Abstract
Introduction To most observers, Japan and Mexico seem distant economic partners, with only a modest volume of bilateral' trade and foreign direct investment and a large geographical and cultural gulf between them. By this account, the Japanese decision to negotiate with Mexico is puzzling if not downright nonsensical. Why would Japan invest so much political capital in the negotiation of a complex free trade agreement (FTA) with a nation accounting for such a minuscule share of its international economic exchange?1 We challenge this interpretation of Japan's second FTA ever and demonstrate that far from irrational or insignificant, the stakes involved in the Japan-Mexico FTA were very high. This cross-regional initiative stands to exert powerful influence over the future evolution of Japan's turn towards economic regionalism.2 For a number of Japanese industries (automobiles, electronics, and government procurement contractors) , negotiating with Mexico was essential to level the playing field vis-a-vis their American and European rivals already with preferential access to the Mexican market based on their FTAs. For the Japanese trade bureaucrats, housed in the Ministry of Economy, Trade and Industry (METI), the stakes of the trade agreement with Mexico were also very high; not only would it enable Japan to use bilateral trade deals as an instrument to counter trade diversion abroad, but it would also be crucial in setting precedents on negotiation modalities regarding issues such as service liberalization or rules of origin (ROO). In addition, it would be all-important in helping the ministry tip the domestic balance in
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
