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Unipolar Politics: Realism and State Strategies After the Cold War, by Ethan B. Kapstein and Michael Mastanduno (eds.)
Joseph M. Grieco
It was suggested in the early 1990s that the end of the Cold War and the loss of a common Soviet challenge to the advanced industrial democracies might split the world political economy into three main competing blocs centered around Germany in Europe, the United States in the Americas, and Japan in East Asia. 1 Since 1990 countries in many parts of the world have sought to construct or strengthen regional economic institutions. 2 In Western Europe these efforts have led to robust (albeit sometimes tumultuous) regional economic institutionalization, and in the Americas there has been significant initial movement toward institutionalization of regional economic diplomacy. 3 However, institutionalization of economic relations has failed to take hold in East Asia. 4 The only active arrangement in the region at present—the Association of South East Asian Nations (ASEAN)—has few accomplishments to its credit. 5 Most interesting from the viewpoint of the present discussion is that proposals to form an economic arrangement restricted to East Asian countries—the East Asian Economic Group (EAEG), and, later, the East Asian Economic Caucus (EAEC)—have failed so far to garner support or operational significance. At present, the only serious regional diplomatic effort aimed at economic liberalization—the Asia-Pacific Economic Cooperation forum (APEC)—is designed explicitly not to be a wholly East Asian regional entity and instead to be trans-Pacific in its membership and goals. 6
The variance one observes in regional economic institutionalization in Western Europe and East Asia is due in substantial measure to the marked differences in the policy preferences and strategies of the most powerful states in the two areas, Germany and Japan. In brief, Germany has sought very clearly to define its national interests and strategies in terms of formal European institutions. In contrast, Japan has not had such an institutionalist orientation regarding its neighbors. Japan has made no significant effort to help establish a uniquely East Asian economic arrangement, and indeed, as is described below, it rejected invitations in the early 1990s by countries in the region to undertake such a leadership role. Instead, it accepted what has become an essentially American-inspired program through APEC for transregional as opposed to intraregional economic diplomacy.
This chapter addresses two main questions. First, why, in the face of an apparently similar stimulus—the end of the Cold War—have Germany and Japan responded so differently on the issue of regional economic institutions? Second, can modern realist theory help us understand the differences observed in German and Japanese preferences for regional economic institutions? To pursue these questions, the next section provides a description of Germany and Japan’s recent policy preferences regarding regional economic arrangements. This is followed by a section in which the differences observed in German and Japanese preferences for such arrangements are shown to constitute an empirical puzzle for students of international politics if these differences are examined in light of liberal institutionalist ideas about the functional bases of international collaboration or from the viewpoint of important realist propositions about hegemonic leadership.
The third main section then puts forward a realist-inspired analysis that seeks to help account for the strong German bias in favor of regional institutions and the equally pronounced Japanese aversion for such arrangements to date. The main thesis presented in the section is that a part of the explanation for the difference in German and Japanese interest in regionalism centers around the current level and role of American power in the two regions. A second line of analysis is that differences in geostrategic circumstances at the outset of the Cold War in West Europe and East Asia, combined with differences in American grand strategy in the two regions, set the countries in the two areas on different trajectories regarding their interest in regionalism and amenability to institutionalized economic cooperation, trajectories that are still in evidence today despite the end of the Cold War. The final section analyzes the implications of this case study of realist theory and American policy.
German and Japanese Preferences for Regional Economic Institutionalization
For almost half a century, the Federal Republic of Germany has worked resolutely to define and pursue its national economic interests in terms of European institutions. Ever since it became a sovereign state in 1949, the Federal Republic has worked closely with its neighbors—in particular, France—to construct the region’s main economic arrangements: the European Coal and Steel Community in 1951, the European Economic Community in 1957, and the European Communities in 1967. 7
Germany has also played a key role—again, with France and, to some degree, Great Britain—in more recent European Community efforts to develop important new programs for trade (the Single Market Program in 1985), and internal Community decisionmaking (the Single European Act of 1987). 8 In addition, Germany has been vital in EC (now European Union, or EU) efforts to construct special arrangements aimed at enhanced institutionalized European monetary cooperation: the “snake in the tunnel” in 1971, the European Monetary System in 1979, and, with the Maastricht Treaty of 1992, a posited trajectory for full Economic and Monetary Union perhaps by the turn of the century. 9 Germany has also taken on a leading role in EU negotiations to expand trade with the former Soviet satellite countries, and eventually to expand the European Union to include such countries as Hungary, Poland, and the Czech Republic. 10
In contrast, Japan has been indifferent and even hostile to proposals for regional economic institutionalization in East Asia. Japan has made no significant effort to help establish an East Asian institutionalized arrangement aimed at regional economic liberalization and integration. Indeed, the diplomacy during 1990 and 1991 surrounding the ill-fated East Asian Economic Group suggests that Japan has made a clear-cut choice against regional institutionalization, at least for the present.
