The Japan-Mexico FTA:: A cross-regional step in the path towards Asian regionalism

By most accounts, Japan and Mexico remain distant economic partners with only a modest volume of bilateral trade and foreign direct investment, and a large geographical and cultural gulf between them. By this depiction, the Japanese decision to negotiate with Mexico is puzzling if not downright nonsensical: Why would Japan invest so much political capital in the negotiation of a complex free trade agreement (FTA) with a nation accounting for such a minuscule share of its international economic exchange? Solis and Katada challenge this interpretation of Japan's second bilateral FTA ever, and demonstrate that far from being irrational or insignificant, the stakes involved in the Japan-Mexico FIFA were very high, and that this cross-regional initiative stands to exert powerful influence over the future evolution of Japan's shift towards economic regionalism. For a number of Japanese industries (automobiles, electronics and government procurement contractors) negotiating with Mexico was essential to level the playing field vis-a-vis their American and European rivals, which already enjoyed preferential access to the Mexican market based on their FTAs. For the Japanese trade bureaucrats, negotiations with Mexico offered an opportunity to tip the domestic balance in favour of an active FTA diplomacy, despite the opposition of the agricultural lobby. Negotiations with Mexico constituted a litmus test, both for the Japanese government and in the eyes. of potential FTA partners in Asia, on whether japan could offer a satisfactory liberalization package to prospective FTA partners to make these negotiations worthwhile.