LONDON -- The recent conclusion of the bilateral trade agreement between Japan and Mexico was heralded as opening the way to other bilateral trade agreements that would substitute for a successful round in World Trade Organization negotiations. This view is mistaken.
It is very much in Japan's national interest that a wide-ranging multilateral trade agreement be concluded, the sooner the better. With the Japanese economy increasingly meshed into the world economy, bilateral agreements will at best only help marginally. At worst, they could complicate the conclusion of wider trade agreements and lead to an escalation of trade discrimination.
The agreement with Mexico was of some significance. In the earlier agreement with Singapore, Japanese protectionism in agricultural products was largely irrelevant. However, under pressure from the Mexican agricultural lobby, Mexican authorities insisted on concessions from Japan over pork and orange juice before agreeing to tariff-free quotas for Japanese vehicles.