the summit meeting has achieved a certain level of success.
Japan should encourage member countries to choose the issue of free flow of data as a starting point for discussions.
METI: What form do you expect Japan’s leadership to take in efforts to advance rulemaking for digital data? Japan has officially launched the concept “Data Free Flow with Trust (DFFT)” which advocates the free and fair distribution of data among trusted partners, with the aim of provoking fruitful discussion.
Kimura: First of all, whether or not the G20 member countries will choose the issue of free flow of data as a starting point for their discussions is considered a key point for Japan. Member countries will focus on the term “trust” and start discussions on the definition of the term as a matter of course. Personally, I am paying attention to what logic [Japan] will use in explaining the concept in response to this reaction. Meanwhile, if such a starting point is decided, measures for promoting the free flow of data and related measures for mitigating social and economic concerns will automatically become clear. As data represents nothing but national strategies, a variety of countries have been advancing their own approaches to data from a variety of standpoints, such as fostering domestic industries and protection of personal information, an idea positioned as a fundamental human right. Accordingly, whether or not the members can keep sight of their common goal to maintain momentum while proceeding with constructive discussions is a matter of importance.
Meanwhile, a logical system is necessary for the assessment of policies that bolster the free flow of data. Some emerging countries are facing technical challenges in following the strict regulations that they themselves have established. I think that accumulation of knowledge on such challenges is one of the roles that the G20 member countries should play.