Preface

• Jurisdiction: United States,Federal
• Citation: Vol. 17 No. 03
• Publication year: 1994

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 17, No. 3SPRING 1994

ARTICLES

Preface

Geoffrey R. Watson(fn*)

I. Introduction

This Symposium on trade in the Pacific Rim could hardly have been better timed. The Symposium took place just ten days before the U.S. Congress approved legislation implementing the North American Free Trade Agreement (NAFTA),(fn1) two weeks before the summit of the Asian-Pacific Economic Cooperation (APEC) group in Seattle, and a month before parties to the General Agreement on Tariffs and Trade (GATT)(fn2) reached agreement on the Uruguay Round of negotiations. Free trade has risen to the top of the American foreign policy agenda. Trade with the Pacific Rim in particular has received unprecedented attention from the Clinton Administration. Indeed, our Symposium caught the attention of President Clinton, who sent the participants a letter urging them to "remember the historical importance of expanding trade."(fn3)

II. The Symposium

The Symposium meeting itself was convened on Friday, November 5, 1993, at Union Station in downtown Seattle. The meeting was divided into four panels, two in the morning and two in the afternoon. The two morning panels considered trade questions in the multilateral context-mainly GATT and NAFTA-while the afternoon panels focused on bilateral trade issues.

Each panel featured a distinguished group of presenters. The first panel addressed the question of Chinese membership in the GATT. I introduced the topic by providing an overview of the GATT. Professor Donald Clarke of the University of Washington School of Law followed by outlining some conceptual difficulties with Chinese membership.

The second panel took up NAFTA. I moderated a lively discussion among four presenters: Phillip Jones, chairman of the Washington Coalition for NAFTA; Professor Robert Benson of Loyola Law School in Los Angeles; Hillary Kaplan, Assistant General Counsel for PACCAR in Bellevue, Washington; and Robby Stern, head of the Washington Labor Coalition Against NAFTA. Mr. Jones and Ms. Kaplan defended NAFTA; Professor Benson and Mr. Stern attacked it. This panel was followed by lunch, during which Don Bonker, former Chairman of the Subcommittee on International Trade of the House Foreign Affairs Committee, spoke on trade policy generally. He outlined the history of U.S. trade policy in this century, and he argued for a policy of free and fair trade.

The third panel, moderated by Professor Kellye Testy of the University of Puget Sound School of Law, considered questions relating to trade with Japan. This panel included presentations by Professor Dan Fenno Henderson of the University of Washington School of Law, Michael Kawachi of Mayer, Brown and Piatt in Tokyo, and David Walton of Perkins Coie in Seattle.

The fourth and final panel addressed questions arising out of trade with China, Hong Kong, and Taiwan. I served as moderator. The panelists were Dr. Robert Kapp, Chairman of the APEC conference; Jeffrey Kovar, Attorney-Adviser for East Asian and Pacific Affairs at the U.S. Department of State in Washington, D.C.; Randall Green, an aircraft contracts specialist at Boeing who also serves as Adjunct Professor of Law at the University of Puget Sound School of Law; and Heng-Pin Kiang of Perkins Coie in Seattle. Dr. Kapp described the agenda for the upcoming APEC conference in Seattle. Mr. Kovar and Professor Green discussed most-favored-nation (MFN) status for China. Mr. Kovar described the applicable legal framework that has been developed by the Clinton Administration; Professor Green argued for renewal of MFN status for China. Finally, Mr. Kiang described developments in bilateral trade with Taiwan and Hong Kong.

III. The Symposium Issue

This issue includes one article from each panel: Professor Clarke's article on whether China should become a member of the GATT, Professor Benson's article on NAFTA as "extremist ideology," Mr. Kawachi's article on securitization in Japan, and Professor Green's article on MFN status for China. In addition, the editors have included a spirited defense of NAFTA by Ms. Rebecca Reynolds Bannister. To set the stage, I offer a few comments on each article below.

A. GATT and China

GATT used to be one of international law's more obscure acronyms. That has changed over the past few years as the Uruguay Round of negotiations has raised the GATT to a political level in Europe and the debate on NAFTA has focused attention on the GATT here in the United States. But last December's agreement in the Uruguay Round means that the public will have to learn yet another acronym because the GATT is now being replaced with the World Trade Organization (WTO).(fn4)

Whatever the name, the GATT will remain the foundation for international trade law. Although originally signed by only a handful of Western states, it is now adhered to by over a hundred states from around the world. The Agreement stands for the principal of free trade and open markets; its avowed goal is the gradual reduction of trade barriers of all types. In particular, the GATT holds that trade should be nondiscriminatory- that each state party should accord to all other state parties the same treatment it gives the "most favored nation" with which it trades.(fn5) In addition, insofar as trade barriers continue to exist, the GATT evinces a preference for "transparent" trade barriers such as tariffs on imports-barriers that most clearly reveal how much additional cost is imposed on an importer.(fn6)

It is quite natural that China, with its rapidly expanding economy and its increasing volume of exports, should be interested in joining the GATT. It is equally natural, as Professor Donald Clarke explains in his article, that the GATT members are skeptical about admitting states whose economies are not entirely or primarily market oriented. A few states with nonmarket economies have been admitted, but only after extended negotiation, and in any event these were states with relatively small economies.(fn7) As Professor Clarke argues, the GATT is premised on the notion that the economies of member states will react in predictable ways to reductions in tariffs and other stimuli. If nonmarket economies do not respond to such stimuli, they may enjoy nonreciprocal advantages under the GATT. If, for example, China reduces its tariffs in accordance with the GATT (in exchange for similar treatment for Chinese exports abroad), Chinese demand may not increase as much as might be the case for a market economy because domestic Chinese demand may not turn entirely on market factors like price. In this event, China would gain the benefits of GATT membership-reduced tariffs by the GATT members on Chinese exports abroad-without accepting the increased imports that one might normally expect resulting from lower domestic tariffs.(fn8) For a fuller analysis of the economic implications of Chinese membership in the GATT, I refer the reader to Professor Clarke's thoughtful and incisive article.

Of course the question of GATT membership for China also has political implications. The GATT is no longer a small club of Western states; more than one hundred states from around the world now take part in the Agreement. The United States itself trades with virtually all of these states, including most of the states of the Pacific Rim, as well as a number of non-GATT states such as China. Quite apart from its economic function, the GATT serves a political function; membership implies some degree of acceptance by the international community.

Indeed, in some ways the debate about Chinese membership in the GATT parallels the more overtly political...