elaborate some discussion questions to ask in class (from student to professor) about the following lecture:

10 Japan’s multilateralism in Asia
Tina Burrett
Interaction and integration with regional institutions is central to Japan’s for¬eign policy. Since the 1950s, Japan has pursued multilateralism to achieve its external economic and political aims, with varying degrees of success. Postwar Japan has initiated more than 30 regionalist projects—including Asia-Pacific Economic Cooperation (APEC) and the Asian Development Bank (ADB)— and bankrolled many others. This chapter argues that multiple factors collide to compel and constrain Japan’s multilateralism, with factors such as the US-Japan security alliance simultaneously inducing and impeding regional integration. It concludes that Japan’s regionalist policies have better served its economic interests than its political agenda. In part, Japan’s regionalist strategies have been constrained by political dynamics beyond its control. But a lack of vision and initiative from Japanese policymakers has also contributed to Japan’s lim¬ited success in using regional institutions to meet its political goals.
In the early postwar period, Japanese policymakers embraced multilateral-ism to rehabilitate Japan’s image among neighbors who had suffered under its imperial rule in the first half of the twentieth century. Japan’s quietly proactive regionalism included projects such as the Asian Development Fund proposal in 1957 and the establishment of the Ministerial Conference for Economic Development in Southeast Asia in 1966 (Anderson 1993; Johnson 1993). But Japan faces competition from other regional powers in framing Asian institu¬tionalism. Whether Japan’s interests are best served by isolating or including China and the US in regional frameworks is a perennial dilemma for Japanese policymakers (Hamanaka 2010; Rathus 2011). Invariably, excluding Beijing and Washington from regional networks enhances Tokyo’s opportunity to lead, but often at the expense of institutional efficiency and scope. When pur¬suing regional agreements to mitigate military threats, Japan has no option but to include the US, its only full ally. But when the aim is to enhance Japan’s economic position, engagement with Washington is not always welcome.
Until the 1990s, Japan’s regionalist policies were limited by Cold War poli-tics. Following the collapse of the Soviet Union, Japan seized the opportu¬nity to deepen regional ties with less deference to preferences in Washington. China’s rise to economic and military power, however, quickly undermined Japan’s willingness to exclude the US from regional frameworks. Beijing’s new
 
132 Tina Burrett
diplomatic muscle means Japan can no longer expect to lead in regional forums by excluding Washington. But China’s rise is encouraging other states in the region to turn to Tokyo as a counterbalance to Beijing. As a consequence, Japan is deepening its cooperation with Southeast Asia, India and Australia. But Japanese mutual distrust and rivalry with China undermines broader regional integration. By thwarting China’s attempts to increase its influence in the ADB, Japan contributed to Beijing’s decision to establish the rival Asian Infrastructure Investment Bank (AIIB) in December 2015 (Katada 2016). In other instances, Japan has worked with China, for example in establishing the Chiang Mai Initiative (CMI) that was created in 2000 to facilitate region-wide bilateral currency swaps. Until the 1990s, Japan’s Ministry of Foreign Affairs (MOFA) pursued a pro-China foreign policy with broad public and political support. But from 2000, a generational change in domestic politics, coincid¬ing with China’s growing strength, has fueled Japanese nationalism and suspi¬cion of Beijing. Security concerns over Chinese assertiveness in its territorial disputes is pushing Japan to again accept a greater role for the US in regional arrangements.
This chapter charts the evolution of Japan’s regionalism since the 1990s. It particular, it analyzes how Japan’s complex and often-contradictory relations with China and the US simultaneously incentivize and impede its pursuit of regional integration. The chapter begins by addressing definitions of regional¬ism before moving on to discuss theoretical considerations. It argues that no single theory of international relations adequately explains Japan’s regionalist policies, which are best analyzed through multiple frames. The chapter next examines the early years of Japan’s regional multilateralism, before analyzing developments in its regionalist approach since the 1990s. Discussion includes analysis of Japan’s policy successes and failures across a number of regional trade, financial and political forums.
What is regionalism?
