Ideas and policy transformation: why preferences for regionalism and cross-regionalism diverged in Japan and Korea

Abstract

Cross-regional free trade agreements (FTAs) have flourished in East Asia since the late 1990s. Japan and Korea were at the forefront of this trend. Nevertheless, most policymakers’ preferences orbited around region-oriented FTAs out of reluctance to make a sudden policy shift away from their conventional emphasis on World Trade Organization-based multilateral negotiations. The trend continued in Japan throughout the 2000s. In contrast, Korea took a sharp turn toward a cross-regional strategy in 2003. By the mid-2010s, this had created a significant gap in the two countries’ overall FTA partner choices. What caused policymakers’ ideas in the two countries to diverge from their initial focus on region-oriented FTAs? This paper focuses on the conditions that enabled policymakers’ ideas to explain the divergence by developing the contextual‒dynamic framework of FTA policies. At the dynamic level, individuals are more likely to emerge with new ideas when their expertise comes from outside the decision-making body, accompanied by their social qualities and power. Contextual conditions should also be met: the trade policy environment should reciprocate agent-level qualities to create a supportive atmosphere for policy change.

Keywords:

• Regionalism
• cross-regionalism
• ideas
• FTA
• Japan
• Korea

Acknowledgments

This paper is partly based on the author’s dissertation completed at the London School of Economics and Political Science. The author wishes to thank Stephen Woolcock, Shujiro Urata, William Callahan, James A. Morrison, Ramon Pacheco Pardo, Maria Garcia, Hiro Katsumata, and anonymous reviewers for their constructive feedback. She is also grateful for her interviewees who generously shared their expertise and experience for this research. An earlier version of this paper was presented at the 2018 International Studies Association Annual Conference in San Francisco.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 See Bhagwati (1992, 2008), Dür (2007), Krueger (1999), and Schott (2004) for more general discussion on whether free trade agreements are building blocks or stumbling blocks to multilateralism.

2 To quote Heclo (1974/2010, p. 17), ‘one of the most important but most often neglected aspects of this policy environment is inherited policy itself.’

3 Policymakers tend to be reactive in promoting policy change and prefer incremental change, due to the difficulty of achieving consensus in the domestic political arena (Lindblom, 1968). Hall (1993) also suggests that policy change often occurs on a small-scale because it is difficult to change policymakers’ beliefs.

4 Ministry of International Trade and Industry (MITI) was renamed to METI in 2001. However, this paper uses METI for consistency and convenience.

5 Japan was one of the most careful initiators of the FTAs. For example, the name EPA was adopted instead of FTA when Japan first negotiated an agreement with Singapore, not only to include diverse cooperative elements of trade and to differentiate Japan’s goals for a more advanced and comprehensive trade agreement, but also to minimize the domestic backlash from the sensitive agricultural and fishery sector. Because ‘Free Trade Agreement’ could deliver a strong message to those hurt by the reduction of trade barriers, the Japanese bureaucrats chose the softer sounding ‘Economic Partnership Agreement’ (METI official, personal communication, December 4, 2015; ‘自由貿易ぼかす日本 ―― 官僚主導、反 発 回避を優 [Vague on “Free Trade” – Bureaucracy Lead, Avoiding Opposition],’ 2003, January 12)). As the name suggests, Japan’s first EPAs were an attempt to experiment with the various possibilities of new bilateral approaches of trade negotiations, while at the same time making an effort to convince domestic agricultural groups.

6 Director Miyagawa and Director Oike entered MOFA in 1979 and 1984, respectively.

7 Naoko Munakata entered METI in 1984 and has focused on trade policy ever since (METI, 2017, November 16); Michitaka Nakatomi served as trade expert in METI from 1995 to 2012 (RIETI, 2019).

8 Japan considered that the FTA with Korea could add momentum to further specify the Japanese model of EPAs, as Korea was the only developed country within the region at the time, in addition to Singapore. Hence, it came as a big disappointment to MOFA when negotiations with Korea stalled in 2004 (Oike, 2007, p. 21).

9 While the sense of regionalism continued to be emphasized, it was weakened in the face of economic interest. Even though Japan wanted to promote ASEAN + 3 FTA, China’s agricultural sector was too sensitive for the Japanese side. Alternatively, Japan pursued negotiations with Korea and ASEAN only (METI official, personal communication, December 4, 2015); arguments for the ASEAN + 6 FTA emerged in 2006.

10 Minister for Trade Kim received a B.A. (1981) and M.A. (1982) in Political Science from Columbia University and a J.D. (1985) from Columbia Law School in New York. He served as a senior lawyer with the WTO’s Appellate Body Secretariat and Legal Affairs Division from 1999 to 2003 (CSIS, 2017).

Additional information

Notes on contributors

Sohyun Zoe Lee

Sohyun Lee (Zoe) is a Postdoctoral Fellow of Institute of International Relations at the China Foreign Affairs University. Her research interests include free trade agreements and regional economic integration in the Asia-Pacific.