Political Geography: Japan / Topic: International Trade and Finance

1. Trade Balances and International Competitiveness in Cyber-physical, Digital Task-intensive, ICT Capital-intensive and Traditional Industries

Author:: Alexandra Bykova and Roman Stöllinger
Publication Date:: 05-2023
Content Type:: Special Report
Institution:: The Vienna Institute for International Economic Studies (WIIW)
Abstract:: In this report, we analyse the international competitiveness of the EU in four industry groups over the period 1995-2018. The groups are delineated by specific factor intensities, where these intensities are assessed from digital tasks performed by labour services and ICT capital stocks. The EU’s positions relating to trade balances, revealed comparative advantages and unit value ratios are assessed relative to its main competitors, such as the US, China, Japan and South Korea. The trade specialisation patterns confirm EU advantages in traditional industries, which still represent the largest part of global trade, and in the group of digital task-intensive industries. In the cyber-physical group of industries, which are characterised by both high digital task and ICT capital intensities, the EU records a trade deficit, although this has been receding in recent years. Competitiveness indicators depict heterogeneity among EU countries. The loss of international competitiveness for some technology front-runners is a worrying sign. On the positive side, however, a reduction in trade deficits or an improvement in product quality and market shares is evident for certain EU countries, especially in the Central European region.
Topic:: International Trade and Finance, European Union, Trade, Digitalization, and International Competition
Political Geography:: Japan, China, Europe, Asia, South Korea, and United States of America

2. Japan and the Regional Comprehensive Economic Partnership (RCEP)

Author:: Mie Oba
Publication Date:: 10-2022
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This paper aims to clarify the role of Japan in the process leading up to the establishment of the Regional Comprehensive Economic Partnership (RCEP). While emphasising that respect for the centrality of the Association of Southeast Asian Nations (ASEAN) was a principle of RCEP, Japan played a leading role in the process of RCEP negotiations. For Japan, RCEP is one of the fruits of its strategy in East Asia/Asia-Pacific that began the mid-1990s to protect and increase the interests and advantages of Japanese business and retain Japan’s political leverage in the region. When substantial negotiations for RCEP began in 2013, its importance for Japan was secondary to other free trade agreements (FTAs) including the Trans-Pacific Partnership, China–Japan–Korea FTA, and Japan–European Union FTA. However, the Government of Japan and the business community had set a lot of economic and strategic goals in promoting RCEP. After the withdrawal of the United States (US) from the Trans-Pacific Partnership, RCEP was seen as an essential framework for establishing a rules-based regional order in the Indo-Pacific region. Although it was after India’s withdrawal from the RCEP negotiations, Japan further emphasised the importance of RCEP as the measure to sustain and foster the rule-based regional order and simultaneously pursued the conclusion of negotiations and the establishment of high-level rules, achieving some success. Ultimately, the havoc brought about by the coronavirus disease (COVID-19) pandemic and the sense of crisis in the traditional liberal international order caused by the intensifying strategic competition between the US and China, drove the conclusion of RCEP. RCEP will be increasingly important for economic order in Japan and Asia in the coming years. Ironically, as the strategic competition between the US and China escalates and leads to a surge in protectionism, the economic and strategic importance of RCEP – an FTA that incorporates China – is becoming more significant as a measure to counter unilateralism and protectionism. In addition, RCEP needs elements that address globalisation’s adverse effects and pitfalls, in areas such as the environment, labour rights, and a reduction in the disparity between the rich and poor.
Topic:: Development, Economics, International Trade and Finance, and Regional Cooperation
Political Geography:: Japan and Asia

3. Can the Biggest Emitters Set Up a Climate Club? A Review of International Carbon Pricing Debates

Author:: Carole Mathieu
Publication Date:: 06-2021
Content Type:: Special Report
Institution:: Institut français des relations internationales (IFRI)
Abstract:: The world’s largest emitting countries are reconsidering the role of carbon pricing instruments and increasingly looking at carbon border adjustment mechanisms (CBAMs) to address leakage concerns. This renewed momentum should trigger a broader discussion on how to make trade policies compatible with the climate agenda. With the Glasgow climate conference (COP26) approaching, the concept of putting a price on carbon is generating unprecedented interest in Canada and the United States (US), China and Japan. But the European Union (EU) still stands as an exception; it is the only regional trading bloc that is determined to leverage the full potential of its emissions trading system (ETS). To date, others have lacked the political backing to deploy nation-wide carbon pricing initiatives with a design sturdy enough to drive meaningful emission reductions. Canada has made significant progress with the adoption of a national framework for carbon pricing in 2018. The country’s draft regulations foresee the introduction of a federal ETS as of 2022 and a gradual increase in carbon prices, but its ambitions risk being upset by the lack of consistent efforts in the US, its largest trading partner. Given US political divides, a federal carbon pricing scheme is unlikely to materialize in the short run. In China, the long-delayed national ETS has finally been launched. However, its scope is restricted to the power sector for now, and it is likely to only have a modest impact on coal use with its current design. Several arguments may discourage China from fully extending its ETS as planned and rather argue in favor of introducing a complementary carbon tax. Japan has also engaged an expert debate on the benefits of introducing carbon pricing at the national level, but the government is struggling to find a balance between the risk of worsening competitiveness and the need to mobilize investment in clean technologies. For the EU, the upcoming reform of the EU ETS is an opportunity to introduce a truly demanding cap reduction for the 2023-2030 period and make this flagship instrument more robust, predictable, and fair. To initiate in-depth decarbonization of its industry, the EU will need to phase out free allowances. Therefore, other measures addressing unfair competition will have to be introduced and CBAM could be part of the solution. A unilateral application is however no panacea. The EU should move cautiously and start implementing the CBAM to a small set of sectors. This also means that the challenge of leveling the playing field with non-EU producers will remain largely unresolved. There is little chance that an international alliance on carbon pricing or “climate club” can be set up within a timeframe compatible with the climate emergency. Yet, the EU’s CBAM proposal can encourage trading partners to accelerate decision-making on carbon pricing, at least to obtain partial exemption. In addition, having a concrete anti-leakage proposal on the table leads to a sense of the inevitable mismatches between the global trade and climate agendas. Large emitters are starting to acknowledge the need for a multilateral discussion on how to decarbonize industries while maintaining a level playing field. The next step should be to kickstart an open discussion in all possible multilateral fora (G20, International Energy Agency, global industry associations, etc.) and mandate the World Trade Organization (WTO) to develop guidance on a wide range of instruments (including CBAM, but also eco-design labelling and standards, differentiated tariffs based on CO2 intensity, etc.) and including a common exemption approach for Least Developed Countries. Exploring a set of workable solutions should be more attractive to trade partners than pushing for a uniform solution, but results would still take time to materialize. Hence, establishing a level playing field with imports will likely require the EU – and all countries with an aggressive decarbonization agenda for their industries – to strengthen their financial and regulatory support to the deployment of innovative low-carbon manufacturing processes. Again, this almost-unavoidable resort to State aid would strongly benefit from a multilateral discussion.
Topic:: Climate Change, International Trade and Finance, European Union, Carbon Tax, and Carbon Emissions
Political Geography:: Japan, China, Europe, and Canada

4. East Asian Integration and Its Main Challenge: NTMs in Australia, China, India, Japan, Republic of Korea, and New Zealand

Author:: Yan Lili Ing and Grace Hadiwidjaja
Publication Date:: 07-2021
Content Type:: Research Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: While East Asia has been moving forward with its regional integration agenda, one main challenge remains and is growing – non-tariff measures (NTMs). Animal, vegetable, and food products tend to be more regulated than other products, largely due to quality and safety standards. NTMs affect 66%–98% of total trade in those sectors. Our paper presents the frequency index, coverage ratio, and prevalence score to measure NTMs in the region. They are highest amongst food, vegetable, and animal products; and vary amongst other products, depending on the economy. We find that the high frequency index of NTMs does not necessarily translate to a high value of coverage ratio for trade. One explanation could be that countries tend to regulate imported goods which compete with the domestic products more than imported goods which they need.
Topic:: Globalization, International Trade and Finance, Regional Cooperation, Tariffs, Non-Tariff Measures, and Economic Integration
Political Geography:: Japan, China, India, Asia, South Korea, Australia, Southeast Asia, and New Zealand