In December 1990, in the wake of the failure of the GATT countries to bring the Uruguay Round to completion on schedule, and in the face of new efforts at European Community integration and the ongoing talks surrounding the North American Free Trade Agreement, Malaysia’s Prime Minister, Mahathir Mohamad, suggested that the East Asian countries should establish their own East Asian Economic Group (EAEG). 11 The group, as envisioned by the Malaysian government, would be composed of the six member countries of ASEAN—Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand—plus China, Japan, South Korea, Taiwan, Hong Kong, Vietnam, Cambodia, and Laos, but not Australia, New Zealand, or the United States. 12 Mahathir’s Foreign Minister, Rafidah Aziz, suggested in March 1991 that such an arrangement could serve as a pressure group for East Asia in the Uruguay Round in a manner similar to that being pursued by the Cairns Group of agricultural producers. However, she also left open the possibility that such a group might evolve into an East Asian common market at some future point. 13 Thus, Malaysia’s foreign policy leaders appear to have thought of EAEG as being at the minimum a Uruguay Round lobbying group, and at the maximum a nucleus for a potential full-blown formal trade bloc in East Asia, one that would exclude a number of Pacific Rim countries, most notably the United States.
Malaysia’s EAEG proposal appears never to have had a good chance for success. Singapore was the only country in the region to offer even qualified official support for the proposal. 14 In contrast, in early January 1991, Indonesia’s Foreign Minister and Trade Minister both expressed doubts about the idea of a regional arrangement, and indicated that it required fuller consultations among the ASEAN partners. 15
Moreover, the key country in the EAEG would have been Japan, and that country was markedly disinclined to pursue such a proposal. In late April 1991, Japan’s Prime Minister, Toshiki Kaifu, indicated that his government would react to the proposal only after Malaysia had worked with its ASEAN partners to develop a more complete view on what EAEG would entail. 16 However, Kaifu was more clearly and categorically hostile to the proposal a month later: he was quoted as saying that, “At a time when we are trying to build a free trade system, we shouldn’t create problems and misunderstandings with the aimless establishment of lots of small groups.” He was reported further to acknowledge that he had taken a “cool and impassive approach” toward the proposal, but that “I am thinking from a global perspective, one that will benefit Asia.” 17
In early October 1991 Mahathir acknowledged that he did not have support even within ASEAN for an EAEG. He then tried to solicit support for a more modest and less formal arrangement, an East Asian Economic Caucus (EAEC), which in response to an Indonesian proposal the ASEAN countries agreed in July 1993 would operate solely within the framework of APEC. 18 However, Japan was unattracted even to this approach to East Asian regional economic institutionalization. In November 1991, Koichi Kata, the Chief Cabinet Secretary, made it clear that Japan would not participate even in an informal East Asian caucus given that the latter would exclude the United States. 19 Malaysia did attain modest ASEAN support for an EAEC. 20 However, by July 1993 Japan and South Korea made it clear that they would not join the Caucus. 21 During the spring of 1995 Mahathir continued to press for an EAEC, but specified that Australia and New Zealand would not be included because they were not “Asian countries.” 22 This appears to have given Japan an opportunity to put even more distance between itself and the EAEC proposal: the Japanese government indicated during the summer of 1995 that it would support establishment of the EAEC only if all other APEC countries endorsed such an effort, which was unlikely in light of strong U.S. objections to the EAEC concept (discussed below), and only if the proposed Caucus included Australia and New Zealand. 23
Prime Minister Mahathir has sometimes suggested that EAEC could go forward without Japan. 24 However, it is clear that few countries in the region are or will become interested in an EAEC that does not include Japan. For example, when the Japanese government announced in April 1995 that it would not attend an ASEAN-proposed meeting on the EAEC proposal, the prospective host, Thailand, canceled the meeting. 25 Given Japan’s strong and now sustained opposition to the EAEC, the organization’s future can only be considered highly bleak.
Japanese and German Preferences for Regionalism As A Puzzle for International Theory
In light of the country’s decisive role in the failed diplomacy surrounding East Asian economic institutionalization during the 1990s, we need to ask in the first place whether it is surprising that Japan elected not to pursue institutionalization as would have been entailed by the EAEG and EAEC proposals, especially in light of Germany’s strong support for regionalism in Western Europe. Indeed, one might suggest that Japan has been disinclined to pursue formal regional institutionalization because it does not need it to enjoy the benefits of close regional economic integration. Why, then, should it be expected that Japan would incur the inevitable costs associated with institutionalization?
Three points can be made in response to this question. First, there are grounds to suggest that Japan did in fact seriously consider both the EAEG and the EAEC institutional options. Over the years there have been reports that senior Japanese officials in the Ministry of Foreign Affairs, the Ministry of Finance, and the Ministry of International Trade and Industry (MITI) were sympathetic to the EAEG and, later, the EAEC proposals. 26 Regarding the latter, for example, Japanese Foreign Minister Yohei Kono attended an ASEAN-sponsored informal planning session regarding EAEC hosted by Thailand in July 1994. 27 Finance Minister Masayoshi Takemura was quoted in early 1995 as saying that the Japanese people were becoming sympathetic to the idea of holding talks “amongst East Asians.” 28 And Toshiki Kaifu, president of the New Frontier Party, indicated in early 1995 that Japan should keep open its option to participate in EAEC. 29 It should also be noted that there has been a broader debate in the Japanese bureaucracy in recent years on whether Japan should develop a stronger Asian orientation in its foreign policy, and at least some of these “Asia-first” advocates viewed the EAEC proposal with interest. 30 Finally, there were arguments within the Japanese business community—specifically, among officials connected with the Keidanren, Japan’s main business organization—in favor of the EAEC concept. 31
Second, and as highlighted in the next section, two different U.S. administrations worked hard to bring about the failure of the EAEG and the EAEC. At the core of this effort was the application of significant pressure on Japan to ensure that it would reject both proposed arrangements. Given these sustained, high-level U.S. efforts directed at a number of East Asian countries and especially Japan, it might be inferred that the proposals had some regional credibility, including possible Japanese interest in them. Thus, while there were clearly problems with Malaysia’s proposals for EAEG and EAEC, including insufficient consultation on Malaysia’s part with Japan and even its ASEAN partners, the proposals elicited interest in some Japanese policy circles, and it was sufficiently serious that it drew increasingly harsh criticisms from the United States (and, it should be noted, Australia).
