East Asian Economic Integration
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East Asian Economic Integration

Law, Trade and Finance

Edited by Ross P. Buckley, Richard Weixing Hu and Douglas W. Arner

This book analyses recent developments and likely future paths for trade and financial integration in East Asia. It suggests a more coherent, balanced way forward for regional economic integration and analyses implications for institution building in East Asia.
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Chapter 4: Japan’s FTA (EPA) and BIT Strategy in the Light of Competitive Dynamics

Junji Nakagawa


Junji Nakagawa JAPAN’S POLICY SHIFT TOWARD FTAS (EPAS) AND BITS: WHY AND HOW? In the early 2000s, Japan finally caught up with the global boom of free trade agreements (FTAs) and bilateral investment treaties (BITs). The rest of the world had begun to actively look at FTAs as a means of promoting trade liberalization in the early 1990s, when multilateral trade negotiations under the GATT were making little progress. Interest in FTAs increased even after the establishment of the WTO in 1995, especially after the Doha Development Agenda entered into deadlock. Indeed, the cumulative number of FTAs notified to the GATT/WTO since 1949 increased from 86 in 1990 to 165 in 1995, to 251 in 2000, and further to 457 in October 2009.1 The number of BITs has also been increasing since the 1990s, and rose to 2676 at the end of 2008.2 Japan had long preferred multilateral trade liberalization to preferential trade arrangements. It criticized FTAs as discriminatory against nonparties and detrimental to the GATT/WTO-based multilateral trading system from which it had substantially benefited during its post-war growth. However, it finally made a policy shift toward preferential trade arrangements in the early 2000s. Japan signed its first Economic Partnership Agreement (EPA) with Singapore in January 2002,3 and it has since concluded EPAs with Mexico (2004), Malaysia (2005), 1 WTO, Regional Trade Agreements, Facts and Figures, accessed 2 September 2010, http://www.wto.org/english/tratop_e/region_e/regfac_e.htm. 2 UNCTAD, World Investment Report (Geneva: UNCTAD, 2009), 32. 3 The text of this...

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