Japanese Trade Policy

Abstract

This chapter examines Japanese trade policy to explain how economic interests and domestic political institutions have supported the resilience of free trade policies in Japan. The mercantilist ideas and the reactive state model of past years have been replaced by strong support of free trade and Kantei diplomacy to lead in setting rules for the trade regime complex. Once dependent on the United States and mired in bilateral trade friction, Japan has emerged as an active supporter of engagement with China and the pursuit of free trade agreements, alongside continued commitment to the multilateral rules. Japanese-style trade adjustment and the slow path to liberalization served to balance economic efficiency with political stability as the government has supported narrow interests along with long-term trade strategies for economic growth.