5. The Clash of Japan’s FOIP and China’s BRI?

Author:: Daisuke Akimoto
Publication Date:: 06-2021
Content Type:: Journal Article
Journal:: The Rest: Journal of Politics and Development
Institution:: Centre for Strategic Research and Analysis (CESRAN)
Abstract:: Since the late 2010s, the concept of the “Indo-Pacific” has been becoming increasingly significant in the international political arena. In August 2016, Japanese Prime Minister Shinzo Abe proposed a policy of “Free and Open Indo- Pacific” (FOIP) as Japan’s new diplomatic vision at the Tokyo International Conference on African Development (TICAD) VI held in Kenya. The FOIP strategy was supported by the Donald Trump administration followed by the renaming of the United States Indo-Pacific Command. However, China has viewed the FOIP as a containment strategy against the Chinese Belt and Road Initiative (BRI). The FOIP vision is unclear for general observers, and it might cause a security dilemma with the Chinese BRI. Is it possible for the FOIP vision to coexist with China’s BRI, or are these two strategic visions destined to clash with each other? In an attempt to answer these questions, the article aims to provide multiple perspectives of the FOIP concept by applying international relations (IR) theory. This article warns that the FOIP and the BRI are likely to bring about diplomatic tension that could be escalated into a military skirmish over the territorial dispute. In order to avoid the possible military clash, it finally seeks to explore possible future pathways of the peaceful coexistence of the two visions in the Indo-Pacific region.
Topic:: International Trade and Finance, Infrastructure, Belt and Road Initiative (BRI), and Rivalry
Political Geography:: Japan, China, and Asia

6. Labour Market Impacts of Import Penetration from China and Regional Trade Agreement Partners: The Case of Japan

Author:: Kazunobu Hayakawa, Tadashi Ito, and Shujiro Urata
Publication Date:: 04-2020
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: The impacts of imports on the domestic labour market have been hotly debated recently. The purpose of this paper is to empirically examine the effects of not only imports from China but also those under regional trade agreements (RTAs) on employment in Japan. As in previous studies in the literature, we found that the rise in import penetration from China significantly decreases employment in Japan. However, import penetration under RTA regimes is found to have insignificant effects on employment. The finding suggests that the increase in imports under RTA regimes might not be harmful to the domestic labour market. In addition, we did not find significant effects of import penetration via input–output linkages. This insignificant result may be because imports by Japanese manufacturing firms are mostly conducted in the form of intra-firm trade, enabling them to avoid negative impacts on employment.
Topic:: International Trade and Finance, Regional Cooperation, Labor Issues, Employment, and Manufacturing
Political Geography:: Japan, China, and Asia

7. Tariffs and Monetary Policy: A Toxic Mix

Author:: Michael D Bordo and Mickey D. Levy
Publication Date:: 01-2020
Content Type:: Journal Article
Journal:: The Cato Journal
Institution:: The Cato Institute
Abstract:: The ratcheting up of tariffs and the Fed’s discretionary conduct of monetary policy are a toxic mix for economic performance. Escalating tariffs and President Trump’s erratic and unpredictable trade policy and threats are harming global economic performance, distorting monetary policy, and undermining the Fed’s credibility and independence. President Trump’s objectives to force China to open access to its markets for international trade, reduce capital controls, modify unfair treatment of intellectual property, and address cybersecurity issues and other U.S. national security issues are laudable goals with sizable benefits. However, the costs of escalating tariffs are mounting, and the tactic of relying exclusively on barriers to trade and protectionism is misguided and potentially dangerous. The economic costs to the United States so far have been relatively modest, dampening exports, industrial production, and business investment. However, the tariffs and policy uncertainties have had a significantly larger impact on China, accentuating its structural economic slowdown, and are disrupting and distorting global supply chains. This is harming other nations that have significant exposure to international trade and investment overseas, particularly Japan, South Korea, and Germany. As a result, global trade volumes and industrial production are falling. Weaker global growth is reflected in a combination of a reduction in aggregate demand and constraints on aggregate supply.
Topic:: International Trade and Finance, Monetary Policy, Economic Growth, Tariffs, and Industry
Political Geography:: Japan, China, Europe, Asia, South Korea, Germany, North America, and United States of America

8. Learning to Love Trade Again

Author:: Frank Lavin and Oscar Guinea
Publication Date:: 06-2020
Content Type:: Research Paper
Institution:: European Centre for International Political Economy (ECIPE)
Abstract:: We are at the moment, the first in seventy-five years, where there is no international consensus in support of trade. Indeed, trade is unloved, unsupported, and even unwanted. There is no shortage of topics in the rhetoric of trade complaints: from the rapid rise of China to Coronavirus as a metaphor for the evils of greater connectivity. Regardless of the validity of these complaints, none of them negate the central truth of trade: countries that engage in trade move ahead, and those that do not, stagnate. Our political leaders disagree. Anti-trade positions are held by leaders across the political spectrum, from Donald Trump to Bernie Sanders. And yet, the public is increasingly warm to the idea of trade. When Gallup asks Americans, “Do you see foreign trade more as an opportunity for economic growth through increased U.S. exports or a threat to the economy from foreign imports?” a record high of 79% see trade as an opportunity, with 18% viewing it as a threat. How did the world arrive at this moment where the benefits of trade are clearly evidenced while trade has become politically toxic? We identify four main factors: (i) U.S. absenteeism from the leadership role; (ii) detachment between trade and security architecture; (iii) no alternative leadership in Europe or elsewhere; and (iv) the cumbersome WTO process. Against this background we put forward five initiatives that will be big enough to count but unobjectionable enough to be adopted. The Big Three. The U.S., EU, and Japan, should establish a consultative body on trade to forge a new approach that allows trade to move ahead in the absence of universal consensus. No harm, no foul. Each of the Big Three should commit to zero tariffs on any item not produced in each particular market. A de minimis strategy. Tariffs should be eliminated on all products where the current tariff is less than 2%. At that level tariffs are simply a nuisance fee. Mind the social costs. Expand the Nairobi Protocols to include health products and green tech. Scrapping import tariffs on medical and green goods would not only encourage additional trade but will also provide health and environmental benefits. Harmonize down. The Big Three should commit that on every tariff line each of the three will be no worse than the next worse. In other words, each of the Big Three will agree to reduce its tariff on every product where it has the highest tariff of the three. These actions will spur the WTO, not undermine it. The measures we propose can be set up on a plurilateral basis that would allow other trading powers to participate. By breaking away from the tyranny of universal consensus, these actions will encourage the trading community – including the WTO – to get back in forward motion. In some respect, convergence between the Big Three is already happening. The EU and Japan signed an FTA that lowers import tariffs between these two economies, while the U.S. and Japan agreed to negotiate a comprehensive FTA. And if China is willing to step up? China should be welcomed into this group if it supports the four initiatives, changing the Big Three to the Big Four.
Topic:: International Political Economy, International Trade and Finance, Global Markets, Trade, and WTO
Political Geography:: United States, Japan, China, Europe, and Global Focus

9. Implications of Foreign Direct Investment, Capital Formation and its Structure for Global Value Chains

Author:: Amat Adarov and Robert Stehrer
Publication Date:: 11-2019
Content Type:: Working Paper
Institution:: The Vienna Institute for International Economic Studies (WIIW)
Abstract:: In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
Topic:: Globalization, International Trade and Finance, Foreign Direct Investment, Trade, and Global Value Chains
Political Geography:: United States, Japan, and Europe