Third, from the viewpoint of existing systemic international theory, it might have been expected that Japan would be interested by the early 1990s in the construction of a formal East Asian economic arrangement. From the viewpoint of arguments within the liberal institutionalist tradition, for example, the Japanese government might have been expected to react to changes that occurred during the past decade in Japan’s trade patterns by developing a significant interest in the formation of such an arrangement. Drawing on that tradition’s functionalist logic, a country should become motivated to establish a formal regional trading regime if and as its trade is becoming more regionally concentrated: as such a country becomes more dependent on its regional partners for trade, it should experience a greater functional need for and interest in attaining the certainty and stability of access to those partners that might result from formal arrangements. 32
To obtain a sense of whether Japan could have been expected to develop a functional interest in East Asian regional institutionalization, Figure 9.1 presents data on changes from the 1970s through the early 1990s in the percentage of Japan’s overall exports going to the countries (except Vietnam, Cambodia, and Laos) that would have composed the EAEG/EAEC. For purposes of comparison, the figure also presents data on Germany’s regional concentration of exports in connection with its EC fellow-members and the United States’ regional export concentration in regard to its NAFTA partners.
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Figure 9.1: Percentage of Total Exports of Germany, Japan, and the United States to Regional Partners, 1970-1994 |
The figure indicates that for many years Germany has had a much higher percentage of its exports going to its EC partners (now expanded from 12 to 15) than Japan has had in regard to its potential EAEG/EAEC partners in East Asia. This certainly helps account for Germany’s stronger preference for European regionalism compared to Japan’s lower preference for Asian institutionalization. However, at least two features about the data in Figure 9.1 suggest that Japan ought to have developed a stronger preference for a regional arrangement in recent years. First, Japan’s export dependence on East Asia, while not approaching that of Germany’s in respect to Western Europe, has been growing quite significantly: the recipients of roughly one-fourth of Japan’s total exports during the 1970s and the bulk of the 1980s, Japan’s proposed EAEG/EAEC partners became the recipients of roughly one-third of Japan’s total exports during the late 1980s and early 1990s. Second, while the regional export concentration levels of both Japan and the United States have grown in the past decade—that is, both have begun to look somewhat more like Germany in Western Europe—Japan’s regional export dependence actually has exceeded that of the United States in recent years (an average of about 34% for Japan between 1990 and 1994 compared to 29% for the United States during the same period). In light of the way in which the United States responded to growing regional trade dependence, its development of NAFTA, it is surprising that Japan reacted so differently, essentially rejecting regional institutionalization, in the face of a similar stimulus, an acceleration of Japanese trade dependence on its own region.
Just as functional institutionalism has difficulties in accounting for the divergence between Germany and Japan with regard to their preference for regional economic institutions, so too realist theory has difficulties in explaining that divergence. From a realist viewpoint it might have been expected that, in light of the end of the Cold War, the erosion of bipolarity, and the possible reduction in American attention to East Asia, Japan would turn to regional institutionalization as a form of insurance that its close ties with its East Asian neighbors would continue in a stable, predictable context. Yet, the end of the Cold War and bipolarity have not caused Japan or, for that matter, Germany, to shift their preferences regarding regionalism. 33 Japan was highly disinclined to pursue regionalist policies during the Cold War, and this has not changed since 1989. The Federal Republic was highly regionalist in its foreign economic policy during the Cold War, and it has stayed on (and indeed reinforced its commitment to) that course since reunification with the eastern zone. Hence, in the face of a momentous change at the international level—the end of the great Soviet-American struggle that had defined the basic structure of the international system for half a century—we see little significant change in the behavior of two very powerful secondary countries toward their neighbors in regard to regional institutions. This continuity in Japanese and German policies concerning regional institutionalization in the face of international structural change raises questions about whether it has been the polarity of the international system that has been driving the behavior of these two key states in an important policy domain.
Moreover, it might have been expected that as Japan became more hegemonic in East Asia it would have the capacity and, more importantly, would develop the desire to provide the leadership necessary to construct regional arrangements for the area. This line of analysis—that a regional hegemon is at least a necessary condition for regional economic institutionalization—would appear to be confirmed in the case of regional cooperation in North America, where the United States in 1990 accounted for more than 80 percent of that area’s economic activity. However, while Germany was the site for about one-fourth of Western Europe’s gross domestic product in 1990, Japan at that time was the origin of almost three-quarters of the economic activity of the countries that would have constituted the EAEG/EAEC. 34 Hence, while Japan enjoys a much more pronounced overall hegemonic position in East Asia than Germany does in Western Europe, and approaches the United States’ overall hegemonic position in North America, Japan has not presented evidence that it is as willing as either Germany or the United States to exercise leadership in regional economic institutions in the post-Cold War era.
Realist Theory and German and Japanese Preferences for Regionalism: The Impact of American Power and Strategy
The discussion above suggests that, from the viewpoint of both functional institutionalism and realism, it is puzzling that Japan continues to have a weak preference for regional institutions, and especially while Germany continues to have a strong preference for such institutions. The discussion below suggests that the resolution of this puzzle may be found in the character and level of American power and strategy during the Cold War and since its conclusion.
