Hostname: page-component-78c5997874-8bhkd Total loading time: 0 Render date: 2024-11-11T14:44:03.785Z Has data issue: false hasContentIssue false
  • English
  • Français

Bilateralism, Multilateralism, or Regionalism? Japan's Trade Forum Choices

Published online by Cambridge University Press:  24 March 2016

Saadia M. Pekkanen
Get access Rights & Permissions [Opens in a new window]

Abstract

The Japanese government today is actively and strategically choosing among various institutional forums to deal with its trade partners, namely bilateral venues, multilateral settings, and even preferential regional arrangements. This ongoing high-profile institutional selection is somewhat unprecedented for Japan, and demands a review of the historical and analytical reasons that drive decisionmakers to select one forum over another. Overall, the Japanese case suggests that the aggregate trade forum choices are influenced both by the desire to institutionalize mechanisms for stabilizing a range of expectations and by the necessity of guaranteeing market access and protection of investment in the fastest time possible.

Keywords

Trade policybilateralismmultilateralismregionalismpreferentialismGeneral Agreement on Tariffs and Trade (GATT)World Trade Organization (WTO)free trade agreement (FTA)forum choices/forum shoppinginternational institutions
Type
Articles
Information
Journal of East Asian Studies , Volume 5 , Issue 1 , April 2005 , pp. 77 - 103
Copyright
Copyright © East Asia Institute 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Notes

I wish to thank numerous officials in the Ministry of Economy Trade and Industry and the Ministry of Foreign Affairs, especially Junichi Ihara, Shinichi Kitajima, Setsuo Ohmori, Tadaatsu Mouri, Naoko Munakata, Kuni Sato, Yuichi Suzuki, Tanaka Shigehiro, and Masakazu Toyoda, for sharing their views with me. I also thank Edward Lincoln and Ellis Krauss for their very thoughtful comments on earlier versions of this article presented at the Brookings Institution in 2002. Finally, at the Journal of East Asian Studies, I thank the editor Stephen Haggard, the former editor Byung-Kook Kim, and the anonymous reviewers for their very constructive criticisms.Google Scholar

1. For an overview, see Krasner, Stephen D., ed., International Regimes (Ithaca: Cornell University Press, 1983); Goldstein, Judith L., Kahler, Miles, Keohane, Robert O., and Slaughter, Anne-Marie, eds., Legalization and World Politics (International Organization special issue) (Cambridge: MIT Press, 2001); and Koremenos, Barbara, Lipson, Charles, and Snidal, Duncan, eds., The Rational Design of International Institutions (International Organization special issue) (New York: Cambridge University Press, 2003).Google Scholar

2. Mattli, Walter, “Private Justice in a Global Economy: From Litigation to Arbitration,” International Organization 55, no. 4 (2001): 919–947; Davis, Christina L., “Setting the Negotiating Table: The Choice of Institutions for Trade Disputes,” paper prepared for delivery at the 2003 annual meeting of the International Studies Association, 2003.Google Scholar

3. Bhagwati, Jagdish, The World Trading System at Risk (Princeton: Princeton University Press, 1991), p. 28.Google Scholar

4. Ibid., pp. 15–16.Google Scholar

5. Destler, I. M., Fukui, Haruhiro, and Sato, Hideo, The Textile Wrangle: Conflict in Japanese-American Relations, 1969–1971 (Ithaca: Cornell University Press, 1979), especially pp. 8, 57–62, 315–316; Aggarwal, Vinod K. and Haggard, Stephen, “The Politics of Protection in the U.S. Textile and Apparel Industries,” in Zysman, John and Tyson, Laura, eds., American Industry in International Competition: Government Policies and Corporate Strategies (Ithaca: Cornell University Press, 1983), pp. 271–282, 289–294.Google Scholar

6. Abegglen, James C., Kato, Tadao, Mulkern, Louis J., Yawata, Keiske, Hoadley, Walter E., and Narusawa, Koei, US-Japan Economic Relations: A Symposium on Critical Issues (Berkeley: Institute of East Asian Studies, 1980), pp. 5–6.Google Scholar

7. Pekkanen, Saadia M., “At Play in the Legal Realm: The WTO and the Changing Nature of US-Japan Antidumping Disputes,” in Krauss, Ellis S. and Pempel, T. J., eds., Beyond Bilateralism: The US-Japan Relationship in the New Asia Pacific (Stanford: Stanford University Press, 2004), pp. 221–247; Moore, Michael O., “Steel Protection in the 1980s: The Waning Influence of Big Steel?” in Krueger, Anne O., ed., The Political Economy of American Trade Policy (Chicago: University of Chicago Press for the National Bureau of Economic Research, 1996), pp. 73–130.Google Scholar