10. The Global Exchange (Winter 2018)

Author:: Adam Frost, David J. Bercuson, Stephen Blank, Monica Gattinger, Sarah Goldfeder, Colin Robertson, Hugh Stephens, Laura Dawson, Randolph Mank, Ferry de Kerckhove, Colin Robertson, Andrew Caddell, Robert Hage, David Perry, and Kelly Ogle
Publication Date:: 12-2018
Content Type:: Journal Article
Journal:: The Global Exchange
Institution:: Canadian Global Affairs Institute (CGAI)
Abstract:: During the 1947 Duncan & John Gray Memorial Lecture then-minister of external affairs, Louis St. Laurent, outlined guiding principles for Canada’s engagement with the world. In his address, he recognized that Canada could not maintain the standard of living Canadians had come to enjoy in isolation from the rest of the world. He said, “[we] are dependent on markets abroad for the large quantities of staple products we produce and cannot consume, and we are dependent on supplies from abroad of commodities which are essential to our well-being.” This irrefutably remains true today. Canada’s ability to utilize its vast wealth of resources has afforded it the opportunity to become one of the most affluent and developed nations in the world, making the preservation of such ability of vital national interest. However, trade in the 21st century is more complex than ever before. Technology allows for transactions between parties scattered across the globe to occur near instantaneously, and complicates the tracking and classification of many goods and services. Moreover, global political developments and economic transformation are threatening the liberal world order built and protected by the United States since the Second World War. China’s emergence as an economic juggernaut is shifting the global economic centre of gravity. Furthermore, reactionary domestic political forces within much of the western liberal democratic world, including the United States, question the value of continued support for the status quo. Tectonic change is afoot. In response, Canada is charting its path to navigate the challenges of 21st century global trade. Prime Minister Justin Trudeau’s Liberal government is pursuing a progressive trade agenda as it seeks to modernize existing agreements, implement newly minted agreements, and explore potential future opportunities. The lead package of this issue examines a multiplex of challenges and opportunities presented to those currently crafting Canadian trade policy. Geographically, it spans not only the management of relations with the United States and NAFTA renegotiation, but also the geopolitical considerations of bolstered engagement with Asia and the underappreciated opportunities present in Africa and South America. In addition to "with whom", this package also addresses the "how and why" of trade: the difficulty of adapting trade practices to the digital age and the costs, benefits and limitations of projecting Canadian values via trade relations. In computer simulated and professional chess matches white consistently wins more often than not. The lack of first-mover advantage is a formidable deficit to overcome. Those who are not leading, are fated to play catch-up. The challenges facing Canada’s policy-makers responsible for protecting and advancing our national interest via trade are legion. To optimally address these challenges, Canada is best served by being proactive at the forefront of negotiations. The benefits of cultivating a proactive posture are enticing, and the costs for failing to do so are avoidable. Canada must adapt to the dynamism of the global economic order, or fight to catch-up.
Topic:: Diplomacy, International Trade and Finance, Science and Technology, Infrastructure, Internet, NAFTA, and Trade Policy
Political Geography:: Africa, Japan, Canada, India, Asia, North America, and United States of America

11. BALANCING AGAINST CHINA WITH THE ASIA-AFRICA GROWTH CORRIDOR: AN INDIAN-JAPANESE INITIATIVE TOWARDS THE INDO-PACIFIC

Author:: Carlos Eduardo Carvalho and João Paulo Nicolini Gabriel
Publication Date:: 10-2018
Content Type:: Journal Article
Journal:: Conjuntura Austral: Journal of the Global South
Institution:: Conjuntura Austral: Journal of the Global South
Abstract:: The launch of a vision document for Asia-Africa Growth Corridor (AAGC) at the African Development Bank meeting in Gujarat in 2017 reveals an important aspect to grasp the awkening of a strategy to face China’s rise. This conference of the African Development Bank (AfDB) is a landmark for this initiative. This bank is a mechanism for economic and social development with the participation of non-African members (e.g. China, India, Brazil, the United States, and Japan). The main contributors to the African Development Fund -linked to this bank -are the United Kingdom, the USA and Japan. Beijing does not figure among the most influent members of this organization. Thus, it was an opportunity for think tanks, supported by India and Japan, to introduce the idea of a corridor aimed to link Asia to Africa in order to increase co-operation in agriculture, social development and technology sharing.
Topic:: Development, International Political Economy, International Trade and Finance, Economic Growth, Banks, Trade, Economic Development, Trade Policy, and Economic Cooperation
Political Geography:: Africa, Japan, China, and Asia

12. The Article II Mandate: Forging a Stronger Economic Alliance between the United States and Japan

Author:: Matthew P. Goodman, Ann Listerud, and Daniel Remler
Publication Date:: 12-2018
Content Type:: Working Paper
Institution:: Center for Strategic and International Studies
Abstract:: The alliance between the United States and Japan has been a force for peace and prosperity around the world for nearly 60 years. Economics has been at the heart of the U.S.–Japan alliance from the outset: Article II of the Treaty of Mutual Cooperation and Security mandates that the two allies “seek to eliminate conflict in their international economic policies and … encourage economic collaboration between them.” Nowhere are U.S. and Japanese strategic interests more closely aligned than in the Indo-Pacific region. Both Washington and Tokyo seek to ensure regional security and stability, expand trade and other economic opportunities, and support universal democratic norms. The two countries have worked constructively together for many decades to shape regional economic rules and norms through institutions such as the Asian Development Bank and the Asia-Pacific Economic Cooperation (APEC) forum.
Topic:: International Cooperation, International Trade and Finance, Regionalism, and Economic Cooperation
Political Geography:: Japan, China, Asia, North America, and United States of America

13. ASEAN as an FDI Attractor: How Do Multinationals Look at ASEAN?

Author:: Masahito Ambashi
Publication Date:: 01-2017
Content Type:: Policy Brief
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: This policy brief presents an overview of the ASEAN economy in terms of its economic relationship with multinationals, particularly Japanese companies, that have long invested in this region. ASEAN has been an attractor of foreign direct investment (FDI). Business interest in ASEAN has increased again recently due to the (i) relatively low wage of ASEAN compared to China, (ii) establishment of the ASEAN Economic Community (AEC), (iii) economic partnership network with a core of ASEAN countries, (iv) large-scale market covered by ASEAN, and (v) rise of CLMV countries (Cambodia, Lao PDR, Myanmar, and Viet Nam). In these trends, ASEAN has established a reciprocal economic relationship with other countries and regions. To develop its economy, ASEAN member states are expected to further advance the AEC at a high level. Hence, ASEAN must address challenges such as deepening further economic integration and narrowing development gaps in the region. Most importantly, ASEAN still needs to increase the attractiveness of its 'whole region' as an essential and integral part of global value chains to draw further FDI.
Topic:: Economics, International Political Economy, International Trade and Finance, and Global Political Economy
Political Geography:: Japan and Southeast Asia

14. How not to create zombie banks: lessons for Italy from Japan

Author:: Mark Hallerberg and Christopher Gandrud
Publication Date:: 03-2017
Content Type:: Policy Brief
Institution:: Bruegel
Abstract:: Japan serves as a cautionary tale for Italy on how to clean up banking-sector problems. A general lesson is the need for policies to forthrightly address non-performing loans (NPLs) in countries with widespread banking problems. This helps address zombie banks and sluggish economic growth. The Japanese experience indicates that three elements are necessary to address NPLs: (a) sufficiently capitalised banks that can take losses from NPL write-downs; (b) an independent regulator that can identify problems and force action; and (c) tools to manage the orderly disposal of NPLs. The problem is not that this combination of policy tools is unknown, but that banks and governments lack incentives to use them in combination. Italy’s December 2016 package providing €20 billion for recapitalisation of banks is a step in the right direction. Similarly, pressure from the European Central Bank on Italian authori- ties and on banks to address NPLs is welcome. However, policy tools to manage and dispose of NPLs and, just as importantly, incentives to use them, are lacking. In January 2017, the European Banking Authority published a set of policy proposals for NPL resolution. Those include national and European-level public asset management companies (AMC), also known as ‘bad banks’. We argue that in Italy, the incentives to use such tools and dispose of NPLs have been weak.
Topic:: International Trade and Finance, Political Economy, Economic structure, and Global Political Economy
Political Geography:: Japan and Italy