To develop this argument, it may be helpful to begin with Japan and its refusal to support the EAEG and EAEC proposals. Japan’s disinclination to pursue either approach was due to many factors, including domestic institutional characteristics that make foreign policy innovation by that country quite difficult. 35 But one that was clearly of major importance to Japan was the strong opposition expressed by the United States to both options, and particularly to the prospect of Japan’s becoming a part of either proposed arrangement. The United States began to voice its opposition to Malaysia’s EAEG proposal early in 1991. 36 Vice President Dan Quayle, in an address in May, said that the United States would “not welcome” an arrangement from which it was excluded. 37 In addition, in early November a letter from Secretary of State James Baker was submitted to the Japanese government and other prospective EAEG members specifically requesting that they not support the proposal. 38
This opposition continued with the change in U.S. administrations, and in regard to Malaysia’s fallback proposal for a Caucus rather than a more ambitious Group. For example, after being provided details in May 1994 on the Malaysian proposal for an EAEC, including the idea that the Caucus would operate within but not be responsible to APEC, the Clinton Administration formally presented its view to Japan and Thailand, then ASEAN chair, that the arrangement should not be pursued by the East Asian countries. 39 Assistant Secretary of State Winston Lord explained in July that the proposal had “seemed to [be] a more ambitious concept than we had been led to believe,” and “we don’t want to see anything develop that would have a dividing line down the Pacific.” 40 Similarly negative statements about the EAEC were made by senior administration officials in September 1995, with Joseph Nye, Assistant Secretary of Defense, suggesting (and perhaps issuing as a warning) the view that he believed that East Asian countries had rejected the EAEC because they recognized that, had they moved down a path leading to exclusion of the United States, “we would probably withdraw our security presence.” 41
There is good evidence that at least a part of Japan’s reticence to pursue either the EAEG or the EAEC option was in fact related to U.S. opposition to both ideas. For example, in explaining Japan’s opposition to the EAEC proposal in November 1991, Chief Cabinet Secretary Kato specifically cited the United States’ important economic and security role in the region. 42 Similarly, according to the Nikkei Weekly, while Japanese officials had revisited the idea of supporting the EAEC proposal in the first half of 1994, they decided that “at a time when close cooperation with Washington is vital in dealing with North Korea, diplomatic wisdom dictates Japan should not do anything that could unsettle its relations with the U.S.” The report also quotes Foreign Minister Yohei Kono as emphasizing in a recent meeting with his Malaysian counterpart the view that, “If EAEC is embarked on without the support of the U.S. and other nations, its value will be halved.” 43 Japan’s decision not to attend the April 1995 proposed ASEAN-sponsored meeting in Thailand was apparently heavily based on a desire not to alienate the United States. 44 Finally, in explaining why Japan continued to avoid the EAEC option, in July 1995 the spokesperson for Japan’s Foreign Minister noted in a press conference that, “As you know the United States is still very much opposed to the idea of the EAEC . . .[and] some other countries are opposed to the EAEC as well.” 45
The United States pressured Japan to reject both the EAEG and the EAEC proposals, and Japan rejected those proposals at least in part so as not to provoke the United States. American policy preferences thus help to account for Japan’s disinclination to pursue a wholly East Asian economic grouping in the early 1990s. But to say that the United States opposed Japanese support for East Asian economic institutionalization and that this helps account for the low preference on Japan’s part to pursue such an option raises another question: what about Germany and the EC/EU? Why, in light of the United States’ vigorous efforts to press Japan to reject the EAEG and the EAEC, do we not see similar efforts by the United States to seek to influence Germany to forestall the further development of the Community?
There are at least three reasons why American policy toward Germany and the EC has differed from that toward Japan and East Asian economic institutionalization. First, while the United States believes that the EC has had a basically positive impact on U.S. trade interests, there is great concern that an East Asian trade would have a manifestly negative effect on U.S. commercial interests in that region, especially if it were centered around Japan. The United States has on occasion raised concerns about European institutionalized integration. For example, it has repeatedly voiced complaints about the Community’s Common Agricultural Policy, it has insisted on its GATT rights and requested compensation when the EC expanded to include such countries as Spain and Portugal, and it has expressed concerns about such recent EC policy initiatives as the Broadcasting Directive. 46 However, the United States has viewed the EC/EU as, on balance, a trade-creating arrangement, and it certainly recognizes that Germany has been a leading force for economic openness within the Community.
In contrast, U.S. officials in the early 1990s specifically voiced their concern that an EAEG would promote closure of Asian markets to the United States, and would do so precisely because it would be decisively driven by Japan. As one news report indicated in October 1991, “Despite claims to the contrary, U.S. officials say, Mahathir’s proposed East Asian Economic Group (EAEG) could—in a worst-case scenario—develop into a protectionist bloc prone to shedding traditional values of open markets,” and it went on to specify that, “The obvious tendency would be to emulate the Japanese model of development through industrial policy, managed trade and mercantilism, a model that draws vociferous complaints of unfairness from the West.” Indeed, it was because the United States wanted to counter this prospect of a closed East Asian arrangement that it pressed for the development of Australia’s APEC proposal; for example, an American official was quoted in the October 1991 news report as saying about APEC as an alternative to EAEG that, “Our goal is to get all these countries into the camp of open markets rather than see them take the Japanese approach of more managed trade.” 47
A second argument draws more explicitly on realist-oriented work by Albert Hirschman and Kenneth Waltz on the political effects of asymmetric economic interdependence. A basic insight resulting from their respective analyses is that if one partner in an interstate economic relationship would sustain fewer losses than the other partner were the relationship terminated, then, other things being equal, the former would enjoy greater influence in the relationship. 48 This insight can allow us to assess various bilateral relationships in terms of differentials in potential influence; in particular, it suggests that even if the United States wanted to pressure both Germany and Japan to slow or reverse economic institutionalization in their respective regions, America’s capacity to so influence Germany would be substantially less than it would be in regard to Japan.
