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Japan, US, EU agree to co-sponsor proposal to reform WTO, China in sight

Hiroshige Seko, Japanese minister of economy, trade and industry (Mainichi)

NEW YORK (Kyodo) -- Trade ministers from Japan, the United States and the European Union agreed Tuesday to co-sponsor a proposal to reform the World Trade Organization as part of an effort to prevent Chinese industrial subsidies from distorting the global market.

The proposed change concerns the notification system for domestic industrial subsidies and strengthening the activities of the regular committees of the WTO, according to a joint statement issued after a trilateral meeting in New York.

It marked the first time that the three parties have agreed to co-sponsor a proposal to reform the Geneva-based global trade watchdog, according to an official of Japan's Ministry of Economy, Trade and Industry.

The three parties plan to submit the proposal to the WTO as early as next month, the official told reporters after the meeting involving Japanese Economy, Trade and Industry Minister Hiroshige Seko, U.S. Trade Representative Robert Lighthizer and European Commissioner for Trade Cecilia Malmstrom.

"The ministers shared a common view on the need for the reform of the WTO, and, with respect to its monitoring and surveillance function, agreed as a first step to co-sponsor a transparency and notification proposal for consideration at the next meeting of the WTO Council on Trade in Goods" slated for November in Geneva, the statement said.

The meeting on sidelines of the United Nations General Assembly came as some WTO members such as China have failed to comply with the notification system under which WTO members are required to report to the 164-member body when they extend subsidies to domestic industry.

"The trilateral partners continue exploring how to increase the costs of transparency and notification failures and how to strengthen the ability to obtain information on subsidies," the statement said.

Speaking to reporters after the meeting, Seko underscored the significance of the U.S. involvement in international efforts to strengthen the multilateral trading system based on rules including those on subsidies.

"I believe such efforts will lead to deterring or averting a trade war or that kind of thing to be carried out between two countries," Seko said. "The United States actively participated in trilateral discussions on WTO reforms."

Taking aim at China's "unfair" trade practices, Seko and his U.S. and European counterparts criticized nonmarket-oriented policies and practices of "third countries" that lead to severe overcapacity, create unfair competitive conditions for their workers and businesses and undermine the proper functioning of international trade, according to the statement.

Sharing Washington's concern about Beijing's alleged intellectual property and technology theft, the ministers affirmed that no country should require or pressure technology transfer from foreign companies to domestic companies, including through licensing processes and the use of joint ventures.

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