Despite a large body of literature on regionalism, the terms “region” and “regionalism” both lack consensus definitions. The one point on which theo¬rists agree is that regions have limits. Early definitions of regionalism take a region’s geographic boundaries as a given and emphasize the role of the state in forming regional associations (Nye 1968, vii). More contemporary works recognize that regional boundaries are socially constructed. Harris argues “the definition of a region . . . is what the states of the region make of it” (Harris 2000, 498). States determine the boundaries of the region and in so doing deter-mine who may participate in regional institutions. For example, when seeking to establish regional frameworks that did not include the US, Japan invented names such as “West Pacific” or “Pacific Asia” to justify Washington’s exclu¬sion (Hamanaka 2010, 76). The establishment of regional institutions is there¬fore a political process. Regionalism can be defined as a state-led project that reorganizes a particular regional space for specific political and/or economic purposes (Gamble & Payne 1996, 3). Although states lead regional institu¬tions, participants can include non-state actors. In Asia, Taiwan and Hong Kong would be good examples of non-state participants. Regionalism does not identify a definitive “region”, but multiple overlapping regions on the same site, designed for different political and economic functions. This chapter therefore recognizes that the geographic location of Japan’s regional activities shifts depending on the specific project and purpose at hand.
Regional institutions have been set up to perform a variety of tasks: keep¬ing the peace, promoting economic development and removing barriers to trade—to name just a few. Whatever their tasks and fields of activity, regional organizations can be divided into two broad categories depending on the way they perform these tasks. Some organizations are established to provide a forum for negotiations and decisions, others to provide specific services (Cox & Jacobson 1974, 112). This distinction establishes two ideal types: the forum organization and the service organization. Organizations in the former cat¬egory engage in a range of activities, from the exchange of views to negotiat¬ing legally binding instruments. Organizations in the latter category provide states with common or individual services. In reality, many regional organi¬zations fall into both categories. The ADB, for example, provides develop¬ment assistance loans, but it also acts as a forum for participants to discuss development goals. Nevertheless, the distinction between organization types is meaningful, as patterns of decision-making and influence vary between the two categories. In general, service organizations tend to have a larger bureaucracy and greater potential for policy influence. Analysis in this chap¬ter includes both types of organization. Low-profile regional forums should not be ignored as they may later be upgraded (Cox & Jacobson 1974, 114). Establishing a low-profile organization and then extending its functions and membership is often easier than setting up a high-profile organization from the outset. This is often the case with Asian regionalism, with the Association of Southeast Asian Nations (ASEAN) providing a good example (Haas 1989, xvii; Hamanaka 2010, 4). Although not usually defined as regional institu¬tions, this chapter also includes free trade areas (FTAs) and formalized annual meetings to capture the prevalence of gradualism in Asian inter-government collaboration.
Japan’s regional multilateralism and international relations theory
To understand Japan’s regional multilateralism, no one school of international relations theory is sufficiently illuminating (Kang 2003; Rathus 2011). Realism, liberalism and constructivism all have something to add. Following recent trends in international relations scholarship, this chapter eschews any single theoretical framework imposing expectations of what ought to be important. Rather it draws on all three international relations schools to identify the fac¬tors defining Japan’s regionalist policies. As Katzenstein and Okawara argue, “the complex links between power, interest, and norms defy analytical capture by one paradigm” (2001, 154).
Realism, with its emphasis on the state, the pursuit of national survival and self-help, clearly has some explanatory power when applied to Japan’s region-alism. Arguably the most important concept in realism is the balance of power. States form cooperative arrangements to balance against external threats. There is strong evidence of attempts at balancing in Japan’s approach to regional insti¬tution building. Since 2000, Japan has increasingly sought to include the US in regional organizations to balance against China’s growing power. In 2002, responding to China’s proposed FTA with ASEAN, Japanese Prime Minister Koizumi Junichirō announced plans for an East Asian Community to include the US alongside ASEAN, Japan, China, South Korea, Australia and New Zealand (Hamanaka 2010, 71). Balancing theory, however, does not explain why Japan previously sought to exclude the US from the ASEAN framework. If US economic power was perceived as a threat to Japan, cooperation with weak Southeast Asian states does not mitigate this threat.
