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     Sep 21, 2005
China and the legacy of the Plaza Accord
By Hisane Masaki

TOKYO - When the Plaza Accord was reached on September 22, 1985, Japan was dead in the water amid a raging tide of trade protectionism in the United States, its biggest export market across the Pacific Ocean. Twenty years later, China is in the same boat.

As Japan did in the mid-1980s, China is now facing a plethora of sanctions bills in the US Congress, amid a growing chorus of cries for help from American industries battered by a flood of Chinese imports. China is also struggling to weather ever-intensifying pressure from the US administration for export restrictions and a revaluation of what is widely deemed to be its overly undervalued currency to correct a gargantuan trade imbalance in its favor.

The long list of striking similarities between Japan of the mid-1980s and today's China does not end here. There are alarm bells blaring against China's recent aggressive investment in the US

and a growing perception among the American people of China as a main economic adversary - and even a new threat to their country.

From the end of the 1970s to the early 1990s, some people predicted Japan would replace the US as the biggest economy some time in the 21st century, with Ezra Vogel's 1979 book titled Japan as Number One: Lessons for America becoming a best seller. When the Plaza Accord was clinched in 1985 (with G-5 nations France, West Germany, Japan, the US and the UK agreeing to devalue the US dollar in relation to the Japanese yen and German Deutsche Mark), Japan posted a trade surplus of more than $50 billion with the US and became the world's largest creditor nation, while the US slipped into the world's biggest debtor nation.

Now China is rapidly ascending as a new economic power. It is already the world's seventh largest economy in terms of gross domestic product, or GDP, and also the third-biggest trading nation after Germany and the US. China's foreign reserves are now nearly $700 billion, the second-largest amount after Japan's $847 billion. China also superseded the US as the world's biggest recipient of foreign direct investment in 2004, accepting more than $60 billion worth of such investment. The world's most populous nation of some 1.3 billion people is projected by many to even surpass the US in GDP and grab the status of number one economy by about 2050, at the latest.

The G-5 governments, the acknowledged Group of Five economic powers, shared grave concerns about protectionism engulfing the US Congress at the time. The administration of president Ronald Reagan, a self-proclaimed free trader, hoped to thwart highly protectionist bills there with the currency (Plaza) accord.

Looking back on the currency arrangement, Tomomitsu Oba, a former Japanese deputy finance minister for international affairs directly involved in the accord, said in a recent interview with the business daily Nihon Keizai Shimbun, "As things turned out, [G-5 nations] succeeded in heading off protectionism [in the US]."

Two decades later, with the global imbalances expanding amid the resurging twin deficits in the US budget and current account, some people even advocate a second Plaza Accord involving China and some other Asian currencies, although many experts dismiss the idea as unrealistic, or at least quite difficult practically in the foreseeable future.

US President George W Bush and Chinese President Hu Jintao met at a New York hotel on September 13 on the eve of a UN summit they attended. Hu made an unusually bold commitment to take "effective measures" to increase China's imports from the US to ''gradually'' reduce its trade surplus with the US. Bush urged China to move further toward a "flexible market-oriented" currency exchange rate, while welcoming Beijing's reform in its exchange regime in July to a more flexible system as a "good first move", a senior US official told reporters after the meeting.

The yuan, along with stubbornly high oil prices, will again top the agenda for the meeting of finance chiefs and central bank governors from the Group of Seven (G-7) major economies in Washington on September 23, as it did at the previous G-7 gatherings in the past couple of years.

How have Japan-US economic relations changed since the 1985 Plaza Accord? Will economic relations between the US and China follow the same path over the next two decades as those between the US and Japan did in the past two decades? And how will Japan deal with the rising economic power of its Asian neighbor?

After the Plaza Accord
The G-5 finance ministers hunkered down at the Plaza Hotel in New York on September 22 and decided to intervene cooperatively in the foreign exchange markets to guide the excessively high value of the US dollar lower as a means of enhancing the US's export competitiveness and trim its enormous trade deficits. As a result, the Japanese yen's value vis-a-vis the dollar doubled in only about two years, from 240 to 120 a dollar.

The sharply higher yen prompted Japanese manufacturers to rush to shift production abroad, especially to Southeast Asia, to take advantage of cheaper labor there. Japanese automakers, which were particularly on the hot seat at the time amid raging trade protectionism in the US, also accelerated production in that country, not only to weather the stronger yen but to ease trade friction. In the early 1990s, the number of vehicles they assembled in the US exceeded that of their US-bound exports.

