<nettime> France/Japan

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STRATFOR.COM's Global Intelligence Update - December 17, 1999


By the Internet's Most Intelligent Source
of International News &	Analysis
http://www.stratfor.com/

<....>

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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