Academic journal article Journal of East Asian Studies

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

Academic journal article Journal of East Asian Studies

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

Article excerpt

The Japanese government today is actively and strategically choosing among various institutional thrums 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 policy, bilateralism, multilateralism, regionalism, preferentialism, General Agreement on Tariffs and Trade (GATT), World Trade Organization (WTO), free trade agreement (FTA), forum choices/forum shopping, international institutions

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At perhaps no point in its postwar history has Japan been quite at the crossroads in terms of its foreign trade diplomacy as it is today at the beginning of the twenty-first century. Unlike in the past, when it focused largely on managing its bilateral trade relationship with the United States, or remained centered on the GATT/WTO (General Agreement on Tariffs and Trade/World Trade Organization) system to manage its overall economic relations, today the Japanese government confronts and appears to be actively choosing among various institutional forums to deal with its trade partners: bilateral venues, multilateral settings, and even preferential regional arrangements. Since this kind of high-profile institutional selection in its trade diplomacy is somewhat unprecedented for Japan, it deserves attention and explanation.

Theoretically and practically, the issue of why states emphasize certain venues at the international level and not others remains a surprisingly underexplored area of research. Political science research has tended to focus largely on the importance and design of and compliance with international institutions, and it is only recently that scholars have even begun to assess the impact of variations in the design of institutional structures along such dimensions as legalization. (1) In the same way that private parties choose among different methods for commercial dispute resolution, so governments, too, always have the choice to pursue their trade diplomacy through various forums at the international level that are not necessarily mutually exclusive or dichotomous. (2) Since we know little about why governments might emphasize one forum over another as a vehicle for trade liberalization or dispute resolution, this article takes a first step forward by focusing on the important case of Japanese trade policy. Japan is engaging in genuine trade forum selection for really the first time, and this allows us to study the factors affecting such choices from the ground up. Moving from its volatile bilateral trade relationship with the United States to its increased emphasis on legalized multilateral diplomacy at the WTO and on to what appears to be a concentration on preferential regional free trade agreements (FTAs), the focus is on extracting the historical and analytical reasons for why officials in the Japanese trade policy establishment turn to one forum rather than another.

The aggregate shifts over time--from bilateral to multilateral to regional/preferential--suggest that there is an evolutionary progression that has brought the substance of Japanese trade diplomacy closer in line to that of the other advanced industrial actors, such as the United States and the European Union (EU). Like these actors, Japan today too actively uses a variety of forums to manage and conduct its trade relations; like them, it is doing so deliberately to increase its leverage both across and within forums. But this is not simply a matter of playing catch-up for Japan or one of increasing leverage through issue-linkages. …

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