Japan External Trade Organization (JETRO)
Below are some points for further study on the subject of how Japan can respond to these issues and contribute to stable global economic growth.
(1) In order for the countries of East Asia to revive their trade and economies, their main trade partners are expected to increase imports and fill the function of "absorbers." Japan's imports from East Asia are falling, but this has been due to the recession in Japan, and even if import prices drop, Japan*s imports from East Asia are unlikely to increase. Given that the Japanese economy is structured in such a way that imports from East Asia increase if the economy itself expands, the recovery of the Japanese economy will be vital to the stabilization of the economies of East Asia.
(2) To prevent a recurrence of the so-called "21st century type crisis" faced by the countries of East Asia, new rules on the financial system and an accurate understanding of large-scale shifts in short-term private capital are necessary. Also, in order to strengthen the region's industrial base, further assistance is needed to create more supporting industries. Countries with strong ties to the region, including Japan, must also consider taking on an active role in the creation of an international system of cooperation.
(3) Cases of renewed protectionist measures have appeared since the currency crisis, such as Malaysia's raise in tariffs on construction machinery and Thailand's raise in tariffs on iron and steel imports (Table 22). Since the countries of Asia have enjoyed the benefits of free international trade and investment and achieved economic growth, and committed themselves to promoting liberalization externally, they should restrain themselves from reversing the trend towards liberalization. Importers such as developed countries must also refrain from restricting imports by, for example, putting anti-dumping measures in place to counter the fall in price of East Asian imports.
(4) The advent of the euro will help diffuse concentration on the U.S. dollar and contribute to the stabilization of the world currency market. Encouraging further internationalization of the yen and making its use more convenient would also help to stabilize individual currencies. If the yen and euro become more international, East Asia's overemphasis on the U.S. dollar will ease and the stability of regional currencies should also be improved.
(5) In order to maintain momentum in the move towards global liberalization, it is important that the WTO's next round, scheduled to begin in 2000, should be successful. It is expected that Japan would play an active part in the WTO talks and make a positive contribution to the establishment of new rules. For the WTO to become a truly global trade institution, it is necessary for major traders such as China, Taiwan and Russia to become members.