Japan’s cooperation with ASEAN states is better explained by liberal internationalist theories that stress interdependence as the catalyst for creat¬ing institutions. States with close interactions benefit from institutionalizing their relations, as there are many problems to solve among them. Formalizing cooperation can reduce transaction costs, lessen uncertainty and mitigate exter-nalities (Cooper 1986; Keohane 1984). By the 1990s, Japanese corporations’ extensive trade and investment in Southeast Asia incentivized Tokyo to seek institutional ties with ASEAN to manage common interests and expand shared gains. But if interdependence drives cooperation, why have China and Japan failed to institutionalize their huge bilateral trade, worth $303 billion in 2015 (JETRO 2016)? This is an important question liberal institutionalism does not answer.
Constructivist theories help to explain why China and Japan have been unable to develop cooperative arrangements commensurate with the scale of their economic interdependence. Constructivism differs from realism and liberalism in focusing on ideational factors, such as identity, imagination and nationalism, rather than material explanations for cooperation (Anderson 2006; Terada 2006). Constructivism suggests rivalry and suspicion between China and Japan stems not only from a shift in the regional balance of power towards Beijing, but also from the subjective meaning applied to bilateral relations by actors in both states (Wendt 1995). For constructivists, national identity is the main determinant of national behavior. States conceive of their interests based on interactions with other states over time. Interests and behavior, therefore, emerge through relations with others. State identities determine whether coun¬tries see each other as friends or foes and thus whether or not to cooperate. In recent years, China and Japan have increasingly come to define themselves and their interests in opposition to each other. 

In 2016, 86 percent of Japanese vot¬ers expressed a negative opinion of China, while 81 percent of Chinese citizens reported a negative view of Japan. In both countries, negative views of the other nation have increased since 2006 (Stokes 2016). The inability of Japan and China to see themselves as bound together in a shared future undermines the potential for cooperation between the two in regional institutions. But the absence of a shared regional identity does not preclude cooperative institution building. Competing national identities can compel regionalism as a means to manage and ameliorate bilateral rivalries (Rathus 2011, 31).
Japan’s early regionalism
Scholars widely view Japan as a reluctant regionalist until the 1990s (George Mulgan 2008; Kolmas 2014). They suggest various reasons for Japan’s inertia in institutionalizing relations with its regional neighbors. Most commonly, it is argued that until the end of the Cold War, Japan’s foreign policymaking was constrained by asymmetric bilateral relations with the US, rendering it reactive rather than proactive (Dent 2013; Pempel 2011). Other explanations cite domestic factors, arguing that Japan’s positive economic performance until 1990 disincentivized Japanese producers, consumers and policymakers from innovating external trade and financial relations. Vested interests—inefficient industries and their political allies in the Liberal Democratic Party—are identi¬fied as another domestic obstacle to change (George Mulgan 2008). Schoppa (2006) and Hatch (2010) both convincingly contend that it was to forestall changes to the domestic political economy that Japanese business and bureau¬cratic elites embraced regionalism in the early 1990s. In the face of globaliza¬tion, Japan’s economic elites were able to offset domestic reforms by extending the core characteristics of Japanese capitalism into Southeast and East Asia. As the region’s most developed economy, Japan supplied capital, technology and development assistance to neighboring states, creating an informal regional order, with Japan at its apex (Hatch 2010, 4). But in the late 1990s, with finan¬cial crisis engulfing much of Asia and China rising, Japan was toppled from its position as the region’s economic hegemon.
Kolmas (2014), Dent (2013) and Park (2006) argue that the 1997 Asian financial crisis marks the most significant turning point in Japan’s postwar regionalist policies. Triggered by the collapse of the Thai Baht July 1997, the crisis rapidly escalated into a region-wide and multi-sector financial crash. As the crisis spread across the region, Japanese policymakers came to appreci¬ate the extent of regional economic interdependence and the resulting need for robust regional institutions that could withstand and manage future crises (Dent 2013, 967). Dent argues that the 1997 crisis thus sparked a shift in Japan’s preferences from bilateral to multilateral regional agreements and organizations (2013, 970). 