15. Common Ground for the United States, Japan, and China in Southeast Asia

Author:: Brian Harding
Publication Date:: 03-2017
Content Type:: Special Report
Institution:: Center for American Progress - CAP
Abstract:: Over the past decade, Southeast Asia’s economic and geopolitical profile in the world has risen dramatically. Its $2.5 trillion economy is a rare bright spot for global growth.1 Plus, the increasingly integrated Association of Southeast Asian Nations, or ASEAN, is a rare example of a regional political structure writing its own destiny—in this case, the agenda for the emerging regional security architecture of the Asia-Pacific.2 The region has also emerged, however, as a nexus for a range of transnational threats, ranging from trafficking in illicit goods to extreme weather events that are a result of climate change.3 Yet the region’s vital sea lanes have only grown more important, with more than half of the world’s merchant tonnage and one-third of global maritime traffic transiting the region every day on their journey from the Persian Gulf and Indian Ocean to the economic powerhouses of Northeast Asia.4 The world has taken note of the opportunities presented by increased involvement in Southeast Asian affairs, as well as the challenges the region faces. Governments and multinational companies across the world are ramping up engagement with the region bilaterally with individual countries and multilaterally with ASEAN. Southeast Asian countries wholeheartedly welcome this global interest for both economic and strategic reasons. Economically, despite the region’s promise, all but Singapore and Brunei are developing countries in desperate need of foreign investment to continue their upward trajectories. Most critically, the region faces a multitrillion-dollar infrastructure gap that constrains economic growth and perpetuates inequality.5 With indigenous capital and even the commitments of international development banks unable to meet demand on this scale, investment by major powers is essential for the region to achieve its potential. Strategically, Southeast Asian countries welcome engagement by a wide range of outside powers to ensure that the region’s partnerships are highly diversified. As a grouping of small countries with modest military and economic power, robust partnerships with a range of actors ensure that no single outside power can dominate regional affairs. In essence, the region prefers a balance of power—or in Indonesian parlance, dynamic equilibrium. While welcoming and encouraging international involvement in regional affairs, Southeast Asian nations also naturally seek to do so on their own terms. For countries making national decisions regarding foreign investment or security cooperation with an outside power, these smaller countries can often find themselves in a position of weakness relative to the outside power. However, collectively, ASEAN provides a platform that allows each country to punch above its weight, providing a venue to make certain issues ASEAN issues rather than national issues for the purpose of creating greater leverage with outside powers. Quite remarkably, despite its flaws, the bloc has managed to maintain its position in the region as the driver of Asia-Pacific regionalism, while outside powers routinely reiterate the importance of “ASEAN centrality.”6 This report outlines findings from a recent trilateral dialogue, organized by the Center for American Progress, of Southeast Asia experts from the United States, Japan, and China. It describes the current state of U.S., Japanese, and Chinese engagement in Southeast Asia and presents four areas for potential U.S.-Japan-China collaboration with Southeast Asian partners on shared challenges.
Topic:: Diplomacy, International Cooperation, International Trade and Finance, Partnerships, and Strategic Interests
Political Geography:: Japan, China, Asia, North America, Southeast Asia, and United States of America

16. Between the Eagle and the Dragon: America, China, and Middle State Strategies in East Asia

Author:: G. John Ikenberry
Publication Date:: 03-2016
Content Type:: Journal Article
Journal:: Political Science Quarterly
Institution:: Academy of Political Science
Abstract:: For more than half a century, the United States has played a leading role in shaping order in East Asia. This East Asian order has been organized around American military and economic dominance, anchored in the U.S. system of alliances with Japan, South Korea, and other partners across Asia. Over the decades, the United States found itself playing a hegemonic role in the region—providing security, underwriting stability, promoting open markets, and fostering alliance and political partnerships. It was an order organized around “hard” bilateral security ties and “soft” multilateral groupings. It was built around security, economic, and political bargains. The United States exported security and imported goods. Across the region, countries expanded trade, pursued democratic transitions, and maintained a more or less stable peace.
Topic:: Security, Diplomacy, International Trade and Finance, Treaties and Agreements, Bilateral Relations, and Hegemony
Political Geography:: Japan, East Asia, and South Korea

17. The Asian Development Bank and the Asian Infrastructure Investment Bank: Conditional Collaboration?

Author:: Robert M. Orr
Publication Date:: 04-2016
Content Type:: Working Paper
Institution:: Council of American Ambassadors
Abstract:: In the past two years, the creation of the Chinese-sponsored Asian Infrastructure Investment Bank (AIIB) has caused considerable attention in many capitals, particularly in Washington and Tokyo. Some view the establishment of the AIIB as a challenge to the supremacy of the post-World War II Bretton Woods order. Others see it as another symbol of shifting regional power in Asia. Some have deep concerns about the AIIB’s willingness to adhere to international safeguards and open procurement.
Topic:: International Trade and Finance
Political Geography:: United States, Japan, China, and Asia-Pacific

18. Financial Reforms in Myanmar and Japan's Engagement

Author:: Tomoo Kikuch and Takehiro Masumoto
Publication Date:: 11-2016
Content Type:: Working Paper
Institution:: Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:: Since 2011, under the Thein Sein government, Myanmar has started to build financial institutions almost from scratch. Japan has played a leading role in this transition, writing off debt, opening the Yangon Stock Exchange, vying for the entry of Japanese banks, and laying out finance-related laws. As in other Southeast Asian countries, Myanmar's oligopolistic economic structure and colonial past present considerable challenges. There is a rich literature on the relationship between well-functioning financial institutions and economic growth, but the causality of this relationship remains inconclusive. This paper examines the preconditions for financial institutions to be a vehicle for Myanmar's development.
Topic:: International Trade and Finance, Finance, and Financial Markets
Political Geography:: Japan and Myanmar

19. India-Japan Brief

Author:: Rani Mullen and Kashyap Arora
Publication Date:: 11-2016
Content Type:: Special Report
Institution:: Centre for Policy Research, India
Abstract:: Japan and India constitute two of the oldest democracies in Asia and also stand among Asia’s three biggest economies. It was in the year 1952 that India and Japan signed their first treaty and six years later in 1958, India received its first official development assistance from Japan. However, a major breakthrough in the bilateral ties took place only in the year 2000 when Japanese Prime Minister Yoshiko Mori visited India. The visit witnessed establishment of ‘Global Partnership between India and Japan’. This relationship was elevated to ‘Global and Strategic Partnership’ in 2006 which was later followed by up gradation of the bilateral partnership to the status of ‘Special Strategic and Global Partnership’ in 2014. In December 2015, both Indian and Japanese leaders also laid out the future roadmap of India-Japan ties in a joint statement referred to as ‘Japan and India Vision 2025: Special Strategic and Global Partnership Working Together for Peace and Prosperity of the Indo-Pacific Region and the World’. Both the economies also find themselves in a mutually beneficial situation with Japanese economy finding it difficult to sustain economic growth due to its ageing and shrinking population size, whereas India suffers from infrastructural bottlenecks. More importantly, stronger India-Japan alliance also provides impetus to balance and counter the growing Chinese influence and ensure freedom of navigation and multilateralism in the Indo-Pacific. Both the countries also constitute a strong source of mutual support at multilateral level on global issues including each other’s candidature as a permanent member of an expanded United Nations Security Council (UNSC) as well as India’s membership in the four international nuclear export control regimes among many others.
Topic:: International Trade and Finance, United Nations, Bilateral Relations, Partnerships, Economies, and Multilateralism
Political Geography:: Japan, South Asia, India, and East Asia

20. Official Cooperation, Domestic Challenges

Author:: Charles McClean and Sheila A. Smith
Publication Date:: 01-2016
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: Washington and Tokyo made significant progress on two new initiatives this fall – Japan’s implementation of legislation for the exercise of collective self-defense and the conclusion of negotiations with other participants in the Trans-Pacific Partnership (TPP). With Japanese Upper House elections in the summer and US presidential elections in the fall, trade, military strategy, and US-Japan security cooperation will be part of the political discourse in both countries. Along with the ratification process for the Trans-Pacific Partnership trade deal, two challenges for Washington and Tokyo that will continue into the new year are how to respond to Chinese land reclamation in the South China Sea and how to deal with local opposition to Tokyo’s plans for building a new airfield to replace the Futenma facility on Okinawa. Two challenges to Washington and Tokyo will continue into the new year. The first is how to respond to Chinese land reclamation in the South China Sea. Military leaders from Japan and the US discussed China’s accelerated building in the Spratly Islands, and the Japanese role in a regional response was on the agenda when Prime Minister Abe and President Obama met on the sidelines of the APEC meeting in Manila. The USS Lassen’s freedom of navigation operation near Subi Reef on Oct. 27 was welcomed by Tokyo, but there is no suggestion yet that Japan is willing to conduct similar operations in the South China Sea. The second challenge is far from new, but local opposition to Tokyo’s plans for building a new airfield to replace the Futenma facility operated by the US Marines has risen again. The central government filed a legal suit directed at Okinawa in November, and then Gov. Onaga Takeshi filed his own civil suit against the central government in December. This battle in the courts over new base construction in Oura Bay is the second legal showdown between the prefecture and Tokyo over who has the authority to control decision making on base consolidation in Okinawa.
Topic:: Security, Defense Policy, Diplomacy, International Cooperation, International Trade and Finance, and Alliance
Political Geography:: Japan, Asia, North America, and United States of America

