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Beyond Bilateralism

STANFORD UNIVERSITY PRESS

Contents

List of Illustrations.............................................................................................................................xiAcknowledgments...................................................................................................................................xiiiContributors......................................................................................................................................xvii1. Challenges to Bilateralism: Changing Foes, Capital Flows, and Complex Forums T. J. Pempel.....................................................1Part I Strategy and Security2. America in East Asia: Power, Markets, and Grand Strategy G. John Ikenberry....................................................................373. U.S.-Japan Security Relations-Toward Bilateralism Plus? Christopher W. Hughes and Akiko Fukushima.............................................554. Terms of Engagement: The U.S.-Japan Alliance and the Rise of China Mike M. Mochizuki..........................................................875. American and Japanese Strategies in Asia: Dealing with ASEAN Andrew MacIntyre.................................................................115Part II Economic Flows>6. Capital Flows and Financial Markets in Asia: National, Regional, or Global? Natasha Hamilton-Hart.............................................1337. When Strong Ties Fail: U.S.-Japanese Manufacturing Rivalry in Asia Walter Hatch...............................................................1548. Japan's Counterweight Strategy: U.S.-Japan Cooperation and Competition in International Finance Saori N. Katada...............................1769. Japan and the Evolution of Regional Financial Arrangements in East Asia Jennifer A. Amyx......................................................198Part III Multilateral Organizations10. At Play in the Legal Realm: The WTO and the Changing Nature of U.S.-Japan Antidumping Disputes Saadia M. Pekkanen............................22111. Japan, the United States, and Multilateral Institution-Building in the Asia-Pacific: APEC and the ARF Kuniko P. Ashizawa.....................24812. The United States and Japan in APEC's EVSL Negotiations: Regional Multilateralism and Trade Ellis S. Krauss..................................27213. Conclusion: Beyond Bilateralism-Toward Divided Dependence Ellis S. Krauss and T. J. Pempel...................................................296Notes.............................................................................................................................................331References........................................................................................................................................375Index.............................................................................................................................................403

Chapter One

CHANGING FOES, CAPITAL FLOWS, AND COMPLEX FORUMS

T. J. PEMPEL

For most of the period since the signing of the San Francisco Peace Treaty in 1951, relations between Japan and the United States were overwhelmingly characterized by bilateralism. Each country extended to the other special privileges that they did not extend to other countries. Moreover, the key economic, political, and security relationships between the two nations were primarily dyadic links between the two governments; little influence was allowed to nongovernmental actors or other nations. Most academic studies of U.S.-Japan relations correspondingly concentrated on this bilateralism.

Starting in the mid- to late 1980s, however, and accelerating since then, these once unambiguously bilateral ties have become far more complex and, consequently, ambiguous. Three forces account for the bulk of these changes: (1) alterations in geopolitics, (2) the enhanced role of private capital flows, and (3) the rise in number and importance of multilateral organizations. We argue in this volume that these three major trends have combined to restructure the previously bilateral nature of the U.S.-Japan relationship in fundamental ways, moving it "beyond bilateralism." Bilateralism has by no means vanished completely, nor has it been replaced by some equally easy-to-label alternative. Nonetheless, relations between Japan and the United States now manifest a panoply of new traits, directions, and managerial complexity that have unquestionably reshaped the relationship. Even where bilateral management continues to prevail-and we find this more in the security than in the economic or financial realms-elites from both countries must face more complicated choices and implications than their predecessors faced. This book analyzes the three major structural forces that have changed the relationship and explores the myriad ways in which relations between the United States and Japan have consequently been restructured. In the argot of social science, the book analyzes the complex ways in which these three independent variables have reshaped the dependent variable, namely, the U.S.-Japan relationship.

These forces, individually and in combination, have come to exert powerful and transformative influence over relations between the two countries. Such deep structural shifts by no means eliminate the role of choice by powerful actors in Japan and the United States. These actors' preferences and behaviors still count mightily in the shaping of policies. However, these new contexts have reshaped both the arenas in which these leaders act and the incentives that guide their choices, dramatically reducing the appeal of certain previous choices while making other alternatives increasingly appealing. The chapters in this book analyze the altered interplay between these three structural changes and the political and economic choices that have been made in response.

Our argument and the evidence of our contributors is that neither the relationship between the United States and Japan nor its consequences are any longer characterized primarily by bilateral ties. It no longer suffices to study the relationship or its consequences in isolation from the relationship's increasingly multilateral context. We therefore use the integrating theme of the volume, "beyond bilateralism," in three ways. First, we show that the economic, security, and political relationships have changed as the result of the forces noted earlier. Second, we apply the theme as well to the consequences of the changed relationship. The current character of relations between the two countries has unmistakably wider impacts on both the Asian region and the global political economy than it did a decade or more ago. These more comprehensive consequences reverberate well beyond the Washington Beltway and Kasumigaseki, its Japanese equivalent. Such broader implications-that is, the ripple effects of interactions between the United States and Japan on the broad regional and global canvas-are thus the second dimension to our use of the concept "beyond bilateralism."

There is now a rich and extensive literature on the ways in which the Asia-Pacific context, among others, has been transformed since the late 1980s toward greater multilateralism in economics and security. There is also, as is discussed...