The Political Economy of the Asia Pacic

Series Editor Vinod K. Aggarwal

For other titles published in this series; go to http://www.springer.com/series/7840

Vinod K. Aggarwal Seungjoo Lee

Trade Policy in the Asia-Pacic

Editors Vinod K. Aggarwal Department of Political Science University of California Berkeley, CA USA vinod@berkeley.edu

Seungjoo Lee Department of Political Science Chung-Ang University, Seoul South Korea seungjoo@cau.ac.kr

ISSN 1866-6507 e-ISSN 1866-6515 ISBN 978-1-4419-6832-6 e-ISBN 978-1-4419-6833-3 DOI 10.1007/978-1-4419-6833-3 Springer New York Dordrecht Heidelberg London Library of Congress Control Number: 2010938432
# Springer Science+Business Media, LLC 2011 All rights reserved. This work may not be translated or copied in whole or in part without the written permission of the publisher (Springer Science+Business Media, LLC, 233 Spring Street, New York, NY 10013, USA), except for brief excerpts in connection with reviews or scholarly analysis. Use in connection with any form of information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed is forbidden. The use in this publication of trade names, trademarks, service marks, and similar terms, even if they are not identied as such, is not to be taken as an expression of opinion as to whether or not they are subject to proprietary rights. Printed on acid-free paper Springer is part of Springer ScienceBusiness Media (www.springer.com)

Preface

The trade institutional landscape in the Asia-Pacic is in rapid ux. Countries in the transpacic region have been pursuing a web of bilateral and minilateral trade agreements. Controversy over which institutional conguration is best suited for the region has reached a high pitch, with leaders formulating new congurations on a regular basis. These ideas for new institutions come in the context of an already crowded eld of arrangements and a moribund World Trade Organization (WTO). These include the ASEAN Free Trade Agreement (AFTA), the ASEAN + 3 (including Japan, China, and South Korea) discussions, the East Asia Summit (EAS), which include these three plus India, Australia, and New Zealand, and APEC, with its 21 member economies (with Taiwan and Hong Kong, hence the term economies). More recently, we have seen a proliferation of bilateral free trade (or preferential, depending on ones degree of cynicism) agreements. New efforts to bring some semblance of order to the potpourri of trade accords include the Trans-Pacic Strategic Economic Partnership (TPP), which would link existing and create new bilateral trade agreements among Asia-Pacic countries. Ironically, in the 1980s, analysts expressed concern over the lack of institutional arrangements to manage economic relations in Asia. Although trade in Asia had grown rapidly with the networking role of Japanese rms and Chinese ethnic groups, some expressed concerns about the lack of formalized institutions. With the end of the Cold War, the Asian nancial crisis, rising Sino-Japanese rivalry, and now the global nancial crisis, scholars have often focused on these shocks as driving the institutional transformation of the Asia-Pacic. Yet this research on the East Asian region and the Asia-Pacic region more generally tends to be statecentric, focusing on characterizing actors national interests, but without paying adequate attention to key subnational players. Although shocks and systemic changes are undoubtedly crucial catalysts in accounting for the newfound rush to bilateral and minilateral efforts, these explanations fall short of fully capturing the crucial differences in national responses to common external shocks. This book attempts to address this lacuna in the examination of different types of East Asian trade policies and American strategies through the careful characterization of types of accords and then the development of a systematic domestic
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bargaining game approach focusing on idea, interests, and institutions to account for different types of arrangements. It is our claim that a focus on the interplay of these three driving forces can provide much deeper insight into the trajectory of trade institutions in the Asia-Pacic than a state-centric, billiard ball approach. The Kim Dae-jung Presidential Library, Yonsei University, was instrumental in bringing this effort to fruition. The foundations nancial generosity is much appreciated. Its support allowed us to host two major conferences at the University of California at Berkeley. These meetings and opportunities for interaction have greatly strengthened our work and also helped to build enduring ties among scholars that geographically span more than half the globe. At our rst meeting in Berkeley in December 2007, the participants beneted from the insightful comments of Alexsia Chan, Crystal Chang, Kristi Govella, Rongbin Han, Joon Seok Hong, Kenji Kushida, and Sara Newland. Based on their valuable suggestions, authors revised their papers and we held a second meeting in December 2008 at Berkeley. At this conference, we received comments from Kristi Govella, Kenji Kushida, Sara Newland, Seo-Hyun Park, and Darren Zook. The work of the Berkeley APEC Study Center staff proved crucial. Without the leadership of Project Director Kristi Govella, this book would never have seen the light of day. She provided insightful comments to the chapter authors and helped to manage the publication process. In these tasks, a number of undergraduates, who for the most part have worked or currently work at BASC as part of the Berkeley Undergraduate Research Apprenticeship program, also helped. For their work in managing the Berkeley conferences, we are particularly grateful to Bao Kham Chau, Robert Chen, Cindy Cheng, Ross Cheriton, Nathan DeRemer, Michelle Haq, Cindy Hwang, Vaishnavi Jayakumar, Andrew Kim, Anne Meng, and Aroon Vijaykar. In preparing the manuscript, we greatly beneted from the editing work of Kathy Bowen, Michelle Chang, Ren Yi Hooi, Robert Nelson, and Peter Volberding. We are indebted to the Ron and Stacy Guteish Foundation for their generous annual contributions to support BASCs work. Finally, we would like to thank Jon Gurstelle of Springer Verlag for his help and support. We, of course, remain responsible for any errors or omissions.