There are, for example, sharp differences that exist between Japan and Germany in terms of their respective stakes in the American export market. This can be observed in Figure 9.2, which provides data on the percentage of total exports from Japan and Germany going to the United States from 1970 to 1994. The figure shows that Japan has needed the United States export market much more than has been true of Germany. For example, while during the early 1990s about 7 percent of Germany’s total exports went to the United States, about 29 percent of Japan’s went to that market. Hence, even if the United States wanted both Japan and Germany to forgo regional economic institutionalization in the trade issue-area, it is in a much more powerful position to press this interest in regard to the former than to the latter.
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Figure 9.2: Percentage of Total Exports of Germany and Japan to the U.S., 1970-1994 |
A similarly higher level of Japanese export dependence on the United States compared to Germany can be observed in Figure 9.3, which presents data on exports from each country to the United States as a percentage of their respective gross domestic products from the 1970s to the early 1990s. Again, Japan has experienced a higher level of dependence on the United States for its overall economic growth and well-being than has Germany. For example, while approximately 2.6% of Japan’s national annual economic activity during the early 1990s was composed of exports to the United States, about 1.5% of Germany’s GDP during this period took the form of exports to the U.S. market.
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Figure 9.3: Japanese and German Exports to United States as a Percentage of their Gross Domestic Product, 1970-1994 |
In addition, Figure 9.4 provides evidence that, as a basis for importing goods and services from the rest of the world, Japan has needed its bilateral trading relationship with the United States much more than Germany has relied on its American ties. The figure presents data on the percentage of imports by Japan and Germany from countries other than the United States that are covered by Japanese and German net exports to (that is, their respective trade surpluses with) the United States. The figure indicates that almost one-fourth of Japanese imports from countries other than the United States between 1990 and 1993 was paid for by that country’s net exports to the United States; the comparable figure for Germany during those years was substantially less than 1 percent.
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Figure 9.4: Japanese and German Non-U.S. Imports Covered by Net Exports to the United States, 1970-1994 |
These data suggest that Japan is markedly more dependent on the United States export market than is Germany. This acute Japanese trade dependence would certainly help account for Japan’s reluctance to be supportive of EAEG and EAEC if this entailed a confrontation with the United States. Of course, that this was true in the case of EAEG and EAEC does not mean that Japan is helpless in all its political-economic dealings with America. Indeed, in other issue-areas, such as high technology and especially finance, U.S.-Japanese relationships are more symmetrical, with each having strong interests in maintaining favorable ties with the other, and it is likely that the United States may be reluctant to press its position in some trade issues (like automobiles) because of its interests in those other nontrade issue-areas. However, Japan does not appear to have found the EAEG and EAEC proposals to be so important or promising to use any leverage arising from the symmetrical vulnerability in those nontrade issue-areas as a way of parrying U.S. pressures against EAEG and EAEC.
Another key factor contributing to asymmetrical interests between Japan and the United States on the one hand and Germany and the United States on the other concerns the respective security situations of the two regional powers in the wake of the Cold War. Since the late-1980s, Japan has faced a wider and more serious array of security challenges than Germany, and for that reason Japan may be more interested in maintaining good relations with its U.S. ally as a security question than is true of Germany. Germany’s security position has improved dramatically since 1989: its main threat since 1945, the Soviet Union, no longer exists; the main military alliance that had been directed at the Federal Republic, the Warsaw Treaty Organization, also no longer exists; Russia at present is not simply interested in good relations with Germany, it positively needs German economic assistance; even if Russia were to turn authoritarian at home and adventurist abroad, it would do so with highly diminished military capabilities; and a number of independent states now lie between Russia and Germany, greatly increasing the difficulties that Russia would have in exercising a military threat. For these reasons Germany is interested today in U.S. security ties not so much as a counter to real, immediate threats but as insurance against theoretical, distant contingencies.
Japan’s situation is quite different. There is, in the first place, the immediate danger that North Korea might now have, or will soon possess, a capability to threaten Japan with nuclear weapons. In addition, and perhaps more ominously in the near future, China is a rapidly growing economic force in East Asia, and there are disturbing signs that it wants to revise the political and perhaps even the territorial order of the region. 49 Thus, Germany remains interested in a solid security relationship with the United States as a matter of prudence; for Japan the military alliance with the United States is a matter of necessity.
