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The role and shape of international trade agreements is changing. No longer simple devices for easing the movement of goods across borders, they are becoming both an instrument of integrated economic regulation at the supranational level and a tool of international relations within the emerging global economic order. The recently expanded scope of negotiations over the Trans-Pacific Partnership (“TPP”) serves as a case in point, one that focuses both on the trilateral relations between Japan, the United States, and China, and on the form of competition for control of the language of supranational economic regulation. The focus of this Article is on the decision by Japan to join the U.S.-led negotiations for a Trans-Pacific Partnership, even as it pushes ahead with a Free Trade Agreement with China and Korea. This decision represents a critical new aspect of Japanese trade relationships that is likely to have significant economic and geopolitical effects. I will first describe the TPP from its genesis as an effort by Brunei, Chile, New Zealand, and Singapore to better integrate their economic relationships into current efforts to create a powerful free trade area of the Pacific that excludes China. I will then elaborate on the central strategic considerations that follow from this important decision in the relationships between Japan, the United States, and China, with emphasis on the way in which this affects contests for control of international rulemaking within the structures of economic globalization. For Japan, the TPP may represent a means to use a necessary containment of its own policy autonomy within complex networks of multilateral arrangements to protect its sizeable investment in China, at least temporarily, and to permit it to leverage its power to influence global trade rules. For the United States, the TPP presents an opportunity to leverage power as well, by creating an alternative to the World Trade Organization (“WTO”) for moving trade talks forward in ways that serve U.S. governance interests more comprehensively. For China, the TPP represents an additional layer of containment, meant to constrain its economic power and to limit the value of the country’s form of state capitalism. The TPP represents the next wave of plurilateral comprehensive agreements that will shape the framework of global economic governance. It also suggests the growing importance of international agreements as the space within which the structures of economic regulation will be determined, to the detriment of state power. Within these structures, the TPP also reaffirms that Japan stands uncomfortably close to the fissure that separates the United States from Chinese interests, and must continue to rely on the internationalization of rulemaking to protect its interests. An independent path for Japan is unlikely to be an option worth considering.
International trade agreements were once the province of politics and only incidentally of interest to lawyers. These instruments have now evolved into increasingly important sources of rulemaking affecting both domestic and international legal orders. To that end, they are no longer treated as simple devices for easing the movement of goods across borders. Instead, trade agreements are increasingly considered instruments of integrated economic regulation at the supranational level and a tool of international relations within the emerging global economic order.
The recently expanded scope of negotiations over the Trans-Pacific Partnership (TPP) serves as a case in point—one that focuses both on the trilateral relations between Japan, the United States, and China, and on the form of competition for control of the language of supranational economic regulation. The relationship between Japan and China remains complex and antagonistically competitive. History both joins and divides them. The specter of the century before 1949 in their relations continues to affect elite and popular perceptions in ways that sometimes drive policy and culture. The October 2012 anti-Japanese riots in China were the first significant expressions of anti-Japanese popular opinion since 2005. The riots demonstrated the way in which passions, both managed and unmanaged, can be inflamed. Indeed, popular sentiment has become a critical factor driving those relations. The Japanese have not been passive either. After the October riots the Japanese press countered with the suggestion of a mass pull out of Japanese investment in China.
Currently, that cooperative and sometimes antagonistic relationship is making itself felt in two important respects. The first is in territorial claims of the two states, especially with respect to the Senkaku Islands (known to the Chinese as the Diaoyu Islands). The second, to some extent tied to the first, are the efforts to control or at least influence the structures of trade in the Pacific region, efforts pushed into high gear with the election of Prime Minister Shinzo Abe. The two are linked from the Japanese and Chinese perspectives. In an editorial published for English-speaking readers in the People’s Daily in January 2013, Chinese authorities made it clear that they view Japanese economic and diplomatic policies as aimed potentially to further a strategy of encircling and containing Chinese economic ambitions and territorial claims.
Indeed, Shinzo Abe himself has described Japan’s policies so as to corroborate these concerns. During an address to the Center for Strategic and International Studies (“CSIS”) on February 22, 2013, Prime Minister Abe explained where he thought Japan should stand in the future by referencing three principal tasks it faced:
Firstly, when the Asia-Pacific or the Indo-Pacific region becomes more and more prosperous, Japan must remain a leading promoter of rules. By rules, I mean those for trade, investment, intellectual property, labor, environment and the like. Secondly, Japan must continue to be a guardian of the global commons, like the maritime commons, open enough to benefit everyone. Japan's aspirations being such, thirdly, Japan must work even more closely with the United States, Korea, Australia and other like-minded democracies throughout the region.
According to the Prime Minister, the most effective use of Japanese power was on rules promotion, guardianship of open seas and other global common spaces, and for Japan to serve as an active partner of democratic states in the Pacific region. This approach to successful assertion of Japanese power was echoed recently by Foreign Affairs Minister Fumio Kishida’s speech to the 183rd Session of the Diet in which he identified the three pillars of Japanese foreign policy as “strengthening the Japan-U.S. Alliance, deepening our cooperative relations with neighboring countries, and strengthening economic diplomacy as a means to promoting the revitalization of the Japanese economy.”