21. Incremental, But Groundbreaking Steps

Author:: Catharin Dalpino
Publication Date:: 05-2016
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: Two objectives drive Japan’s increasing engagement with Southeast Asia: stimulating Japanese economic growth through investment in large-scale infrastructure abroad, and supporting regional maritime domain awareness. While Tokyo officially denies any suggestion of rivaling or checking China with these policies, the timing and nature of Japan’s “pivot” to Southeast Asia would suggest otherwise. The number of “first-ever” Japanese defense initiatives with Southeast Asian countries in the past year, correspond to rising concern in the region over China’s moves in the South China Sea. New developments in regional security relations reflect a revision of Japanese defense guidelines and of the US-Japanese alliance, both of which emphasize greater interaction with regional partners. On the economic side, Japan and China are in direct competition for infrastructure projects in Southeast Asia, particularly in Myanmar. This will likely be the case for the next several years as ASEAN seeks to undergird the ASEAN Economic Community with new transportation grids. New developments in regional security relations reflect a revision of Japanese defense guidelines and of the US-Japanese alliance, both of which emphasize greater interaction with regional partners. New guidelines have enabled the Japan Self-Defense Forces to deepen their engagement with Southeast Asian militaries. For several years, the Japanese Coast Guard (JCG) was the primary institution for maritime cooperation in the region. There is still considerable scope for JCG cooperation with its Southeast Asian counterparts, but the Japan Maritime Self-Defense Force appears to be positioned to become the lead agency over time. On the economic side, Japan and China are in direct competition for infrastructure projects in Southeast Asia, particularly in Myanmar. This will likely be the case for the next several years as ASEAN seeks to undergird the ASEAN Economic Community with new transportation grids. Although Japan will enjoy some advantage over China with Vietnam and Malaysia when and if the Trans-Pacific Partnership becomes fully operational, the three countries with the most ambitious infrastructure plans – Myanmar, Thailand, and Indonesia – will not be TPP members for several years, if ever.
Topic:: Diplomacy, International Cooperation, International Trade and Finance, Maritime Commerce, and Conflict
Political Geography:: Japan, China, and Asia

22. The Japan-South Korea Identity Clash: East Asian Security and the United States

Author:: Brad Glosserman and Scott A. Snyder
Publication Date:: 05-2015
Content Type:: Book
Institution:: Columbia University Press
Abstract:: Japan and South Korea are Western-style democracies with open-market economies committed to the rule of law. They are also U.S. allies. Yet despite their shared interests, shared values, and geographic proximity, divergent national identities have driven a wedge between them. Drawing on decades of expertise, Brad Glosserman and Scott Snyder investigate the roots of this split and its ongoing threat to the region and the world. Glosserman and Snyder isolate competing notions of national identity as the main obstacle to a productive partnership between Japan and South Korea. Through public opinion data, interviews, and years of observation, they show how fundamentally incompatible, rapidly changing conceptions of national identity in Japan and South Korea--and not struggles over power or structural issues--have complicated territorial claims and international policy. Despite changes in the governments of both countries and concerted efforts by leading political figures to encourage US-ROK-Japan security cooperation, the Japan-Korea relationship continues to be hobbled by history and its deep imprint on ideas of national identity. This book recommends bold, policy-oriented prescriptions for overcoming problems in Japan-Korea relations and facilitating trilateral cooperation among these three Northeast Asian allies, recognizing the power of the public on issues of foreign policy, international relations, and the prospects for peace in Asia.
Topic:: Foreign Policy, Democratization, International Trade and Finance, International Affairs, and Power Politics
Political Geography:: Japan, East Asia, and South Korea
Publication Identifier:: 9780231539289
Publication Identifier Type:: ISBN

23. US-Japan Relations: Strategic Alignment

Author:: Michael J. Green and Nicholas Szechenyi
Publication Date:: 05-2015
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: Benefiting from a window of political stability, the Abe government continued to focus on the twin pillars of economic strategy and defense policy reform. Bilateral engagement on security, trade, and regional and global issues informed the agenda for the prime minister’s official visit to Washington in late April, the first by a Japanese leader in nine years. Abe also became the first Japanese leader to address a joint session of Congress and relayed the main themes from his summit with President Obama by reflecting on the 70th anniversary of the end of World War II, celebrating the evolution of the US-Japan alliance, and outlining a strategic vision for the future.
Topic:: Security, Diplomacy, International Cooperation, International Trade and Finance, Bilateral Relations, Governance, and Political stability
Political Geography:: Japan, Asia, North America, and United States of America

24. South Korea’s Diplomatic Triangle

Author:: Scott Snyder and See-Won Byun
Publication Date:: 05-2015
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: A theme of South Korean opinion leaders in recent years has been the desire to avoid choosing between Beijing and Washington, but this strategy became more difficult in early 2015, as Seoul had to decide how to deal with issues such as AIIB (Asian Infrastructure and Investment Bank) and THAAD (Terminal High Altitude Area Defense) where Beijing and Washington are on opposing sides. As South Korea weighed these choices, there was a series of high-level Chinese visits to South Korea, including Vice Premier Wang Yang’s to discuss furthering China-ROK economic and cultural cooperation on the foundation of closer political ties and State Councilor and Defense Minister Chang Wanquan to reaffirm opposition to Pyongyang’s nuclear weapons program. On the economic front, China and South Korea are pushing to sign their FTA deal this year, holding the latest trade meeting on April 9. Meanwhile, normalization of regional relations in Northeast Asia moved forward with the resumption of trilateral foreign ministerial talks with Japan on March 21 in Seoul.
Topic:: Defense Policy, Diplomacy, International Trade and Finance, Nuclear Weapons, Military Strategy, and Conflict
Political Geography:: Japan, Asia, South Korea, and North Korea

25. History and Other Alliance Constraints

Author:: Charles McClean and Sheila A. Smith
Publication Date:: 09-2015
Content Type:: Journal Article
Journal:: Comparative Connections
Institution:: Pacific Forum
Abstract:: In the wake of a highly successful April visit by Prime Minister Abe Shinzo to Washington, the US-Japan relationship seemed poised for a celebration of success in revamping the alliance. Two focal points of alliance policymakers were the Guidelines for US-Japan Defense Cooperation and the Trans-Pacific Partnership (TPP). But over the summer, both of these initiatives came under political scrutiny. Beyond alliance priorities, the US and Japan faced additional dilemmas in how to deal with a more assertive and sensitive China. Artificial island building by China in the South China Sea brought the US and Japan into closer dialogue over regional maritime cooperation. At the end of the summer, the much-anticipated commemorations of the end of World War II in Japan and China brought heightened sensitivity to the region. Beyond bilateral alliance priorities, the US and Japan faced additional dilemmas, both related to dealing with a more assertive and sensitive China. Artificial island building in the Spratlys and a cyber attack on the US Office of Personnel Management rattled US-China relations, which brought the US and Japan into closer dialogue over regional maritime cooperation. Senior Japanese military leaders began to speak publicly about the possibility of a larger Japanese role in the South China Sea. At the end of the summer, the much-anticipated commemorations of the end of World War II in Japan and China brought heightened sensitivity to the region. The Aug. 14 Abe Statement and Xi Jinping’s speech at the national military parade on Sept. 3, the day of Japanese surrender in China, demonstrated the distance between the two neighbors. Each revealed a new revisionist gaze on their war legacy, and it was hard to ignore the undertones of contemporary bilateral tensions in both leaders’ remarks. Abe chose not to travel to China, although he did not announce his decision until just days before.
Topic:: Security, Diplomacy, International Cooperation, International Trade and Finance, Bilateral Relations, and Alliance
Political Geography:: Japan, Asia, North America, and United States of America