To help cushion the impact of the stronger yen on its economy in the wake of the Plaza Accord, Japan kept its monetary policy loose to stimulate domestic demand, but did so longer than necessary, resulting in the "bubble economy" of the late 1980s characterized by inflated prices for assets such as stocks and land.

Japanese exports to the US did not decline despite the Plaza Accord, however. And trade friction lingered and "revisionism" gained strength in the US, prompting the country to take a new tack on bilateral trade issues.

After years of putting pressure on Japan to exert export restraints, the US administrations turned its policy focus to prying open what they viewed as the heavily protected and closed Japanese markets to foreign competition, to forcing Japan to overhaul its macroeconomic policy and economic structure, including savings and investment balance and exclusionary business practices, and even to making Japan set numerical targets for imports of American goods.

Specifically, the administration of Republican Reagan conducted market-oriented, sector-selective, or MOSS, talks with Japan. The administration of George H W Bush senior, also a Republican, launched the Structural Impediments Initiative, or SII, talks with Japan.

Democratic president Bill Clinton, who took office on a campaign pledge to make a recovery of the US economic power as its top priority in the post-Cold War era, stepped up his offensive on Japan over trade issues in the framework talks. His summit with then Japanese premier Morihiro Hosokawa in early 1994 collapsed after Tokyo rejected Washington's demand for numerical targets to measure Japanese progress in opening its markets. Hosokawa boasted at the time, "Japan-US relations have become relations between grown-ups."

The tenacious US demand - and Japan's rejection - for Tokyo to set numerical targets for imports of American auto parts also brought the two countries to the brink of an unprecedented tit-for-tat trade war the following year. The US decided to slap a prohibitively high tariff of 100% on imported Japanese luxury vehicles under Section 301 of the Trade Act of 1974, and Japan filed a complaint with the World Trade Organization (WTO) against the US measure.

WTO is the Geneva-based watchdog on global commerce that succeeded the General Agreement on Tariffs and Trade (GATT) in January 1995. It was the first time that Japan had taken a trade dispute with the US to either the GATT or the WTO. Unilateral trade measures such as the ones under Section 301 were declared illegal by the WTO later.

In the mid-1990s, Japan began to clearly say no to what it deemed unjust US demands that contravened international trade rules, and also began to refer the US to the WTO over WTO-incompatible laws and trade measures. This marked a significant departure from the post-war Japanese trade policy.

Previously, Japan had made one concession after another in the face of the threat of US sanctions. Although the Ministry of International Trade and Industry (MITI) - now renamed the Ministry of Economy, Trade and Industry (METI) - had often insisted on referring the US to the WTO, the demands were rebutted by the Foreign Ministry, which was concerned about a possible erosion of the overall Japan-US relationship, including political and security ones.

Japan and the US saw tensions in bilateral trade relations rise to their highest point between the 1980s and the mid-1990s. But now fierce Japan-US trade friction is a thing of the past. So, what happened in the past decade or so?

Japan's annual trade surplus with the US remains inexorably huge, at about $75 billion in 2004. And some relatively minor individual issues pop up from time to time, like the current fracas over Japan's imports of American beef, which have been suspended since the first case of mad cow disease in the US was discovered in December 2003.

But Japan is no longer a main target on - if not completely off - the US radar screen. The US's annual trade deficit with Japan is now eclipsed by that with China, which totaled a whopping $160 billion, or about one-fourth of the $610 billion overall US trade deficit, in 2004. American shops are full of Chinese clothes, shoes and toys. The trade gap is expected to reach $200 billion this year. The percentage of a deficit with Japan in the overall US trade deficit sharply plummeted to about 12% in 2004 from 65% in 1991.

Furthermore, unlike in the 1980s and early 1990s, Japan is no longer perceived by the US as a main threat. Japan is still the world's second-largest economy, after the US. But after the 1990 burst of the bubble economy, Japan had been mired in a prolonged economic slump. Its economic power and presence on the internal stage has significantly declined. "Japan bashing" by the US has been replaced by "Japan passing" and then by "Japan nothing". In recent years, the too weak Japanese economy has been seen by the US even as a "Japan problem".

