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East-West Center analysis about alliances and partnerships
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East-West Center

New Publication

At the Crossroads: The TPP, AIIB, and Japan's Foreign Economic Strategy
by Saori N. Katada

AsiaPacific Issues, no. 125 (Honolulu: East-West Center, May 2016)
8 pp.
Download PDF file free of charge


In 2015, two mega-initiatives took shape that will affect economic relations in the Asia-Pacific region: the US-promoted Trans-Pacific Partnership (TPP) trade agreement and the China-led Asian Infrastructure Investment Bank (AIIB). Although they address different needs, both are expected to have profound effects on Asia's economic governance in the near future, and will shape economic norms in the Asia Pacific and beyond. Japan has joined the TPP but stayed out of the AIIB, decisions that might seem counterintuitive considering its history of resisting trade liberalization and of promoting infrastructure investment. Is Japan simply favoring its US ally over rival China? Or is it that Japan's position on the TPP and AIIB aligns with its own economic priorities, and enhances its geoeconomic advantage? With a US-China competition over economic ideas and regional strategies, Japan occupies a unique position that may allow it to influence the direction of Asia-Pacific economic governance, which is now being battled out by the two "titans."





 


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