Japan’s turn to multilateralism, however, predates the 1997 financial crisis (Tan 2015, 300). Japanese diplomats began promoting the idea of a Pacific community in the mid-1960s. Working with Australia, Japan developed initiatives including the Pacific Basin Economic Council (established in 1967), Pacific Trade and Development (established in 1967) and the Pacific Economic Cooperation Conference (established in 1980). Although these were regional frameworks rather than intergovernmental institutions, in 1989 Japanese–Australian efforts culminated in the establishment of the trade organi¬zation APEC. Starting with a relatively limited agenda on regional economic cooperation among 12 states, in 1994 APEC members agreed to create a free trade and investment zone across the Asia-Pacific by 2020.1 Kolmas argues that Japan’s growing support for pan-Asian economic cooperation from the late 1980s was in part a response to integration efforts underway in Europe and the Americas (2014, 63). Japan feared being left out of the global FTA game.
Japan’s style of quiet “leadership from behind” has caused many scholars to overlook its proactive role in promoting regional cooperation prior to the 1990s (Park 2006, 288). Japan was instrumental in founding the ADB in 1966. Aimed at promoting social and economic development, the ADB is one of the oldest and most densely institutionalized organizations in Asia. Global institu¬tions such as the World Bank or United Nations Development Programme could easily have performed the functions provided by the ADB and the US did not initially support the proposal for a regional development bank. The bank’s foundation was a diplomatic victory for Japan (Rathus 2011, 166). Today, Japan retains a high level of influence over the ADB. Japan’s govern¬ment holds the largest number of shares in the bank (15.7 percent, slightly more than the US), and as a result the president of the board of directors has always been Japanese (Katada 2016, 5). Japan has used its leadership role at the ADB as a vehicle to rebuild its postwar image, increase its regional influence and pursue its external economic interests.
Japan’s proactive role in the formation of the ADB allowed it to shape the rules governing the bank’s operations. Japan was able to ensure that 60 percent of the bank’s stock was reserved for regional members. This clause in the bank’s charter benefited Japan the most, as in the mid-1960s other Asian states were substantially less economically developed. The clause also prevented the bank’s Western donors—in particular the US—from outmatch¬ing Japan’s purchase of shares.
Japan was thus well positioned to influence decision making at the ADB from its inception (Kilby 2006). The funds the bank provided to Southeast Asia served Japanese economic interests by providing procurement con¬tracts and through the trade-facilitation effects of recipient states’ develop¬ment. Furthermore, as with bilateral Official Development Assistance, the ADB would help Japan recycle its trade surpluses and help ease tensions with regional partners over trade imbalances (Arase 2005, 13). Lim and Vreeland (2011) argue that Japan used its influence over allocation of ADB funds as a mechanism to win favor with voting members of the United Nations Security Council. But flexing its muscles at the ADB has not always served Japan’s national interests. China’s rise led to competition between Tokyo and Beijing for influence at the ADB. Both governments set up special bilateral funds at the bank in an attempt to guide the ADB’s operations to areas of strate¬gic importance to their national interest (Rathus 2011, 192). Despite China’s efforts to assert its influence, Japan has managed to retain its privileged position at the bank. By frustrating China’s ambitions at the ADB, Tokyo contrib¬uted to Beijing’s decision to establish the rival AIIB, which Japan has thus far declined to join. The launch of the AIIB will likely weaken the political and economic influence Japan is able to wield through the ADB (Katada 2016, 5). As outlined in the section below, Japan’s rivalry with China is a key factor shaping its regionalist policies since the 1990s.
Japan’s regional multilateralism since 1990
Most scholars concur that Japan sought to deepen its formal multilateral regional relations in the 1990s, either from the outset of the decade or follow¬ing the Asian financial crisis in 1997. Tokyo’s diplomatic assertiveness in the 1990s is attributed to various factors, all relating, in one way or another, to Japan’s declining economic dominance of the region and attempts to reassert its influence in the face of multiple challengers.