26. Japan's New Security Policy: Breaking Away from the Post–War Regime?

Author:: Bart Gaens
Publication Date:: 02-2014
Content Type:: Policy Brief
Institution:: Finnish Institute of International Affairs
Abstract:: China is challenging the regional balance of power in East Asia through a military buildup and an increasingly assertive foreign policy. The US is forced to find the right balance between cooperating with China while benefiting from its economic rise, and countering China's regional reach by carrying out its self-declared "pivot" to Asia in spite of domestic and budgetary constraints. With just over one year in office, Japan's Prime Minister Shinzo Abe has received wide domestic support for his ambitious plans to revive Japan's economy through his threefold policy of Abenomics. At the same time, however, he has implemented a number of significant policies in the defence and security sphere. In response to China's military rise, the Abe administration increased and recalibrated the defence budget. Furthermore, in order to reinforce the alliance with the US, the government approved the creation of a US-style National Security Council, passed a Secrecy Bill, and aims to reverse Japan's self-imposed ban on exercising the right to collective self-defence. Under the banner of "proactive pacifism", the Abe cabinet is seizing the momentum caused by the changing regional power dynamics in order to edge closer towards "breaking away from the postwar regime". A proposed revision of Japan's constitution, unchanged since 1947, symbolizes the ruling Liberal Democratic Party's (LDP) objective to bring about a more autonomous role for Japan both in the security alliance with the US and as an international actor.
Topic:: Security, Foreign Policy, Defense Policy, Arms Control and Proliferation, Economics, and International Trade and Finance
Political Geography:: Japan, China, and Asia

27. Global Trends of Multi-Factor Productivity

Author:: Jeong Yeon Lee
Publication Date:: 03-2014
Content Type:: Policy Brief
Institution:: East-West Center
Abstract:: Multi-factor productivity (MFP) compares the growth of gross domestic product with the growth of combined capital and labor inputs. The growth rate of MFP assumes theoretical significance because it represents the slope of the steady-state growth path, and hence is a major determinant of the long-term growth trend. This paper offers the balanced panel of the estimated growth rates of MFP for 24 OECD countries over 1986-2011. Based on the estimates of MFP growth, a number of notable trends in productivity growth are identified for the entire OECD area as well as three major economies – the United States, the Eurozone and Japan – within the OECD.
Topic:: Economics, Industrial Policy, International Trade and Finance, and Labor Issues
Political Geography:: United States, Japan, and Europe

28. Sustainability of Public Debt in the United States and Japan

Author:: William R. Cline
Publication Date:: 10-2014
Content Type:: Working Paper
Institution:: Peterson Institute for International Economics
Abstract:: This paper applies the probabilistic debt sustainability model developed for the euro area in Cline (2012, 2014) to sovereign debt in the United States and Japan. The results indicate that to avoid further increases in the expected ratio of public debt to GDP over the next decade, average annual primary deficits will need to be reduced by about 0.75 percent of GDP in the United States and by about 3 percent of GDP in Japan from the likely baselines as of mid-2014.
Topic:: Debt, Diplomacy, and International Trade and Finance
Political Geography:: United States, Japan, and East Asia

29. His Excellency Shinzo Abe, Prime Minister of Japan

Publication Date:: 09-2014
Content Type:: Video
Institution:: Columbia University World Leaders Forum
Abstract:: This World Leaders Forum program features an address by His Excellency Shinzo Abe, Prime Minister of Japan, followed by a question and answer session with the audience.
Topic:: Security, Arms Control and Proliferation, International Trade and Finance, and International Affairs
Political Geography:: Japan and East Asia

30. Implementing Structural Reforms in Abenomics: How to Reduce the Cost of Doing Business in Japan

Author:: Jamal Ibrahim Haidar and Takeo Hoshi
Publication Date:: 06-2014
Content Type:: Working Paper
Institution:: Walter H. Shorenstein Asia-Pacific Research Center
Abstract:: Improving the environment for business is an important part of the growth strategy of Abenomics. As the KPI (Key Performance Indicator) for this effort, the Abe Administration aims to improve Japan's rank in the World Bank Doing Business Ranking from the current #15 among high-income OECD countries to one of the top three. This paper clarifies what it takes for Japan to be among top three countries in terms of ease of doing business. By looking at details of the World Bank Doing Business ranking, we identify various reforms that Japan could implement to improve the ranking. Then, we classify the reforms into four groups depending on whether the reform requires legal changes and whether the reform is likely to face strong political resistance. By just doing the reforms that do not require legal changes and are not likely to face strong political opposition, Japan can improve the ranking to 9th. To be in the top 3, Japan would need to implement all the reforms except for those that require changing the laws and are likely to face strong political resistance, even under the unrealistic assumption that the other countries do not reduce the cost of doing business. Thus, in order to be one of the top three countries among OECD countries in terms of ease of doing business, Japan would most likely need to carry out all the reforms identified in this paper.
Topic:: Economics, International Trade and Finance, and Reform
Political Geography:: Japan

31. Estimates of Fundamental Equilibrium Exchange Rates, November 2014

Author:: William R. Cline
Publication Date:: 11-2014
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: This semiannual review finds that most of the major international currencies, including the US dollar, euro, Japanese yen, UK pound sterling, and Chinese renminbi, remain close to their fundamental equilibrium exchange rates (FEERs). The new estimates find this result despite numerous significant exchange rate movements associated with increased volatility in international financial markets at the beginning of the fourth quarter of 2014, and despite a major reduction in the price of oil. The principal cases of exchange rate misalignment continue to be the undervalued currencies of Singapore, Taiwan, and to a lesser extent Sweden and Switzerland, and the overvalued currencies of Turkey, New Zealand, South Africa, and to a lesser extent Australia and Brazil. Even so, the medium-term current account deficit for the United States is already at the outer limit in the FEERs methodology (3 percent of GDP), and if the combination of intensified quantitative easing in Japan and the euro area with the end to quantitative easing in the United States were to cause sizable further appreciation of the dollar, an excessive US imbalance could begin to emerge.
Topic:: Economics, Foreign Exchange, International Trade and Finance, and Monetary Policy
Political Geography:: Africa, United States, Japan, Turkey, South Africa, Brazil, and New Zealand

32. The State-owned Enterprises Issue in China's Prospective Trade Negotiations

Author:: John Whalley and Hejing Chen
Publication Date:: 10-2014
Content Type:: Working Paper
Institution:: Centre for International Governance Innovation
Abstract:: China, in the next few years, faces the prospect of major regional and bilateral trade negotiations possibly including the Trans-Pacific Partnership (TPP), the Regional Comprehensive Economic Partnership with the Association of Southeast Asian Nations (ASEAN) and Japan, Korea, India, Australia and New Zealand and separate negotiations with India, Korea and Japan, potentially the United States and even possibly the European Union. A likely key element in such negotiations, and one already raised by the United States in the TPP negotiations, is that of trade arrangements involving state-owned enterprises (SOEs). China is viewed from outside as having a large SOE sector, and large SOEs are viewed as having a protected monopoly position in domestic Chinese markets.
Topic:: International Trade and Finance, Markets, and World Trade Organization
Political Geography:: Japan, China, Europe, India, Asia, Australia, and Korea

33. Stabilizing Properties of Flexible Exchange Rates: Evidence from the Global Financial Crisis

Author:: Joseph E. Gagnon
Publication Date:: 11-2013
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: There is a long-standing debate among economists and policymakers on the benefits of flexible versus fixed exchange rates (Klein and Shambaugh 2010). In principle, flexible exchange rates allow a country's central bank to focus on stabilizing economic growth and inflation, which are the ultimate goals of monetary policy. However, some argue that in practice central banks often do not use their powers wisely and it may be better to restrict their freedom by requiring them to peg their currency to that of an important trading partner. Others note that flexible exchange rates are far more volatile than fundamental factors can explain (Flood and Rose 1995), raising the possibility that they may introduce wasteful cross-sectoral fluctuations in economic activity. One common viewpoint is that flexible exchange rates may be fine for large countries but that the smallest countries are better off with fixed exchange rates (Åslund 2010).
Topic:: Economics, Foreign Exchange, International Trade and Finance, Markets, and Financial Crisis
Political Geography:: United States, Japan, China, and United Kingdom