8. Millstein, James E., “Decline in an Expanding Industry: Japanese Competition in Color Television,” in Zysman, John and Tyson, Laura, eds., American Industry in International Competition: Government Policies and Corporate Strategies (Ithaca: Cornell University Press, 1983), pp. 106–141.Google Scholar

9. Friedman, David, “Beyond the Age of Ford: The Strategic Basis of the Japanese Success in Automobiles,” in Zysman, John and Tyson, Laura, eds., American Industry in International Competition: Government Policies and Corporate Strategies (Ithaca: Cornell University Press, 1983), pp. 365–367; Nelson, Douglas R., “The Political Economy of U.S. Automobile Protection,” in Krueger, Political Economy of American Trade Policy, pp. 134–146, 169–177.Google Scholar

10. The Japanese proved willing in this deal. Considering that there was an estimated U.S.$2 billion in domestic profit rent transfers to the Japanese firms over the first three years of the VER's operation, it was also not a surprise to find their willingness to continue the VER from 1988 to 1989.Google Scholar

11. Borrus, Michael, Millstein, James E., and Zysman, John, “Trade and Development in the Semiconductor Industry: Japanese Challenge and American Response,” in Zysman, and Tyson, , American Industry in International Competition , pp. 156, 209; Okimoto, Daniel I., “Political Context,” in Daniel I. Okimoto, Takuo Sugano, and Franklin B. Weinstein, Competitive Edge: The Semiconductor Industry in the U.S. and Japan (Stanford: Stanford University Press, 1984), pp. 95–99, 133; Flamm, Kenneth, Mismanaged Trade? Strategic Policy and the Semiconductor Industry (Washington, D.C.: Brookings Institution, 1996), pp. 425–459; Irwin, Douglas A., “Trade Politics and the Semiconductor Industry,” in Krueger, Political Economy of American Trade Policy. Google Scholar

12. Lincoln, Edward J., Japan's Unequal Trade (Washington, D.C.: Brookings Institution, 1990), pp. 142–150.Google Scholar

13. American Chamber of Commerce in Japan (ACCJ), Making Trade Talks Work: Lessons from Recent History (Tokyo: ACCJ, 1997), pp. 25–26, 43–46, 131–132.Google Scholar

14. The following discussion draws on Janow, Merit E., “Trading with an Ally: Progress and Discontent in U.S.-Japan Trade Relations,” in Curtis, Gerald L., ed., The United States, Japan, and Asia: Challenges for U.S. Policy (New York: W. W. Norton, 1994), pp. 65–68, 73–82; Schoppa, Leonard, Bargaining with Japan: What American Pressure Can and Cannot Do (New York: Columbia University Press, 1997), especially pp. 86–94, 257–294; and Lincoln, Edward, Troubled Times: U.S.-Japan Trade Relations in the 1990s (Washington, D.C.: Brookings Institution, 1999), pp. 118–166.Google Scholar

15. Tyson, Laura D., Who's Bashing Whom? Trade Conflict in High-Technology Industries (Washington, D.C.: Institute for International Economics, 1992), pp. 1–14.Google Scholar

16. Bhagwati, Jagdish, “Aggressive Unilateralism: An Overview,” in Bhagwati, Jagdish and Patrick, Hugh T., eds., Aggressive Unilateralism: America's 301 Trade Policy and the World Trading System (Ann Arbor: University of Michigan Press, 1990), pp. 1–45; Calder, Kent E., “Japanese Foreign Economic Policy Formation: Explaining the Reactive State,” World Politics 40, no. 4 (1988): 517–541.Google Scholar

17. Author interview with former METI official, Tokyo, March 18, 2001.Google Scholar

18. Bergsten, Fred C., Ito, Takatoshi, and Noland, Marcus, No More Bashing: Building a New Japan–United States Economic Relationship (Washington, D.C.: Institute for International Economics, 2001), p. 233.Google Scholar

19. Author interview with former METI official, Tokyo, August 13, 1997.Google Scholar

20. For an overview of the historical trajectory, see Pekkanen, Saadia M., “International Law, the WTO, and the Japanese State: Assessment and Implications of the New Legalized Trade Politics,” Journal of Japanese Studies 27, no. 1 (2001): 41–79.CrossRefGoogle Scholar