In the 1990s, globalization began to destabilize the regional structures and relationships underpinning Japan’s regional power. Japanese technology and capital no longer dominated the region. Foreign direct investment flows from Japan from 1998–2000 dropped to half what they had been from 1995–97, while flows from the US and Europe expanded (Hatch 2010, 203). US manu-facturers seeking mergers and acquisitions pumped more than $21 billion into the region in the three years from 1998, while their Japanese counterparts invested less than $14 billion. Japanese banks also lost their lead in commercial financing in Asia to European banks. By 2002, European banks held almost four times more in outstanding loans than their Japanese rivals (Hatch 2010, 204). In part, the decline in Japan’s economic position in Asia in the 1990s stems from the success of its earlier integration with its regional neighbors. Japanese companies with production operations in Southeast Asia were badly hit by the 1997 financial crisis. Despite trying to stabilize their affiliates with additional capital, Japanese firms had to cut production in Asia as markets and credit contracted. But as Japanese firms counted their losses, their Western counterparts swooped in to buy distressed Southeast Asian businesses at bargain prices. Under pressure from the International Monetary Fund (IMF), Asian governments relaxed restrictions on foreign investments (Stiglitz 2002). As a result, European and American firms were able to gain a foothold in Southeast Asia that was previously controlled exclusively by Japanese corporations.
Governments in East and Southeast Asia perceived that the actions of the IMF—widely considered a tool of US international trade policy—had exac¬erbated the 1997 crisis and delayed recovery. Anger at the IMF for prolong¬ing hardship in the region, coupled with the fact that American hedge funds profited handsomely from the crisis, hurt the US image in Asia. The crisis and its aftermath convinced governments across Asia that they must work together to look after their own interests, as global institutions under US leadership were unreliable. This conviction prompted Asian governments to cooperate in developing regional mechanisms to promote financial stability that excluded the US (Munakata 2006, 147). Other states in the region looked to Japan to spearhead efforts to create new institutional arrangements that would promote and sustain regional economic recovery.
Before the financial crisis broke, the 10 ASEAN governments had already arranged a summit with their Northeast Asian neighbors Japan, China and South Korea. Taking place in December 1997, the summit became the founding meeting of the ASEAN Plus Three (APT) group. Unsurprisingly, summit discussions focused on how to improve regional cooperation and governance of financial markets in order to mitigate future reliance on the IMF and US (Pempel 2010). Chastened by US disapproval of its proposal for an Asian Monetary Fund, Japan came to view APT as a platform through which to engage with China and other regional neighbors without involving Washington (Tan 2015, 303). Japanese officials further saw APT as a forum through which to integrate and socialize China into new norms of transpar¬ency and cooperation. To this end, MOFA pursued intensified engagement with Beijing in the late 1990s. Supported by political and societal consensus at home, Japanese diplomats utilized the APT framework to negotiate regional cooperation in around 20 policy areas, including energy and food security. New APT-led schemes to improve regional financial governance—most nota¬bly the CMI and Asian Bond Market Initiative (ABMI)—broke new ground in institutionalized cooperation among the region’s states, including China (Dent 2013, 967). Despite these developments, mutual suspicion between Tokyo and Beijing remained. At the same time as the inaugural APT summit in December 1997, Japan held a separate summit with ASEAN as a hedge against Chinese influence (Hamanaka 2010, 69).
The new mood of cooperation between Japan, China and their regional neighbors following the 1997 financial crisis did not last. Societal and institu-tional changes in Japan at the start of the new millennium undermined Sino-Japanese relations. A generational change was taking place in Japanese politics as the old guard of leaders, with memories of World War II, was replaced by a younger, more assertive generation. This new cadre believed Japan should take a more active role in world politics. The younger generation criticized their elders for continually kowtowing to China’s sensitivity over Japan’s wartime actions (Rathus 2011, 54–55). At the same time as this generational shift was taking place, the institutional structures governing Japanese foreign-policy-making were also in flux. MOFA began to lose influence over policy forma¬tion to the prime minister and cabinet office (Shinoda 2011). Although MOFA cautioned tolerance regarding Chinese posturing over Japan’s war record, growing public antipathy towards a rising China, and anxieties about relative decline, allowed right-wing politicians to gain greater control over bilateral relations with Beijing.
