Japan’s Competitive FTA Strategy: Commercial Opportunity versus Political Rivalry

Abstract

Japan’s decision to join the FTA (free trade agreement) frenzy is best explained as an instance of policy diffusion whereby the prior actions of other FTA nations created strong pressure for Japan to reverse its half-century of exclusive support for the multilateral system. The literature on policy diffusion has identified two major forces for the spread of economic policies (in this case preferential trade accords): ideational dissemination (emulation) whereby new policy paradigms become predominant, or competition whereby the search for relative advantage induces governments to embrace policies likely to yield economic, political, or rule-making benefits.