34. NATO Global Partnerships: Strategic Opportunities and Imperatives in a Globalized World

Author:: Franklin D. Kramer
Publication Date:: 03-2013
Content Type:: Working Paper
Institution:: Atlantic Council
Abstract:: International security in today's globalized world demands a framework responsive to interconnectedness, multiple power centers, shared vulnerabilities, and dramatic change. To meet these diverse challenges that affect the security of its members, NATO, as the West's premier security organization, must reach beyond the transatlantic arena. It must link with other nations whose world views are comparable and whose capacities complement NATO's strengths. NATO's global partnerships are critical elements in providing an effective international security framework and, therefore, are a vital key to generating a stable and secure international system.
Topic:: NATO, Globalization, International Trade and Finance, and International Security
Political Geography:: Japan, Europe, South Korea, Libya, and Australia

35. Launching the third arrow of Abenomics

Publication Date:: 06-2013
Content Type:: Policy Brief
Institution:: Oxford Economics
Abstract:: Shinzo Abe was elected Prime Minister of Japan last December on a programme intended to end two decades of deflation and lost growth in Japan. His regime, dubbed 'Abenomics', consists of three arrows: a monetary stimulus, a fiscal stimulus and structural reform. The first two are well under way. The third has yet to be fired. But following his party's victory in July's Upper House election, Mr Abe has all the backing he will need – or ever get – to forcefully launch the third arrow of Abenomics. This scenario alert examines the potential upsides for the Japanese economy if Abenomics succeeds. Although the economy will not return to the 4%+ growth rates seen in the 1980s, it could secure growth in the 2-3% range. This would be a major improvement on its dismal performance of less than 1% average real growth a year since 1993.
Topic:: Economics, International Trade and Finance, Markets, Monetary Policy, and Reform
Political Geography:: Japan and Syria

36. Obama's Asia Pivot and the Koreas

Author:: Richard Weitz
Publication Date:: 11-2013
Content Type:: Journal Article
Journal:: International Journal of Korean Studies
Institution:: International Council on Korean Studies
Abstract:: The end of President Barack Obama's first term provides an opportunity to assess what the administration's "strategic rebalancing" toward and within the Asia-Pacific region (sometimes called the "Asian Pivot" or "Back to Asia" policy) has accomplished as well as what challenges and unmet opportunities remain. The administration has launched several successful multinational diplomatic initiatives in the region to supplement U.S. bilateral ties with key Asian partners; relations with ASEAN have clearly improved. The economic dimension of the Pivot has made progress as seen by the growth of support for the Trans-Pacific Partnership. U.S. efforts to promote democracy and human rights in Asia have proved far less successful, except perhaps for Myanmar, where the political transition remains a work in progress. The U.S. military has managed to establish a broader presence in the region, especially in Australia and Southeast Asia. U.S. officials have sought to impart new energy into the five existing formal U.S. bilateral defense alliances in Asia--with Australia, Japan, the Philippines, Thailand, and South Korea. But the main problem with the pivot has been the inability to overcome Chinese anxiety about U.S. rebalancing, which has complicated their cooperation over North Korea and other issues. Fortunately, relations between the United States and South Korea are also strong. The ROK is becoming an important U.S. partner in several dimensions of the Pivot, though ROK-U.S. differences over North Korea might emerge with the advent of a new government in Seoul.
Topic:: International Trade and Finance and Foreign Direct Investment
Political Geography:: Japan, China, Asia, Australia, and Thailand

37. The Role of Europe in Enhancing Cooperative Security in Asia and the Pacific: A View from Japan

Author:: Takako Ueta
Publication Date:: 10-2013
Content Type:: Policy Brief
Institution:: EGMONT - The Royal Institute for International Relations
Abstract:: Asia is a prominent export market for Europe while in the East and South China Seas, tensions continue. Europe has searched for its political role in Asia. This policy brief presents an analysis and argues the role of Europe in enhancing cooperative security in Asia and the Pacific, which would promote stability and peace there.
Topic:: Security, Emerging Markets, International Cooperation, and International Trade and Finance
Political Geography:: Japan, Europe, Israel, and Asia

38. The U.S.-Japan Alliance: Anchoring Stability in Asia

Author:: Joseph S. Nye and Richard L. Armitage
Publication Date:: 08-2012
Content Type:: Working Paper
Institution:: Center for Strategic and International Studies
Abstract:: This report on the U.S.-Japan alliance comes at a time of drift in the relationship. As leaders in both the United States and Japan face a myriad of other challenges, the health and welfare of one of the world's most important alliances is endangered. Although the arduous efforts of Assistant Secretary of State Kurt Campbell and his colleagues in both governments have largely kept the alliance stable, today's challenges and opportunities in the region and beyond demand more. Together, we face the re-rise of China and its attendant uncertainties, North Korea with its nuclear capabilities and hostile intentions, and the promise of Asia's dynamism. Elsewhere, there are the many challenges of a globalized world and an increasingly complex security environment. A stronger and more equal alliance is required to adequately address these and other great issues of the day.
Topic:: Security, Foreign Policy, Diplomacy, International Trade and Finance, and Bilateral Relations
Political Geography:: United States, Japan, China, Israel, Asia, and North Korea

39. The Politics of Contestation in Asia: How Japan and Pakistan Deal with their Rising Neighbors

Author:: Daniel Flemes, Georg Strüver, and Hannes Ebert
Publication Date:: 09-2012
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: Rising powers have attracted tremendous interest in international politics and theory. Yet the ways in which secondary powers strategically respond to regional changes in the distribution of power have been largely neglected. This article seeks to fill this gap by presenting a systematic comparative analysis of the different types of and causes of contestation strategies undertaken by secondary powers. Empirically, it focuses on two contentious regional dyads in East and South Asia, exploring how structural, behavioral, and historical factors shape the way in which Japan and Pakistan respond, respectively, to China's and India's regional power politics. The paper concludes that the explanatory power of these factors depends on the particular context: in the case of Japan, China's militarily assertive regional role has invoked the most significant strategic shifts, while in the case of Pakistani contestation, shifts in polarity have had the largest impact on the strategic approach.
Topic:: Foreign Policy, Arms Control and Proliferation, Development, Emerging Markets, and International Trade and Finance
Political Geography:: Pakistan, Japan, China, and India

40. Japan Post: Anti-Reform Law Clouds Japan's Entry to the Trans-Pacific Partnership

Author:: Gary Clyde Hufbauer and Julia Muir
Publication Date:: 05-2012
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Our last policy brief on this long-running saga recounted political machinations, late in 2011, to reverse the Koizumi era reforms of Japan Post, a giant among state-owned enterprises (SOEs). As a brief background: Japan Post is a conglomerate of five companies: the parent, Japan Post Holdings; two subsidiaries concerned with operating post offices and delivering mail, namely Japan Post Network and Japan Post Services; and two giant financial arms, Japan Post Bank and Japan Post Insurance.
Topic:: Economics, International Trade and Finance, Treaties and Agreements, and Law
Political Geography:: Japan and Israel

41. Another Shot at Protection by Stealth: Using the Tax Law to Penalize Foreign Insurance Companies

Author:: Gary Clyde Hufbauer
Publication Date:: 01-2012
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: The United States suffers from a severe self-inflicted wound. Together, federal and state governments impose almost the highest corporate tax rate found among advanced countries, 39 percent. Only Japan is fractionally higher. The high US rate has adverse consequences—lost investment, lost jobs, and less innovation—and goes a long way to explain slipping US competitiveness in the world economy.
Topic:: Economics, Industrial Policy, International Trade and Finance, and Markets
Political Geography:: United States and Japan