Prime Minister Koizumi (2001–06), born just three years before the end of World War II, derailed Sino-Japanese bilateral relations and multilateral coop-eration. Koizumi purged his government of pro-China ministers, including Foreign Minister Tanaka Makiko, whose father, former Prime Minister Tanaka Kakuei, normalized relations with China in 1972. As Foreign Minister, the younger Tanaka publicly criticized Koizumi’s visits to the controversial Yasukuni Shrine, where the souls of 14 Class A war criminals are enshrined (Rathus 2011, 56–57). Koizumi was more proactive in foreign-policy-making than many of his predecessors. Believing that strong relations with the US was fundamental to Japanese interests, Koizumi enthusiastically supported the US-led war in Iraq (Ishibashi 2007). Koizumi also considered Southeast Asia a vital region for Japanese foreign policy. China’s active engagement in the APT process and preference for closer China–ASEAN summits concerned Koizumi. Confirming his suspicions, in 2002, just before he left to tour Southeast Asia, China announced it had reached an agreement with ASEAN to form a FTA in the coming decade (Hamanaka 2010, 70). In response, Japan began to turn its focus away from APT and towards creating an expanded East Asia com¬munity. Japan hijacked Chinese proposals to turn APT—a process owned by ASEAN countries—into an East Asia Summit (EAS), in which ASEAN states and their three Northeast Asian partners would have equal footing. During negotiations between APT governments over the composition of the EAS in 2006, Japan successfully lobbied for the inclusion of India, New Zealand and Australia. Although China criticized Japan for expanding participation in the EAS, Beijing turned Tokyo’s diplomatic success to its own advantage. China used the precedent set by Japan to extend membership of the EAS to pro-China countries, including Russia in 2011. Rivalry between Japan and China thus undermined the original intention to transform the APT process into an EAS. Instead APT and EAS have evolved into separate entities. China asserts that APT should be the basis of a future East Asia community, as Beijing considers its influence is stronger when the number of participants is fewer. Japan, conversely, prefers to focus on the EAS—that now includes the US—as the nucleus of a future regional community (Tan 2015, 303). Concerned that China may dominate the APT process, Japan has encouraged the proliferation of regional institutions to the detriment of the utility and efficiency of East Asian multilateralism as a whole (Hughes 2009).
Despite the costs to regional institutional capacity, Japan’s caution in coop-erating with China is understandable from a realist and constructivist perspec-tive. China’s rapidly increasing role in world affairs since the end of the Cold War coincides with a rise in its domestic nationalism, military spending and aggressive posturing in its regional territorial disputes, including with Japan over the Senkaku/Diaoyu Islands. Following the Tiananmen Square protests in 1989 that questioned the legitimacy of the Chinese Communist Party (CCP), China’s government has commenced a large-scale nationalist propaganda cam¬paign, aimed especially at the young. The campaign not only celebrates the achievements of the CCP, but also denigrates Western powers and Japan as hostile “others” (Zhao 2000). Since the 1990s, the CCP’s propaganda cam¬paign has encouraged a more virulent Chinese popular nationalism, spurred by national economic growth (Deans 2005). China’s anti-Japanese nationalism has caused a backlash in Japan. The abuse that Chinese citizens heaped on Japan’s national football team at the 2004 Asia Cup, for example, resulted in a major deterioration in Japanese public sentiment towards China (Rathus 2011, 52). Chinese naval posturing over the Senkaku Islands has convinced Japan’s gov¬ernment and many of its people that China is a threat to national security. The implications for bilateral relations and regional institutions are generally poor.
Under the nationalistic leadership of Prime Minister Abe Shinzō (2012–), Japan’s diplomatic assertiveness towards China and ambitions to evolve as a “normal military power” have led scholars to conclude that Tokyo might pre¬fer to prioritize bilateral relations with Washington over regional multilater¬alism. These two policies, however, are not mutually exclusive. During the Obama administration, Japan stepped up its security integration with the US, but not at the expense of regional arrangements. Rather, with Obama’s sup¬port, Japan selectively engaged with some regional structures, while down¬playing others, depending on its strategic aims (Tan 2015, 297). In tandem with the US, Japan utilized multilateral institutions—especially the EAS—to both engage and contain China. Japan’s renewed security dependence on the US, however, comes at the expense of Japanese regional leadership and earlier commitment to broad and normative multilateralism.