This discussion of asymmetries in Japanese and German interests in the good will of the United States may help account for Japan’s acute responsiveness to American objections to a uniquely East Asian economic arrangement. But there is one final set of factors that must be highlighted as we try to understand why the United States came to view regionalism in Western Europe and East Asia so differently, and why institutionalization has varied so markedly in the two parts of the world: the differences in the geostrategic circumstances of the Cold War in East Asia and Western Europe, the way in which these geostrategic differences caused the United States to develop very different political-military strategies for the two regions, and the direct and profound impact that these differences in U.S. strategies had on the trajectory of intraregional relations in the two areas. 50
As John Ikenberry emphasizes in an important essay, the United States sought at the conclusion of World War II to help construct a genuinely multilateral (“one-world”) economic order based on the Bretton Woods negotiations on monetary matters and the talks on the ill-fated International Trade Organization. As World War II ended and competition between the United States and the Soviet Union intensified, however, the United States was compelled to turn from its original plans for a multilateral global order to a European “third force” option. That is, the United States abandoned full world multilateralism and sought instead to promote the development of a Western Europe that was both strong and autonomous and linked closely to America through joint economic and security institutions. The United States would continue to work with Western Europe through the Bretton Woods agreement and the fallback to the ITO, the General Agreement on Tariffs and Trade, or GATT. But these efforts would be supplemented by specifically Euro-American projects. The early military-institutional manifestations of this new strategy were the Truman Doctrine of 1947 and the North Atlantic Treaty of 1949; its first economic elements were the Marshall Plan of 1948 and, as its main European operating entity, the Organization for European Economic Cooperation (OEEC), established in 1948, as well as the European Payments Union (EPU), founded in 1950. 51
In pursuing this “third force” option, the fundamental political-military problem for the United States and its Western European allies from the late 1940s (and indeed throughout the Cold War) was crystal clear. First, the Soviets enjoyed massive conventional military superiority. Second, there was no way the United States could commit sufficient ground troops to offset that superiority. Third, while nuclear weapons might ensure deterrence, this became less credible as the Soviets developed a more deadly nuclear arsenal. Fourth, if there were to be a realistic chance that the West could employ conventional military forces to defeat and thus to deter a Soviet conventional military attack, the prospects for such a Western strategy would be greatly augmented if the Soviet thrust could be stopped at the West’s geographic and political front line—West Germany. Finally, there was one and only one Western European state with sufficient manpower and potential military-industrial capability to contribute decisively to Western conventional power, and the motive to turn that potential capability into actual power—the Federal Republic of Germany. 52
This last fact created profound misgivings in Germany’s World War II victims, and especially in France. The solution to which the Western Europeans turned, and for which the United States gave strong and vitally important support, was to allow Germany to rebuild its economy, and later its armed forces, within the framework of regional economic and security institutions. 53 In this way, Germany’s neighbors believed, German power would be shared with and managed by its Western European partners, and those partners would be able to cooperate with but not be dominated by that key country. 54 The institutions for this strategy in the economic domain were of course the European Coal and Steel Community and, later, the European Economic Community and the European Communities; in the security domain they were the North Atlantic Treaty Organization (after the proposal for a European Defense Community was defeated by the French parliament in 1954) and, to a lesser degree, the Western European Union. 55
The West German government was highly attracted to this approach for several reasons. First, European integration allowed Germany to undertake reindustrialization. Second, it created a context within which Germany reattained sovereignty and a larger voice in European affairs. Third, the reemergence of Germany within the framework of European institutions permitted and fostered the relegitimization of the German state both within Germany and within the European and world system. 56
Hence, from the beginning of the Cold War, to have any real chance of pursuing their fundamental goal of preventing the domination of Western Europe by the Soviet Union, the Western European countries and the United States needed an industrialized, militarily potent West Germany. To have German economic and military power available to the Western alliance without also permitting German hegemony in Europe, its neighbors pursued and the United States promoted the creation and development of NATO and what has become the European Union. It is of course an open question as to whether Germany’s neighbors have succeeded in limiting German power through institutions; Germany’s near-total domination of recent EU diplomacy regarding Europe’s path to EMU suggests that this strategy has serious limitations. 57 But the Western Europeans remain committed to this strategy and the Americans continue to embrace the goal of European economic integration and institutionalization.
For Germany, European integration has yielded tremendous economic benefits. It has, as noted above, also permitted German reentry into European and world affairs. Finally, the diplomacy of the European Community and now the Union makes it clear that no important European initiative can move forward without German support, and none can survive German opposition. The case of EMU shows in fact that Germany now dominates—in a tactful, diplomatic, but unambiguous way—the key characteristics of important European institutional initiatives. The Community at first gave the Germans a way by which they could again be a part of civilized Europe; now it provides them with a vehicle for exercising great and growing power discreetly and without arousing substantial resistance or even very much resentment.