When the Cold War was declared over at the Malta summit between US president Bush senior and Soviet president Mikhail Gorbachev in December 1989, the American people's perception of Japan as the biggest threat to their country grew. This perception was further reinforced by the demise in December 1991 of the Soviet Union.

China's military suppression of the pro-democracy demonstrators at Beijing's Tiananmen Square in June, 1989 sparked an international outcry. The Group of Seven major industrialized countries imposed sanctions on China. But only a few months after the Tiananmen incident, Bush senior sent his national security advisor Brent Scowcroft to Beijing secretly on an apparent fence-mending mission. The visit was interpreted by some experts as reflecting US concerns about Japan as the number one threat in the post-Cold War era.

After moving production facilities to the US to cope with the stronger yen and trade friction, Japanese manufacturers now employ many people locally. Toyota Motor Corp, for example, boasts more than 200,000 people on its payrolls in the US, including workers employed by parts suppliers. The increased number of workers locally hired by Japanese companies has also contributed to easing of trade tensions between the two countries.

When they met for the first time at Camp David in June 2001, President George W Bush and Japanese Prime Minister Junichiro Koizumi inaugurated the "US-Japan Economic Partnership for Growth" talks to replace the framework talks held during the Clinton era. Various levels of contacts, not only between government officials but also between business leaders, have been held under the new framework for talks.

Reflecting the sea-change in the bilateral economic landscape, however, the new economic talks are no longer a highly publicized place for engaging in a war of words. They are a place for calm discussions on cooperation in resolving various bilateral and international issues through constructive dialogue.

China in the US crosshairs
After World War II, the first trade friction between Japan and the US erupted in the mid-1950s over a flood of "one-dollar blouses" shipped from Japan into the US market. With the rapid ascendance of Japan's industrial power, industries at the center of trade friction with the US shifted from labor-intensive ones to more high-technology ones - from textiles in the 1950s and 1960s to steel and color televisions in the 1970s to autos and semiconductors in the 1980s and 1990s.

In terms of economic development, China is now said by many experts to be where Japan was in the 1960s. Japan enjoyed a high-flying economy and saw national income more than double during that decade. The summer Olympics was held in Tokyo in 1964, providing the country with a good opportunity to showcase its miraculous recovery from ashes of the war and rapid growth. It may not be a mere coincidence that Beijing will host the summer Olympics in 2008.

Japan joined the GATT in 1955 with strong US backing. But 14 countries, including Britain and France, still had a bitter memory of seeing their domestic industries hurt by a flood of Japanese imports before World War II. They invoked Article 35 of the GATT rules and retained discriminatory trade measures against Japan. Getting those discriminatory trade measures lifted became one of Japan's biggest foreign-policy tasks throughout the 1960s.

When China joined the WTO, the GATT's successor, at the end of 2001, it also accepted tougher terms than other new entrants, such as the right of other WTO members to single out China and impose "special safeguard" emergency import restrictions. Unlike ordinary "safeguard" import restrictions, which must be applied to all WTO members, "special safeguard" restrictions can be applied only to China. The "special safeguard" for China will remain in place for 12 years after its WTO entry, until the end of 2013.

The textile trade is now the main source of trade friction between China and the US, as it was between Japan and the US in the 1960s. In China's textile trade row with the US, Washington is in negotiations with Beijing on restricting some Chinese exports following a flood of Chinese imports into the US after the global quotas expired in January this year. China has already reached an export-restraint agreement with the 25-nation European Union.

The US has also accused China of failing to fully comply with its commitments made when it joined the WTO, including the protection of intellectual property rights. Textile is probably the first in a series of trade disputes that are expected to break out between the two countries for many years to come, as it was between Japan and the US.

The battle between the US and China over trade has spread to the currency front. There are strong complaints in the US that China has kept its currency - the yuan - artificially low to fuel its aggressive export drive and rack up a huge surplus in bilateral trade at the expense of American jobs. Some members of the US Congress claim that the yuan is undervalued by at least 30% to 40%.

US Federal Reserve chairman Alan Greenspan and many other economists argue that exchange rate changes alone would not lead to a tangible shrinkage in the trade gap between the US and China because import-thirsty American people would buy more products imported from other low-cost trading partners.

Furthermore, more than half of exports from China, a country now often referred to as the "world's production center", are actually made by foreign-funded factories. According to one estimate, of the overall US imports from China, as much as 25% are products made locally by US subsidiaries or affiliates. But economics is different from politics. International pressure, particularly from the US, on China shows no sign of abating.