In March 2013, Japan’s decision to join the US-led Trans-Pacific Partnership (TPP) FTA negotiations, despite strong opposition from its domestic agricul¬tural lobby, was partly motivated by geopolitical calculations as participants in TPP talks included several other Japanese security partners, but excluded China. Initial TPP negotiations began in 2008 among eight Asia-Pacific pow¬ers: the US, Singapore, New Zealand, Chile, Brunei, Australia, Peru and Vietnam. Malaysia joined the TPP talks in October 2010, followed by Canada and Mexico in October 2012. The TPP aimed to overcome complications arising from the dense pattern of heterogeneous bilateral FTAs between Asia-Pacific states. Businesses had long complained about the difficulties of comply-ing with the “noodle bowl” of trade and investment rules contained in the region’s bilateral FTA deals. The TPP aimed to harmonize these bilateral trade deals into a single agreement (Dent 2013, 975).
The idea of an Asia-Pacific FTA is not new. Japan made similar propos¬als in the 1960s. From the 1990s, numerous sub-regional FTAs were estab¬lished, including the North America Free Trade Agreement and ASEAN’s three separate trade agreements with China, South Korea and Japan. In recent years, two grand regional FTAs have been in negotiation: the US-led TPP and the Regional Comprehensive Economic Partnership (RCEP) championed by China. Holding its first round of talks in May 2013, RCEP seeks to harmonize the existing radial FTAs between ASEAN and China, Japan, South Korea, Australia, New Zealand and India. Regular diplomatic spats between Japan and China—as well as a host of other political and economic conflicts between participating states—have hindered progress on RCEP (Dent 2013, 980). In contrast, through painstaking negotiations the US, Japan and 10 other TPP¬participant states managed to resolve their various differences, signing a deal in February 2016. To come into effect, at least six countries accounting for 85 percent of the group’s economic output must ratify the TPP by February 2018 (BBC News 2017). Owing to its economic size, the US must be on board to meet the last condition, but US President Donald Trump has withdrawn from the TPP, plunging its fate into uncertainty. Trump’s announcement has given new prominence to RCEP and boosted China’s chances of writing the region’s economic road map for the twenty-first century. Reflecting China’s preferences, RCEP is a much more narrowly conceived trade agreement than the TPP. RCEP aims only to lower tariffs among participating countries, while the TPP pact included provisions covering foreign investment, public procure¬ment, intellectual property and a host of other elements important to Japanese business. The TPP was never just about economic issues. Crucially, it also signaled Washington’s commitment to the security of its regional allies, includ¬ing Japan. Demonstrating the centrality of the TPP to Obama’s Asia pivot, US Defense Secretary Ash Carter argued that ratifying the deal was as “important as another aircraft carrier” (Gracie 2016). Trump’s decision to pull out of the TPP is interpreted as ceding American regional influence to China, thus leav¬ing Prime Minister Abe’s external economic and security policies in disarray. Following Trump’s inauguration in January 2017, 84 percent of Japanese peo¬ple said they were worried his administration would create global instability. Regarding bilateral ties, 54 percent said they thought they would deteriorate under Trump (Japan Times 2017). America’s erratic president may yet con¬vince Abe to seek improved relations with Beijing to keep momentum behind regional economic integration. A first step would be for Japan to join the AIIB, a move supported by 60 percent of Japan’s business community (Lu 2016). But closer economic relations with China seem unlikely. More probable is a bilateral US–Japan FTA.
Today, Japan’s regionalist policy stands at a crossroads. Throughout the postwar period, bilateral relations with the US have been a key determinant of Japan’s regional multilateralist strategies. The changing security environment in East Asia following the end of the Cold War afforded Japan more latitude to pursue regionalist policies counter to Washington’s preferences. But Japan’s willingness to engage in regional institution building without the US was shortlived. Since 2000, China’s rising power has pushed Japan back towards the US and compelled Tokyo to draw Washington more closely into regional political and economic organizations. No one school of international relations theory adequately captures the multiple dynamics behind shifts in Japanese relations with China and the US that together have shaped Japan’s regionalism since the 1990s. Going forward, a realist approach suggests Japan will prioritize integration with the US to balance the growing power of China. But con¬structivist theory shows perceptions of threats can and do change. US President Trump’s unpredictable style has influenced Japanese public perceptions regard¬ing the reliability of the alliance, their national security and economic interests. How Japanese policymakers respond to these changes and what role regional¬ism will play in Japan’s strategy remains to be seen.