21. Author interview with METI official, Tokyo, December 6, 2001.Google Scholar

22. Nihon Keizai Shinbun , February 13, 1994.Google Scholar

23. Daily Yomiuri , March 16, 1996.Google Scholar

24. Asahi Shinbun , February 14, 1994.Google Scholar

25. Washington Post , May 11, 1995.Google Scholar

26. WTO WT/DS6.Google Scholar

27. Irwin, Douglas A., “Trade Politics and the Semiconductor Industry,” in Krueger, , Political Economy of American Trade Policy , pp. 56–64.Google Scholar

28. New York Times , December 21, 1996.Google Scholar

29. New York Times , May 28, 1996, and July 30, 1996.Google Scholar

30. See General Agreement on Tariffs and Trade (GATT), GA 1987 , pp. 63–65; and GATT, BISD 35th Supplement, 1987–1988, pp. 116–163.Google Scholar

31. See USTR, Press Release no. 96–65, “U.S. and Japan Reach Semiconductor Accord,” August 2, 1996; and ACCJ, Making Trade Talks Work , pp. 62–63.Google Scholar

32. See USTR, Press Release no. 99–50, “United States, Japan, European Union, Korea and Taiwan Announce New Accord on Semiconductor Trade Practices,” June 10, 1999.Google Scholar

33. From 1995 to 2000, Japan defended 6 percent, the United States 25 percent, and the EU 17 percent of the total number of distinct matters at the WTO. During the same time, Japan filed 4 percent, the United States 30 percent, and the EU 26 percent of the total number of complaints. Figures for the United States and European Union are from U.S. Government Accounting Office (USGAO), World Trade Organization: Issues in Dispute Settlement , GAO/NSIAD-00-210 (Washington, D.C.: USGAO, 2000), pp. 3–4; and USGAO, World Trade Organization: U.S. Experience to Date in Dispute Settlement System—The First Five Years, GAO/NSIAD/OGC-00-196BR (Washington, D.C.: USGAO, 2000), pp. 9–12. Figures for Japan are based on calculations by the author of WTO dispute settlement data from 1995 to the present, and include both cases in which Japan is a single complainant and those in which it is a co-complainant.Google Scholar

34. Iida, Keisuke, “Is WTO Dispute Settlement Effective?” Global Governance 10 (2004), especially pp. 215–216.Google Scholar

35. References to all data for Japan are based my calculation of WTO dispute settlement data from 1995 to 2002. Cases refer to those involving Japan in which consultations were initiated using the WTO dispute settlement machinery, irrespective of final outcome.Google Scholar

36. Pekkanen, Saadia M., “Aggressive Legalism: The Rules of the WTO and Japan's Emerging Trade Strategy,” World Economy 24, no. 5 (2001): 717–721.Google Scholar

37. Pekkanen, Saadia M., “Sword and Shield: The WTO Dispute Settlement System and Japan,” Japanese Economy 28, no. 6 (2000): 3–26.CrossRefGoogle Scholar

38. Pekkanen, Saadia M., “At Play in the Legal Realm: The WTO and the Changing Nature of US-Japan Antidumping Disputes,” in Krauss, and Pempel, , Beyond Bilateralism , pp. 221–247.Google Scholar

39. Author interview with MOFA official, March 15, 2001.Google Scholar

40. The following discussion is based exclusively on the Report of the Panel WTO WT/DS162/R; the Report of the Appellate Body, which heard a joint appeal by Japan and the EU in WTO WT/DS136/AB/R and WT/DS162/AB/R; the Arbitration Report, which merged the complaints of both the EU and Japan in the single document numbered WTO WT/DS136/11 and WTO WT/DS/162/14; and also Japan's formal request for imposing sanctions in WTO WT/DS162/18.Google Scholar

41. The following discussion is drawn from the Report of the Panel WTO WT/DS184/R, the Report of the Appellate Body WTO WT/DS184/AB/R, and the Arbitration Report WTO WT/DS184/13.Google Scholar

42. For an update on Japan's antidumping agenda, see Pekkanen, Saadia M., “The Politics of Japan's WTO Strategies,” Orbis 48, no. 1 (2004): 135–147.Google Scholar

43. WTO WT/DS217/1.Google Scholar

44. WTO WT/DS244/1; G/L/508; G/ADP/D39/1. Reports have also emerged that Japan may be filing another case involving U.S. antidumping measures that target imports of surface-treated sheet steel. See Japan Times , January 24, 2002.Google Scholar