Contents

The Domestic Political Economy of Preferential Trade Agreements in the Asia-Pacic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vinod K. Aggarwal and Seungjoo Lee The Domestic Political Economy of Chinas Preferential Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ming Wan The Domestic Politics of Japans Regional Foreign Economic Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ellis S. Krauss and Megumi Naoi South Koreas Political Dynamics of Regionalism: A Comparative Study of KoreaJapan FTA and KoreaU.S. FTA . Sang-young Rhyu The United States and Asian Regionalism: The Politics of Reactive Leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amy Searight The Politics of Singapores Bilateral Free Trade Agreements: Enlightened Self-interest to Promote East Asian Regionalism in the New Millennium?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Lee Lai To and Ren Yi Hooi Evolving Trade Strategies in the Asia-Pacic . . . . . . . . . . . . . . . . . . . . . . . . . Vinod K. Aggarwal and Seungjoo Lee

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Index. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Contributors

Vinod K. Aggarwal is Professor of Political Science, Afliated Professor in Business and Public Policy at the Haas School of Business, and Director of the Berkeley APEC Study Center at the University of California at Berkeley. Ren Yi Hooi is an undergraduate majoring in economics and a research assistant at the Berkeley APEC Study Center, University of California at Berkeley. Ellis S. Krauss is Professor of Japanese Politics and Policymaking at the Graduate School of International Relations and Pacic Studies at the University of California, San Diego. Lee Lai To is Associate Professor at the Department of Political Science at the National University of Singapore. Seungjoo Lee is Associate Professor in the Department of Political Science at Chung-Ang University. Megumi Naoi is an Assistant Professor in the Department of Political Science at the University of California at San Diego. Sang-young Rhyu is an Associate Professor in the Graduate School of International Studies at Yonsei University and formerly served as Director of the Kim Dae-jung Presidential Library and Museum, Yonsei University. Amy Searight is an Adjunct Fellow at the Center for Strategic and International Studies in Washington, DC, and Adjunct Professor at the Elliott School of International Affairs at George Washington University. Ming Wan is a Director of the Global Affairs Program and Professor of Government and Politics at George Mason University.

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Abbreviations

ACFTA AFTA AMF APEC ARF ASEAN ASEM BTA CAFTA CEPEA CER DDR DPJ DRC EAEC EAS EASG EAVG EFTA EU EVSL FDI FSA FTA FTAAP GATT GCC

ASEAN-China Free Trade Area ASEAN Free Trade Area Asian Monetary Fund Asia Pacic Economic Cooperation ASEAN Regional Forum Association of Southeast Asian Nations Asia-Europe Meeting Basic Telecom Agreement China ASEAN Free Trade Agreement Comprehensive Economic Partnership in East Asia Closer Economic Relations Doha Development Round Democratic Party of Japan Development Research Center East Asian Economic Caucus East Asia Summit East Asia Study Group East Asia Vision Group European Free Trade Area European Union Early Voluntary Sector Liberalization Foreign Direct Investment Financial Services Agreement Free Trade Agreement Free Trade Area of the Asia Pacic General Agreement on Tariffs and Trade Gulf Cooperation Council

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Abbreviations

IMF ITA KORUS LDP MAFF METI MITI MMM MOFA MTI NAFTA NATO OECD PAFTA PAFTAD PBEC PECC PR PTA SACU SMD SNTV TAC TPP USTR VER WTO

International Monetary Fund Information Technology Agreement United States-South Korea Free Trade Agreement Liberal Democratic Party Ministry of Agriculture, Forestry and Fisheries Ministry of Economics, Trade, and Industry Ministry of International Trade and Industry Mixed Member Majoritarian Ministry of Foreign Affairs Ministry of Trade and Industry North American Free Trade Agreement North Atlantic Treaty Organization Organization for Economic Co-operation and Development Pacic Free Trade Area Pacic Trade and Development Forum Pacic Basin Economic Council Pacic Economic Cooperation Council Proportional Representation Preferential Trading Agreements South Africa Customs Union Single Member District Single Non-Transferable Vote Treaty of Amity and Cooperation Trans-Pacic Strategic Economic Partnership US Trade Representative Voluntary Export Restraint World Trade Organization