As the Cold War commenced in East Asia in the late 1940s, the United States shifted its attention in Japan from democratization and decartelization to economic recovery. 58 As a part of that “new course” strategy, the United States sought to encourage the reestablishment of trade between Japan and its East and Southeast Asian neighbors (with the notable exception of China) without necessarily creating formal regional institutions to accomplish that goal. 59 Later, and as the Cold War intensified in that part of the world, the United States came to favor the establishment of regional economic institutions that would involve Japan. For example, Burton Kaufman reports that as a part of a containment strategy in Asia in the wake of the Korean War and the French defeat in Indochina, President Eisenhower and Secretary of State John Foster Dulles expressed in late 1954 the view that Japan was the key U.S. ally in the region and that it was essential to support it by fostering closer economic ties between that country and those in Southeast Asia. Further, Kaufman reports that in October 1954 U.S. foreign aid chief Harold Stassen proposed to Asian countries participating in the Colombo Plan that they band together to establish an organization similar to the OEEC in Europe, and the Eisenhower administration sought from 1954 through 1956 to obtain approximately $200 million from Congress to be distributed through such an Asian regional aid arrangement. 60
However, even before Congress declined to provide these resources, thirteen Asian countries met in May 1955 in Simla, India, to discuss how that proposed U.S. aid could be employed, and they formally rejected the idea that they should form a regional organization to dispense the resources. They suggested instead that the monies be provided directly to the participating Asian recipients. 61 The problem, Kaufman reports, was Japan: “With memories of World War II fresh in their minds, the countries of the region were reluctant to establish commercial relations with their former captors,” and, in addition, “they feared that their own interests would be dwarfed by an economically resurgent Japan supported by the United States.” 62
Given that the United States was pursuing a controversial embargo of most trade with Japan’s traditional critical commercial partner, China, and that most of the countries in the region were averse to reestablishing economic ties with Japan, the United States supported Japan through direct assistance and military procurement and through sponsorship of that country’s application to join the GATT. Japan became a member of the GATT in 1955, but almost half of its new partners immediately invoked the safeguard provisions of the agreement and severely limited Japanese access to their markets. 63 American support for Japan then turned to the more complete opening by the United States of its market to Japanese goods, as well as the continuation of massive U.S. military orders that had begun with the outbreak of the Korean war in June 1950. 64 Thus, while the United States sought to promote Asian regionalism in the early to mid-1950s, Japan’s potential partners rejected this option. They, as Germany’s partners in Western Europe, were extremely fearful and suspicious of Japan. But unlike Germany’s European partners, they could not overcome that fear and suspicion and undertake the construction of institutionalized regional economic ties with their former oppressor.
This difference in outcomes was surely due in part to the fact that Germany was not so far ahead of its European partners economically as Japan was in comparison to its Asian neighbors. But, in addition, in the early-to-mid 1950s such countries as South Korea and the Philippines did not need direct Japanese military support, and the United States also did not believe it needed Japan to help support these countries. 65 As noted above, the geographic circumstances and military situation in Western Europe—Germany as a front-line state in the West’s stand against the USSR, and the need perceived by Germany’s neighbors for that country’s industrial and military capabilities in order to make that stand—served in part to catalyze an interest on the part of those neighbors in constructing European institutions as a way of managing the reconstitution of German power. In contrast, the geographic and political-military conditions that obtained in East Asia at the outset of the Cold War made Japan a less important potential partner for the United States and for the noncommunist countries in the region. 66 As an island-nation, Japan itself was less vulnerable to direct conventional military threats from the Soviet Union than was West Germany. Moreover, resolution of Japanese security concerns (for example, internal subversion) would not directly affect the capacity of other noncommunist countries in the region to defend themselves. 67 In addition, for these countries, American hegemonic air and naval and nuclear power was seemingly sufficient to maintain their security. There was, by consequence, little interest on the part of these countries in security ties with Japan. 68 Finally, while the United States saw German conventional military re-entry into the European power equation as vital to its defense strategy for the continent, the United States was able to devise for Japan an important role in America’s Asian strategy—most importantly, permitting the establishment of huge American air and naval bases on Japanese soil on the basis of the U.S.-Japanese Security Treaty of 1952—without needing that country to take on more affirmative roles or, relatedly, to be a part of formal security arrangements with its Asian neighbors. 69
Thus, while constraints on American power led the United States in the first half of the 1950s to promote regional institutionalization in Western Europe as a way of incorporating German power into Western defenses, American military and economic hegemony in East Asia in the mid-1950s made such institutionalization of Japanese power unnecessary in its part of the world. 70 The United States appeared in those first years of the Cold War to be able to extend effective security guarantees to Asian countries without Japan’s direct assistance, and American security guarantees to both Japan and its neighbors made it less necessary for Japan and those neighbors to reconcile and develop more advanced modes of formal cooperation among themselves. When Malaysia urged its East Asian neighbors to begin to think about Japanese-led regional institutionalization in the early 1990s, those countries had no track record of active collaboration with that country, and because Japan and its neighbors had had no material need to effect reconciliation with one another, the former still evoked hostility and suspicion in the latter. At the same time, while the United States was not so hegemonic economically that it could tolerate what it thought might become an exclusivist economic bloc, it was still important enough to those Asian countries, including the core potential regional partner, Japan, to terminate or at least delay the establishment of an arrangement.
Implications for Realist Theory and American Policy
Modern realist international theory has placed a great deal of emphasis on the polarity of the international system as a master-cause of differences in state behavior. By consequence, the end of the Soviet-American Cold War during 1989 and 1990, and the end thereby of bipolarity (and if that did not end bipolarity, then surely the collapse of the USSR in 1991 did) should have had profound consequences not just for the United States and Russia, but also for such important second-tier powers as Germany and Japan. 71 It might have been expected that the profound changes at the international structural level would prompt changes in the preferences of these important second-tier countries regarding regional institutionalization. Yet, as suggested above, one observes not change but continuity: Germany was interested in economic institutions before 1989–91, and has remained so after those watershed years; Japan was disinclined to support formal regional arrangements before the great transition, and has remained uninterested in such arrangements. Thus, something besides polarity and polarity shifts must be influencing German and Japanese preferences for regional institutions.
