Japan’s Perspective on the Future of the World Trading System

Abstract

This paper examines the implications of the Trump administration’s trade policies for the future of the world trading system and the role Japan should play in response. It argues that, behind the discourse of “national security” and “economic security,” recent U.S. trade policies primarily seek to rebuild and protect domestic industrial capacity and address the distributional consequences of globalization and industrial hollowing-out. This signals an emerging era of intensified international competition in industrial policy, in which governments increasingly pursue national interests through tariffs, subsidies, and other interventionist measures. This transformation is weakening the liberal foundations of the multilateral trading system. The principle of non-discrimination, particularly most-favoured-nation treatment, may give way to bilateral strategies and plurilateral arrangements among like-minded countries. Yet the United States is unlikely to abandon the WTO; rather, it appears to seek to reshape international rules through their revision, reinterpretation, or selective application. Against this background, de facto plurilateral arrangements, both within and outside the WTO, are becoming increasingly important. The WTO Agreement on Electronic Commerce and the CPTPP illustrate alternative pathways for developing new trade rules. Japan has responded by strengthening economic security while supporting the multilateral system through WTO reform, the MPIA, and the CPTPP. The paper concludes that Japan must move beyond adaptation and articulate an independent vision for the future institutional and normative development of the world trading system.