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U.S.-Japan and U.S.-China trade conflict: Export growth, reciprocity, and the international trading system

  • Bown, Chad P.
  • McCulloch, Rachel

First Japan and more recently China have pursued export-oriented growth strategies. While other Asian countries have done likewise, Japan and China are of particular interest because their economies are so large and the size of the associated bilateral trade imbalances with the United States so conspicuous. In this paper we focus on U.S. efforts to restore the reciprocal GATT/WTO market-access bargain in the face of such large imbalances and the significant spillovers to the international trading system. The paper highlights similarities and differences in the two cases. We describe U.S. attempts to reduce the bilateral imbalances through targeted trade policies intended to slow growth of U.S. imports from these countries or increase growth of U.S. exports to them. We then examine how these trade policy responses, as well as U.S. efforts to address what were perceived as underlying causes of the imbalances, influenced the evolution of the international trading system. Finally, we compare the macroeconomic conditions associated with the bilateral trade imbalances and their implications for the conclusions of the two episodes.

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Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 20 (2009)
Issue (Month): 6 (November)
Pages: 669-687

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Handle: RePEc:eee:asieco:v:20:y:2009:i:6:p:669-687
Contact details of provider: Web page: http://www.elsevier.com/locate/asieco

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  1. James Harrigan & Geoffrey Barrows, 2009. "Testing the Theory of Trade Policy: Evidence from the Abrupt End of the Multifiber Arrangement," The Review of Economics and Statistics, MIT Press, vol. 91(2), pages 282-294, May.
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  12. Ito, Hiro, 2009. "U.S. current account debate with Japan then, with China now," Journal of Asian Economics, Elsevier, vol. 20(3), pages 294-313, May.
  13. Greaney, Theresa M. & Li, Yao, 2009. "Assessing foreign direct investment relationships between China, Japan, and the United States," Journal of Asian Economics, Elsevier, vol. 20(6), pages 611-625, November.
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