ABSTRACT
This chapter explores the international economic policy dimensions of Japan's economic performance in the two decades. The chapter identifies the three pillars of international policy strategy that underpinned Japan's success in the 1980s: it was a period of reform, trade liberalization, and large-scale investment by Japanese corporations abroad. Japan's trade growth and industrial development, which sustained higher-than-average growth in Japanese manufacturing productivity and put a safety net under Japanese economic performance even through the lost decades. The white paper on International Trade that the Ministry of International Trade and Industry (MITI) issued in 1998 still espoused the supremacy of the multilateral system for Japanese trade, and the only mention that free trade agreements (FTAs) received in it was negative. Unless foreign economic policy strategy is conceived of as an instrument of structural reform, there is little chance that it will contribute to the alleviation of Japan's economic malaise.
