Japan and the Asia‑Pacific:Changes in the Policies of Benign Neglect

Abstract

In recent years, the growth of protectionist sentiments has led to serious doubts as to the future viability of the post-war liberal trading system. Rising protectionist sentiment appears ready to unravel the code of conduct that, in the past, allowed for a steady growth in world trade. Concern for the future is grounded on the belief that if protectionism was left unchecked, not only would international trade suffer but competing blocs would, as in the 1930s, generate hostility and conflict with disastrous consequences. The present crisis and the potentially grim prospect for the future calls for an analysis on how the trading system might be restructured to ensure its continued stability. In particular, this paper will focus on the Japanese role in maintaining system stability, considering that Japan was a principal benefi ciary of the liberal trading order. To do so, however, requires an understanding of the essentials of system stability and below, a brief outline of the main argu ments is presented before proceeding with the substantive analysis of the Japanese role within the system. Within the disciplines of international politics, the notion of system stability has been looked at from two different perspectives. For many political realists, the protectionist crisis was essentially a crisis of leadership. Borrowing on Charles Kindleberger's analysis of the Great Depression of the 1930s, they argued that the viability of a liberal trading system depended on effective leadership provided by a political and military hegemon. In the absence of leadership, it was considered not unlikely that the system would gravitate towards overtly protectionist, beggar thy neighbour, trade policies. Kindleberger, accordingly, attributed the Great Depression to the unwillingness of the hegemon, the United States, to assume leadership in the inter-war years of British decline. The result was that, while all states promised to eschew protectionism, they, inevitably, became locked into a cycle of spiralling trade barriers. Kindleberger's analysis suggested that, had the United States displayed more responsibility, the outcome of world events might have been less cruel. Leadership, however, is not an altruistic principle but, rather, based on self interest. Since the hegemon possessed the strongest economy it stood to reason that it would be the main beneficiary of a trading regime that allowed it to com pete effectively in export markets. This could be expected in the ideal world of free trade but, given the reality of states at different levels of economic development, 253