Trade imbalance, trade frictions and maintaining a liberal trade regime in the Asia‐Pacific: Recent trends in Japanese trade policies

Abstract

This paper reviews the recent trend of Japan's trade policies. The issue of current account and trade account surplus, which has been at the center of trade conflicts Japan faced since the 1980s, will recede gradually, reflecting the aging of the Japanese population and an accompanying fall in saving rate. The Japanese government is now changing its trade negotiation stance from discretionary bilateral negotiation to rule‐based actions. This change is reflected in more active use of the WTO panel rule and the changing stance of the government to anti‐dumping issues. One can also observe a drastic change in the negotiation style in such areas as semiconductors and automobiles. In the area of services, however, bilateral negotiation still plays an important role. In service sectors increasing international competition forces the Japanese government to deregulate the domestic market unilaterally, and this liberalization is changing the competitive conditions in the Japanese market. This basic trend in trade policies is not affected much by the current financial crisis and the entailing changes in the general economic conditions in Japan and other parts of Asia.