In a decision widely seen as a concession to the US ahead of Hu's trip there this month, China scrapped its dollar-pegged exchange system on July 21 and adopted a managed floating system linked to a basket of foreign currencies, resulting in a 2.1% revaluation of the yuan against the US dollar. Although the US administration welcomed the Chinese decision as a significant first step in the right direction, it wants China to let the yuan rise much further, by at least more than 10%.

After a recent two-day meeting of finance ministers from the member economies of the Asia-Pacific Economic Cooperation forum on the South Korean resort island of Jeju, Chinese Finance Minister Jin Renqing said that a stable yuan would be in the interests of China's economy, as well as of Asia's economy and the world economy, and reiterated China's position that it would carry out yuan reform in a gradual and controllable manner.

Trade protectionism is flaring up again in the US Congress. In the 1980s, a litany of sanctions bills targeting Japan were introduced to Capitol Hill, including the so-called Gephardt clause sponsored by Democrat Richard Gephardt, which called for a 20% surcharge on Japanese products imported into the US. The so-called Gephardt clause led to the enactment in 1988 of "Super 301" clause, the much-toughened version of 301 Section of the Trade Act of 1974.

In recent months, a spate of similar bills targeting China has been submitted. Among these, anti-China bills are the ones introduced in the spring by Senator Charles E Schumer and other lawmakers, which calls for a 27.5% surcharge on all imported Chinese goods unless China revalues its currency drastically. This bill prompted US Treasury Secretary John Snow to declare that his department would judge within six months - by October - if China was a country that was engaged in manipulation of exchange rates to take an advantage in trade with the US. If judged as such, China could face punishment.

There is a similarity between Japan of the 1980s and today's China on the investment front as well. During the Japanese bubble economy of the late 1980s, money-glut Japanese companies, backed by the stronger yen, went on a buying spree in the US, making many high-profile acquisitions, including one of the Rockefeller Center by Mitsubishi Estate Co. This aggressive Japanese buying of American assets stirred a repugnant reaction from many American people.

Recently, state-run China National Offshore Oil Co Ltd's (CNOOC's) bid for Unocal met opposition from many in the US Congress, who cited security concerns. CNOOC eventually abandoned its politically charged $18.5 billion bid for Unocal, paving the way for the acquisition of the ninth-largest US oil producer by another American oil producer, ChevronTexaco. In December last year, China's Renovo Group Ltd purchased IBM Corp's personal-computer operation. Some Congressional members also voiced security concerns about that deal.

To be sure, China is now in a situation similar to the one in which Japan was in the mid-1980s. But there are a lot of differences as well.

First of all, Japan and the US have been staunch allies based on the bilateral security treaty since the end of World War II. They share common values. Reagan, who was in office in most of the 1980s, is widely credited with bringing a Cold War victory to the US-led Western camp. Reagan and then Japanese prime minister Yasuhiro Nakasone forged close personal ties called the "Ron-Yasu relationship". Nakasone significantly beefed up Japan's security cooperation with the US.

Meanwhile, the US and Communist Party-ruled China often clash over human rights, democracy and Taiwan, as well as over trade. Furthermore, apparently keeping the US in mind, Chinese leaders often express objections to having the world dominated by a single superpower and stress the need to promote the multipolarization of the world.

When the administration of Bush was inaugurated in early 2001, it referred to China as a "strategic competitor" instead of a "strategic partner", as the Clinton administration did. In the wake of the September 11 terrorist attacks in the US later that year, the Bush administration began to soften its rhetoric and call bilateral ties a "relationship of constructive cooperation" in hopes of extracting cooperation from Beijing in its global fight against terrorism and also in resolving the standoff over the nuclear programs of North Korea, for which China is one of a few remaining allies.

But the US-China relationship of constructive cooperation began to show its seams after the US launched a war in Iraq in the spring of 2003 to oust Saddam Hussein. The Iraq war also caused deep schisms between the US and some of its Cold War allies, like France and Germany, as well as Russia.

The Pentagon released its annual report on China's military power in July. It said, among other things, that annual Chinese military spending is estimated to be up to $90 billion, three times the amount publicized by Beijing and the third-largest such spending after that of the US and Russia. It warned that the sharply rising Chinese military spending, coupled with the ongoing modernization of the military, could pose a clear threat to Asian neighbors and American military forces deployed in the region in the long term.