45. Kyoto News , March 9, 2002.Google Scholar

46. Davis, Christina L., Food Fights over Free Trade: How International Institutions Promote Agricultural Trade Liberalization (Princeton: Princeton University Press, 2003), especially pp. 27–28.Google Scholar

47. Jackson, John H., “Designing and Implementing Effective Dispute Settlement Procedures: WTO Dispute Settlement, Appraisal, and Prospects,” in Krueger, Anne O., ed., The WTO as an International Organization (Chicago: University of Chicago Press, 1998), p. 164.Google Scholar

48. Author interview with MOFA official, December 6, 2001.Google Scholar

49. Katzenstein, Peter J., “Varieties of Asian Regionalism,” in Katzenstein, Peter J., Hamilton-Hart, Natasha, Kato, Kozo, and Yue, Ming, Asian Regionalism , East Asia Series (Ithaca: Cornell University Press, 2000), pp. 1–8; Maswood, S. J., “Japanese Foreign Policy and Regionalism,” in Maswood, S. J., ed., Japan and East Asian Regionalism (New York: Routledge, 2001), pp. 5–23; Cai, Kevin G., “Is a Free Trade Zone Emerging in Northeast Asia in the Wake of the Asian Financial Crisis?” Pacific Affairs 74, no. 1 (2001): 7–10.Google Scholar

50. Krauss, Ellis S., “The United States and Japan in APEC's EVSL Negotiations: Regional Multilateralism and Trade Negotiations,” in Krauss, and Pempel, , Beyond Bilateralism ; Ravenhill, John, APEC and the Construction of Pacific Rim Regionalism (New York: Cambridge University Press, 2001), pp. 180–185; Wesley, Michael, “APEC's Mid-Life Crisis? The Rise and Fall of Early Voluntary Sector Liberalization,” Pacific Affairs 74, no. 2 (2001).Google Scholar

51. METI, The Agreement Between Japan and the Republic of Singapore for a New Age Economic Partnership (the JSEPA), January 2002, available at http://www.meti.go.jp (accessed March 16, 2002). See also METI, “Joint Statement for First Formal Negotiations of the Japan-Singapore Economic Agreement for a New Age Partnership (JSEPA),” February 1, 2001, available at http://www.meti.go.jp (accessed March 16, 2002).Google Scholar

52. Hatch, Walter and Yamamura, Kozo, Asia in Japan's Embrace (New York: Cambridge University Press, 1996), p. 5; Lincoln, Edward, Japan's New Global Role (Washington, D.C.: Brookings Institution, 1993), pp. 13–14.Google Scholar

53. Author interview with attorney-at-law at Nishimura & Partners, July 21, 2004.Google Scholar

54. Author interview with MOFA official, July 20, 2004.Google Scholar

55. Cai, Kevin G., “Is a Free Trade Zone Emerging in Northeast Asia in the Wake of the Asian Financial Crisis?” Pacific Affairs 74, no. 1 (2001): 12–14; Japan Times, November 2, 2001; The Australian, March 27, 2002.Google Scholar

56. Author interview with METI official, July 21, 2004.Google Scholar

57. Business Times (Malaysia), December 3, 2001.Google Scholar

58. Straits Times (Singapore), December 10, 2001.Google Scholar

59. Munakata, Naoko, Evolution of Japan's Policy Toward Economic Integration, Center for Northeast Asian Policy Studies (Washington, D.C.: Brookings Institution, 2001); Solis, Mireya, “Japan's New Regionalism: The Politics of Free Trade Talks with Mexico,” Journal of East Asian Studies 3, no. 3 (2001), especially pp. 380–387.Google Scholar

60. Author interview with MOFA official, July 21, 2004.Google Scholar

61. Reportedly, a Japanese textile industry association, which wanted to expand its high-tech fiber products, has reached an agreement concerning textile tariff elimination with its counterparts in Thailand, Malaysia, and the Philippines. See International Herald Tribune/Asahi Shimbun , July 21, 2004.Google Scholar

62. Author interview with MOFA official, July 20, 2004.Google Scholar

63. Author interview with attorney-at-law at Nagashima, Ohno, & Tsunematsu, July 20, 2004.Google Scholar

64. Katada, Saori, “Japan's Counter-Weight Strategy: U.S.-Japan Cooperation and Competition in International Finance,” in Krauss, and Pempel, , Beyond Bilateralism. Google Scholar