Comparing Summitry, Financial and Trade Regionalisms in East Asia: From the Japanese Perspective

The Logic of Japan's Free Trade Agreements (FTA) with ASEAN

“…Scholars argue that there has been a competition between China and Japan over who can make a larger contribution to the process of regionalism and who will be better accepted as a leader by other East Asian nations including ASEAN Prastirtsuk 2010;Yoshimatsu 2008;Ravenhill 2008;Hamanaka 2008). A so-called aid war has occurred between China and Japan over who can lead FTAs and other projects, such as ODA, and CMIM, as if they evaluate their qualification for regional political leadership based on their performance within those initiations (Rathus 2010;Yew 2008).…”

“…Before the 1990s, Japan had been determined to follow the WTO accord, and had especially hoped for the Doha Round, one of WTO negotiation rounds that had begun in 2001, to settle agricultural issues (Hatasa 2011;Hamanaka 2008).Japan, or especially the Ministries of Agriculture, Forestry, and Fisheries of Japan, had long been concerned with a protection of Japanese agricultural products because these products, such as rice and beef, have been relatively expensive compared to that of other nations. While Japan has set tariffs on non-agricultural goods at 2.5% when negotiating FTAs with others, its tariffs on agricultural goods are set at 12 to 21% in order for Japan to preserve domestic agricultural sector (Hatasa 2011).…”

“…As noted, it is believed that their political rivalry has impeded China and Japan from concluding a FTA between them. For example, the Northeast Asia Free Trade Area has only been under consideration, but has never practically exercised its functions Hamanaka 2008). However, a main concern still rests on their economic benefits.…”

“…FTAs can only bring burdens on their economic actors, such as their own farmers (Hamanaka 2008, 78). Hamanaka(2008) states: "The essential reason why both Japan and China are reluctant to form an FTA including the other seems to be based on the entailed economic costs (78). He further asserts that it is weak to argue political frictions between China and Japan are impediments to their FTAs.…”

“…Not only does political rivalry fluctuate from time to time, but this view also leads to a controversial explanation that China and Japan are both eager to promote East Asian regionalism in the same framework that ties them in financial and monetary sectors, while they want to exclude each other only in trade or the case of an FTA (Hamanaka 2008, 78). Indeed, Japan's first FTA with Singapore was successful because Singapore, as a non-agricultural country, had minimally threatened Japan's economic interests in protecting its agricultural sector (Hamanaka 2008;Ravenhill 2008;Yun 2004). For the same reason, Japan was able to sign FTAs with other nations in the following years.…”