Meanwhile, China is increasingly alarmed by the ongoing global "transformation" of the US military and also by the realignment of American forces stationed in Japan now under negotiation between Washington and Tokyo as part of a US review of its military posture worldwide.

The Bush administration insists that the transformation of the US military is aimed at ensuring stability in the "arc of instability" stretching from the Middle East to North Asia via South Asia and Southeast Asia. There are suspicions in China, however, that although the real motive for the transformation might be what some people call the "soft containment" of China.

The ongoing move toward a stronger security alliance between the US and Japan has also highly alarmed China, especially since the two countries agreed in February this year to make a peaceful resolution to tensions on the Taiwan Strait one of their common strategic goals to be pursued under the new bilateral security arrangement. Leaders in Beijing still regard Taiwan as a renegade province that must be reunified with the mainland, by force if necessary.

In other recent developments that raised the eyebrows of many in the US, China issued a joint statement with Russia and four Central Asian countries at a summit of the Shanghai Cooperation Organization in July calling for an early withdrawal of US forces from Central Asia. In August, China also conducted its first, high-profile joint military exercise with Russia. Both the statement and military exercise were widely seen as countering the US domination of world affairs.

In addition, China's recent building-up of ties with such anti-US, oil-rich countries like Iran and Venezuela has unnerved the US. China has also strengthened ties with Myanmar in recent years, in defiance of US and European sanctions against the military-ruled Southeast Asian country.

To be sure, all these things may sound purely political. But politics and economics cannot be simply separated in the real world.

Economically, a quick look at the trade data of Japan and China shows differences in the two countries' trade structures. Although both run up huge trade surpluses with the US, China's overall trade surplus with the rest of the world has been hovering between $20 billion and $30 billion annually in recent years, compared with Japan's well over $100 billion.

China has become a major exporter of machinery and electric products as well as such low-tech goods as textiles and footwear, and has racked up huge trade surpluses with the US and Europe. But at the same time, China has run up a big trade deficit with Asian neighbors. As many economists note, China has so far been largely an assembly base of multilateral companies, especially from Asian neighbors, for products to be exported to the US and Europe. In fact, more than half of Chinese exports are made locally at foreign-funded factories. China imports high-tech parts and components, especially from Japan and other Asian neighbors, for assembly of its products, and little value is added to products in local production.

Trade friction between the US and China is still basically over low-tech products such as textiles, although the more progress China makes in catching up with the US, as widely expected, the more high-tech products will be the focus of friction. Unlike once-mighty Japanese banks, which swept through global capital markets, including those in the US, in the 1980s, Chinese banks are almost invisible abroad.

In the late 1980s, the administration of Bush senior pushed for reform of Japan's economic structure through the SII talks. The US may feel tempted to take a similar approach to its trade gap with China in the future. But the US will remember quickly that despite its WTO entry, China is still a "socialist market economy" under the control of the Communist Party, and quite different from Japan.

China: Threat or partner for Japan?
These days, Sino-Japanese relations are often said to be "cold in politics and hot in economics". Bilateral political ties remain strained by a host of issues, ranging from Koizumi's repeated visits to Yasukuni Shrine, a reignited territorial dispute and other issues stemming from the past Japanese aggression on mainland China. In stark contrast with the stalled political ties, however, economic ties are on the fast track, with two-way trade booming and Japanese China-bound investment charging ahead.

For many years after World War II, Japan was so heavily dependent on the US for trade that many people said if the US economy caught cold, the Japanese economy would suffer pneumonia. But the Japanese external trade landscape is changing.

China became Japan's biggest trading partner for the first time in 2004, replacing the US. Sino-Japanese trade totaled about $213 billion, compared with the about $196 billion trade between Japan and the US.

China accounted for 20.1% of Japan's overall trade in 2004. The percentage of China trade in the overall Japanese trade began to rise sharply after China's WTO admission, as Japanese manufacturers stepped up the transfer of production facilities to China, resulting in increased Japanese exports of key parts and components for local assembly and more Japanese re-imports of locally made goods. The percentage of US trade in the overall Japanese trade declined below the 20% level for the first time in 2004, standing at 18.6%.

