Trade and Investment Issues in the New Millennium Round
- New Horizons in International Business series
Edited by Alan M. Rugman and Gavin Boyd
Chapter 8: Japan in the WTO
Terutomo Ozawa 1 INTRODUCTION Japan is at a critical crossroads in managing its economic affairs, both at home and abroad (vis-à-vis other countries). It has long been criticized for being insular, while at the same time taking advantage of the liberal global system of trade and investment, a system that was set up under the Pax Americana and that has come to be codiﬁed initially in the forum of the General Agreement on Tariffs and Trade (GATT) and more recently of its successor, the World Trade Organization (WTO). The criticism of Japan as a ‘free rider’ is muted at the moment (as of this writing), despite the growing – unprecedentedly huge – trade deﬁcit of the United States, for which Japan is in no small part ‘responsible’. This is because the US trade deﬁcit and its accompanying capital inﬂows so far have actually assisted America’s unprecedented economic prosperity to continue without inﬂationary pressure. Japan is also often criticized for its inactivity in taking up any leadership for free trade and investment as an advanced country, and particularly as a triad power, within the multilateral framework of the WTO. Compared to the United States and EU, Japan has been a relatively ‘reluctant’ participant in voicing its own views as to how the world architecture of trade and investment should be redesigned, rebuilt, and managed. It has long been a compromiser and last-minute accommodator to US leadership in global capitalism. After all, the WTO, along with the International...
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