ABSTRACT
This chapter reviews developments in Japan's efforts to negotiate preferential trade agreements (PTAs) with neighboring countries and consider the implications of these efforts on the trade and economic environment in the region as well as on the transformation of the domestic economy. It focuses on the process of regional integration in East Asia, where Japan is an important player. The chapter discusses briefly some of the features of the regional integration process in East Asia. Japanese industries have experienced visible losses from their exclusion from PTA networks of countries like Mexico. Japan established its first PTA with Singapore, in 2002. Japan Singapore Economic Partnership Agreement includes a free trade agreement as well as other agreements in such areas as trade in services, investment and economic cooperation. Japanese firms have a handicap in the Mexican market compared with their American and European competitors, that makes it difficult for the Japanese firms already in Mexico to continue their operations.