42. Japan Post: Retreat or Advance?

Author:: Gary Clyde Hufbauer and Julia Muir
Publication Date:: 01-2012
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: Legislation to reform Japan Post is again gathering steam in Tokyo. The real question is whether the latest act in this long- running drama will represent true reform or in fact will camouflage an entrenchment of Japan Post's formidable monopoly powers. Antireform proposals being lined up for consideration in the Diet would indefinitely extend effective government control of Japan Post's financial arms (thereby reversing the Koizumi era reforms). On the other hand, reform forces in the Japanese government want new legislation to guarantee a level playing field in banking and insurance between Japan Post and private firms, whether domestic or foreign.
Topic:: Economics, Government, International Trade and Finance, and Natural Disasters
Political Geography:: Japan and Israel

43. The Trans-Pacific Partnership Agreement (TPP) Negotiations: Overview and Prospects

Author:: Deborah Elms and C. L. Lim
Publication Date:: 02-2012
Content Type:: Working Paper
Institution:: Centre for Non-Traditional Security Studies, S. Rajaratnam School of International Studies
Abstract:: The Trans-Pacific Partnership (TPP) is a trade agreement currently under negotiation between nine countries in three continents, including Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, United States and Vietnam. In late 2011 three additional countries--Japan, Canada and Mexico--announced their intention to join as well. The TPP has always been called a "high quality, 21st century" agreement that covers a range of topics not always found in free trade agreements. This includes not just trade in goods, services and investment, but also intellectual property rights, government procurement, labor, environment, regulations, and small and medium enterprises. This paper traces the complex negotiations and evolution of the talks since the early 2000s to the present.
Topic:: Economics, Environment, International Trade and Finance, Treaties and Agreements, Labor Issues, and Intellectual Property/Copyright
Political Geography:: United States, Japan, Malaysia, Canada, Israel, Vietnam, Latin America, Australia, Australia/Pacific, Mexico, Singapore, Chile, Peru, New Zealand, and Brunei

44. Rising Tensions Over China's Monopoly on Rare Earths?

Author:: Jane Nakano
Publication Date:: 05-2012
Content Type:: Policy Brief
Institution:: East-West Center
Abstract:: The United States, Japan, and the European Union—the three key consumers of Chinese rare earth materials—formally complained to the World Trade Organization (WTO) in March about Chinese restrictions on its rare earth exports. Several weeks later, China announced the establishment of a 150-plus member association with the official aim of promoting sustainable development within this sector. Some analysts wonder if this is part of a Chinese plan to circumvent international complaints by instituting an oligopolistic arrangement to control its rare earth exports. Others ask if this could be another step in an escalating dispute with China over the global supply of rare earth materials.
Topic:: International Relations, Development, International Trade and Finance, Markets, and Natural Resources
Political Geography:: United States, Japan, China, and Europe

45. The G20: Engine of Asian Regionalism?

Author:: Hugo Dobson
Publication Date:: 11-2011
Content Type:: Working Paper
Institution:: German Institute of Global and Area Studies
Abstract:: As a result of the emergence of the G20 as the self‐appointed “premier forum for international economic cooperation”, Asia's expanded participation in G‐summitry has attracted considerable attention. As original G7 member Japan is joined by Australia, China, Indonesia, India and South Korea, this has given rise to another alphanumeric configuration of the Asian 6 (A6). Resulting expectations are that membership in the G20 will impact Asian regionalism as the A6 are forced into coordination and cooperation in response to the G20's agenda and commitments. However, by highlighting the concrete behaviours and motivations of the individual A6 in the G20 summits so far, this paper stands in contrast to the majority of the predominantly normative extant literature. It highlights divergent agendas amongst the A6 as regards the future of the G20 and discusses the high degree of competition over their identities and roles therein. This divergence and competition can be seen across a range of other behaviours including responding to the norm of internationalism in promoting global governance and maintaining the status quo and national interest, in addition to claiming a regional leadership role and managing bilateral relationships with the US.
Topic:: Economics, Emerging Markets, Globalization, International Trade and Finance, Regional Cooperation, and Governance
Political Geography:: United States, Japan, China, Indonesia, India, Asia, South Korea, and Australia

46. Getting Surplus Countries to Adjust

Author:: John Williamson
Publication Date:: 01-2011
Content Type:: Policy Brief
Institution:: Peterson Institute for International Economics
Abstract:: The world has witnessed two distinct attempts to build a multilateral mechanism to discipline surplus countries that declined to adjust their surpluses, and several proposals are currently on the table to do the same. On the two previous occasions the major surplus country of the day defeated attempts to create such a mechanism, and today China (not to mention Japan or Germany) exhibits no enthusiasm for the idea. Despite the importance of the issue, there has been remarkably little discussion of these proposals.
Topic:: Economics, International Trade and Finance, International Monetary Fund, and Monetary Policy
Political Geography:: Japan, China, and Germany

47. Leading Without Followers: How Politics and Market Dynamics Trapped Innovations in Japan's Domestic "Galapagos" ICT Sector

Author:: Kenji E. Kushida
Publication Date:: 03-2011
Content Type:: Working Paper
Institution:: Berkeley Roundtable on the International Economy
Abstract:: Despite global leadership by Japanese firms in sectors such as automobiles, precision equipment, and various high tech components, Japanese firms in the telecommunications sector have followed a persistent pattern of leading without followers. While leading the domestic market to ever-high levels of sophistication, sometimes beyond that of most other advanced industrial countries, Japanese ICT companies have retreated dramatically from international telecommunications-related markets. Moreover, in technology after technology, Japanese ICT firms invest heavily, undertake extensive R, and for network technologies, deploy infrastructure rapidly, only to find that global technological trajectories shift in a different direction. While globally successful Japanese industries were able to use their domestic market as a springboard into international markets, Japan's telecommunications sector became decoupled from global markets, trapping Japanese firms in the domestic market.
Topic:: Globalization, Industrial Policy, and International Trade and Finance
Political Geography:: Japan and Israel

48. Are the advanced economies facing a lost decade?

Publication Date:: 07-2011
Content Type:: Policy Brief
Institution:: Oxford Economics
Abstract:: Recent weeks have seen a slew of weaker-than-expected data releases from the major economies, raising doubts about whether the expansion in the developed nations is sustainable. One reason for the apparent loss of momentum has been the moderation of growth in the emerging markets, as central banks have tightened monetary policy in response to rising inflation. The weakening trend in growth indicators can also be linked to temporary adverse factors, including supply chain disruptions form the Japanese earthquake and tsunami, as well as the sharp rise in oil prices earlier this year.
Topic:: Economics, Globalization, International Trade and Finance, and Financial Crisis
Political Geography:: Japan

49. From the FDI Triad to multiple FDI poles?

Author:: Karl P. Sauvant and Persephone Economou
Publication Date:: 07-2011
Content Type:: Policy Brief
Institution:: Columbia Center on Sustainable Investment
Abstract:: Twenty years ago, in the inaugural issue of the World Investment Report, the United Nations highlighted a shift in the global pattern of foreign direct investment (FDI) from bipolar, dominated by the United States and the European Community, to tri-polar (the FDI Triad), dominated by the European Community, the United States and Japan.
Topic:: Economics, International Trade and Finance, United Nations, and Foreign Direct Investment
Political Geography:: United States, Japan, and Europe

50. Security developments in East Asia: what implications for the EU?

Author:: Nicola Casarini
Publication Date:: 02-2011
Content Type:: Policy Brief
Institution:: European Union Institute for Security Studies
Abstract:: East Asia is home to some of the most important trading partners of the Union. China is foremost among these, ranking second only to the US - in 2009, EU-China trade totalled a massive €296 billion - while the EU is China's most important trading partner. Japan is the sixth-largest trade partner of the EU - in 2009, EU-Japan trade was almost €92 billion. South Korea is the EU's eighth-largest trade partner and the EU has become South Korea's second largest export destination - total trade in 2009 was above €53 billion. Furthermore, on 6 October 2010 the EU and South Korea signed a Free Trade Agreement (FTA) which is the most ambitious bilateral trade agreement ever negotiated by the EU, and the first with an Asian country.
Topic:: International Trade and Finance
Political Geography:: Japan, China, Europe, Israel, Asia, and South Korea

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COLUMBIA UNIVERSITY PRESS