Japan's investment in China began to rise sharply around China's 2001 WTO entry, totaling 355 billion yen - or roughly $3 billion - in fiscal 2003, which ended in March 2004. The fiscal 2003 figure represented 8.7% of overall Japanese foreign direct investment made that year, versus a paltry 1.1% share for fiscal 1999.

But the devil is in the details. Sino-Japanese trade rose 25.7% in 2004, but the pace of increase was much slower than China's overall trade with the rest of the world, which grew a more robust 35.7%. This is a trend that has been seen since the late 1990s. As a result, Japan slipped from China's biggest trading partner to its third, after the 25-nation European Union and the US.

China is becoming an increasingly important trading partner for Japan, but Japan is gradually becoming a less important trading partner for China. This asymmetrical phenomenon reflects the booming Chinese economy and slumping Japanese economy. Some people say that Sino-Japanese economic relations may look "hot" for many Japanese but only "lukewarm" for many Chinese. The current China fever among many Japanese on the economic front may end up in an "unrequited, one-sided love", they say.

Expanding trade sows the seeds of friction. Japan and China were engaged in a tit-for-tat trade war in 2001. Japan imposed import curbs on three Chinese farm products, including stone leeks, amid strong protectionist pressure from domestic growers and their backing politicians. China wasted no time to retaliate by slapping 100% import duties on some Japanese industrial goods, including automobiles and mobile phones.

When he attended the Boao Forum for Asia in China in April 2002, Koizumi said he thought an economically stronger China created opportunities for the Japanese economy, rather than posed a threat to it. He may have been right. Booming exports to China, as well as to the US, have driven an economic recovery in Japan in recent years. The perception of China as an economic threat among many Japanese people has been replaced by that as a blessing.

Some economists predict, however, that as Sino-Japanese trade continues to expand at a torrential pace, the focus of trade friction between Japan and trading partners will gradually shift away from Japan and the US to Japan and China, especially the political sensitive agriculture and high-tech sectors in the long run.

The ever-growing importance of China for Japan in trade and declining importance of Japan for China in trade could put China at an advantage in future negotiations on trade issues. In addition, Japan will lose its most powerful diplomatic card in ties with China soon.

Japan has already decided to stop offering fresh low-interest yen loans to China before the 2008 Beijing Olympics. The yen loans account for the bulk of Japanese official development assistance, or ODA, to China. Japanese ODA money began to flow into China in the late 1970s, when China embarked on a policy of reform and openness at the behest of the late paramount leader Deng Xiaoping. Well over 3 trillion yen in Japanese ODA has since been provided to China. As a result of a policy review by the Japanese government struggling with the worst level of public deficits among major economies, the amount of China-bound yen loans had already been significantly dented in recent years. The loan amount dropped to 96 billion yen in fiscal 2003, more than half the peak of 214 billion yen in fiscal 2000.

When the WTO succeeded the GATT in January 1995, the global trade referee's dispute-settlement function was significantly strengthened. In what some experts dub "aggressive legalism", Japan has filed complaints with the WTO over one trade dispute after another with the US in recent years.

Earlier this month, Japan went so far as to levy WTO-sanctioned retaliatory import tariffs on some American goods after the US failed to comply with a WTO ruling ordering the US to abolish the so-called Byrd Amendment. It was the first time that Japan had actually imposed trade sanctions against the US.

Japan's recent trade sanctions against the US have not caused any tensions in bilateral relations. But that will not be the case for Sino-Japanese relations, which have long been uneasy for historical and political reasons and are still far from mature, unlike Japan-US relations. It will be difficult for Japan to pursue WTO-first, aggressive legalism in trade disputes with China in the foreseeable future.

Japan and China inaugurated the Economic Partnership talks in 2002, a comprehensive forum for dialogue on promoting cooperation in a wide range of areas attended by deputy ministerial-level officials. The biggest purpose of the forum is to nip in the bud potential trade and other frictions before they are politicized too much, keeping in mind the 2001 tit-for-tat trade war as a lesson.

A senior Japanese government official who pushed for the inauguration of the dialogue forum said at the time, "Now that China is admitted to the WTO, Japan will be able to try to resolve any future bilateral trade disputes with China under the WTO's dispute-settlement procedures. But that will be the last resort."

Hisane Masaki is a Tokyo-based journalist, commentator and scholar on international politics and economy. Masaki's e-mail address is yiu45535@nifty.com

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Cool wind from the West (Sep 7, '05)



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