Japan is pushing ahead with a Free Trade Agreement with China and Korea, but has also decided to join the U.S.-led negotiations for a Trans-Pacific Partnership (“TPP”). This decision presents a new aspect of Japanese trade relationships that is likely to have significant economic and geopolitical effects. I will first describe the TPP from its genesis as an effort by Brunei, Chile, New Zealand, and Singapore to better integrate their economic relationships into current efforts to create a powerful free trade area of the Pacific that excludes China. I will then suggest some important strategic considerations that may follow from this important decision in the relationships between Japan, the United States, and China, with emphasis on the way in which this affects contests for control of international rulemaking within the structures of economic globalization.. See, e.g., Joost Pauwelyn, The Transformation of World Trade, 104 Mich. L. Rev. 1, 6 (2005) (evolution of trade agreements from essentially political to more regulatory); Patrick Specht, The Dispute Settlement Systems of WTO and NAFTA—Analysis and Comparison, 27 Ga. J. Int’l & Comp. L. 57 (1998).
. See, e.g., Stephen Joseph Powell & Ludmila Mendonça Lopes Ribeiro, Managing The Rule Of Law In The Americas: An Empirical Portrait Of The Effects Of 15 Years Of WTO, Mercosul, And NAFTA Dispute Resolution On Civil Society In Latin America, 42 U. Miami Inter-Am. L. Rev. 197, 198 (2011) (trade dispute settlement contributes to the management and perfection of the rule of law in support of democratic governance for civil societies in Latin America).
. For current thinking in the popular press, see, e.g., Gideon Rachman, The Shadow of 1914 Falls Over the Pacific, Fin. Times (Feb. 4, 2013), (“US is concerned that the new Japanese cabinet is full of hardline nationalists, who are more inclined to confront China. Shinzo Abe, the new Japanese prime minister, is the grandson of a wartime cabinet minister and rejects the ‘apology diplomacy,’ through which Japan tried to atone for the war. . . . The Chinese military is also increasingly influential in shaping foreign policy.”) .
. See, e.g., Richard C. Bush, The Perils of Proximity: China-Japan Security Relations (2010).
. See, e.g., Richard J. Samuels, Securing Japan: Tokyo’s Grand Strategy and the Future of East Asia (2011); John Dewey, China, Japan and the U.S.A.: Present Conditions in the Far East and their Bearing on the Washington Conference (1921).
. Rattling the Supply Chains, Economist (Oct. 20, 2012), http://www.economist.com/news/ business/21564891-businesses-struggle-contain-fallout-diplomatic-crisis.
. Nozomu Hayashi, the Beijing Bureau correspondent for the Asahi Shimbun noted:Small anti-Japan rallies, which started near the Japanese Embassy in Beijing and elsewhere, spread to many places across the country toward the weekend. CCTV kept fanning anti-Japanese sentiments.Nozomu Hayashi, @Beijing: Why Have China’s Anti-Japan Sentiments Heightened?, Asahi Shimbun (Oct. 25, 2012).
A retired official from China’s Foreign Ministry said that anti-Japan rallies, which he said was ignited by Japan’s actions, were not the same as those in the past.
“If the Chinese government stopped the Hong Kong activists, the people’s criticism would have quickly turned toward the central government,” the former official said. “Anti-Japan sentiments, which began after (Tokyo Governor Shintaro) Ishihara’s announcement of a plan to purchase the islands, reached a different level from those in the past.”
. Rattling the Supply Chains, supra note 6.
. Editorial, Encircling China Just Japan’s Wishful Thinking, People’s Daily Online (Jan. 17, 2013), The editorial stated:The Japanese media have described the Abe administration’s diplomatic moves as new attempts to contain and encircle China.Id.
It is fine if Japan’s “strategic diplomacy” is simply aimed at improving its relations with the above countries, promoting its foreign trade and investment, creating favorable external conditions for domestic economic recovery, and enhancing its international status and clout.
Japan will be disappointed if it really hopes to work with the above countries to contain, isolate, and encircle China through “strategic diplomacy,” and gain a strategic advantage over China in the dispute over the Diaoyu Islands.
. Shinzo Abe, Japan is Back, Speech to the Center for Strategic and International Studies (CSIS) (Feb. 22, 2013) (transcript available at http://www.mofa.go.jp/announce/pm/abe/us_ 20130222en.html).
. Fumio Kishida, Foreign Policy Speech by Minister for Foreign Affairs Fumio Kishida to the 183rd Session of the Diet (February 28, 2013), (transcript available at http://www.mofa.go.jp/ announce/fm/kishida/speech_130228.html).
. See, e.g., Joint Declaration on the Enhancement of Trilateral Comprehensive Cooperative Partnership, China-S. Kor.-Japan, May 13, 2012, ; Press Release, Japan Ministry of Foreign Affairs, Preparatory Meetings for the Negotiation of a Free Trade Agreement (FTA) among Japan, China and the ROK (Feb. 21 2013).
. See, e.g., Joshua Meltzer, Japan Joins the Trans Pacific Partnership—Finally!, Brookings Inst. (Mar. 18, 2013).