The analysis of this chapter suggests that, whatever might be the actual efficacy of polarity arguments in modern realist theory, those arguments ought to be supplemented by other realist propositions, at least in regard to the question of regionalism. There are at least two such arguments that are not grounded in realism’s focus on how particular distributions of power in the international system affect state preferences and behavior, but are related to realism’s core ideas that in the context of interstate anarchy, differences in state power and differences in political-military circumstances sharply delimit the preferences and actions of states both in the military field and in the international political economy.
First, and with respect to the sources of state power in the anarchical international environment, earlier realist arguments about the impact of asymmetries in interdependence on national influence ought to be given renewed attention in contemporary realist theory. The discussion in this chapter suggests that it is precisely such asymmetries in the trade field that have made Japan vulnerable to American pressures regarding East Asian economic institutionalization. Second, this discussion underlines the core realist view that political-military conditions and circumstances decisively affect the range of economic relationships that states may pursue and attain. In the present case, the intersection of the Cold War in Europe and NATO’s need for a German military contribution to manage that conflict helped to bring about the initiation and flourishing of West European institutionalized cooperation in the economic realm; in contrast, the onset of the Cold War in Asia and the United States’ capacity to carry out that struggle on its own probably doomed institutionalized economic cooperation among countries in that part of the world.
Finally, this discussion highlights the point, which is not necessarily based on realist ideas, that differences in political-military strategies in one period may have lasting, path-determining consequences on later opportunities for institutional development among countries that otherwise share common interests. That is, even if the United States were not actively to oppose the formation of an East Asian arrangement at present, it is quite likely that the manner in which regional relationships evolved during the Cold War has left the East Asian countries ill positioned to build such a bloc. For example, one main consequence of the combination of Cold War conflicts and American bilateralist economic and security ties with key countries in East Asia is that the area is now characterized by a remarkably low level of institutionalization either among governments or among private actors. 72 This characteristic of the region in turn reduces the opportunities for the “nesting” of new arrangements in more established frameworks, and the possibilities for the development of the habits of trust and cooperation—that is, international “social capital”—needed to pursue such arrangements. 73
Regarding policy implications, the diplomacy surrounding the EAEG and the EAEC makes it clear that the United States is adamantly opposed to an exclusively East Asian economic arrangement, and that it still retains the capacity to derail efforts aimed at the formation of any such arrangement. Yet, it is possible that if the EU or NAFTA (or an expanded agreement covering the bulk of the Americas) were to turn seriously inward, or, even more ominously, if the United States were to press Japan too vigorously on bilateral trade matters, then as a defensive measure Japan might turn seriously to institutionalized regionalism in East Asia. Hence, we are brought back to the point that Japan’s preferences for regionalism in East Asia are now and will continue to be driven by perceptions of America’s policy toward Asia. If the United States were to persuade itself that multilateralism through the new World Trade Organization (WTO) is ineffective, or that strong forms of regionalism might spur progress in multilateralism, then the resulting U.S. tilt away from the WTO might well prompt Japan to undertake the formation of a closed bloc in East Asia. 74 If this were to occur, the consequences would be highly damaging to the world trading system: the EU would in all likelihood accentuate its more closed as opposed to its more liberal characteristics, and the United States in turn might respond to developments in both areas with even stronger regional projects of its own and more strident unilateralism around the world.
Thus, the United States must be especially careful in exercising its continuing great power in world economic matters. If there is a risk that regionalism might evolve in the years ahead in ways harmful to the multilateral trade order, the magnitude of that risk is probably being determined not by dynamics in East Asia or even in Western Europe, but by choices made by the United States. The United States today and for the foreseeable future is the only country that can sustain or seriously threaten the world economic order; its decisions will determine to a disproportionate degree whether the international economy will become more or less open in the years to come.
Acknowledgment
I thank Peter Feaver for suggesting that I seek to connect current trends in regionalism to U.S. political-military decisions during the early years of the Cold War. I also thank Ajin Choi and Imke Risopp-Nickelson for their excellent research assistance, and Eric Heginbotham, Ole Holsti, Ethan Kapstein, Kozo Kato, G. John Ikenberry, Michael Mastanduno, David Priess, Randall Schweller, Scott Cooper, and Beth Simmons for their helpful comments on an earlier draft of the paper. I thank the Josiah Charles Trent Foundation and the Duke University Arts and Sciences Research Council for their generous financial support for this project.
Endnotes
Note 1: See Lester Thurow, Head to Head: The Coming Battle Among Japan, Europe, and America (New York: Morrow, 1992), 11–25, 65. Back.
Note 2: Citing data from the World Trade Organization (WTO), the Economist reported in 1995 that of the total of 109 regional trade arrangements notified to the GATT/WTO between 1948 and 1994, approximately one-third were established between 1990 and 1994: see “The Right Direction?,” Economist, September 16, 1995: 23–24. For helpful analyses of trends in economic regionalism as of the early 1990s, see Jeffrey J. Schott, “Trading Blocs and the World Trading System,” The World Economy 14 (March 1991): 1–18; Robert C. Hine, “Regionalism and the Integration of the World Economy,” Journal of Common Market Studies 30 (June 1992): 115–122); International Monetary Fund, “Regional Trading Arrangements,” annex to World Economic Outlook (Washington, May 1993), 106–115; Vinod K. Aggarwal, “Comparing Regional Cooperation Efforts in the Asia-Pacific and North America,” in Andrew Mack and John Ravenhill, eds., Pacific Cooperation: Building Economic and Security Regimes in the Asia-Pacific Region (Boulder, CO: Westview Press, 1995), 40–65; and Stephan Haggard, Developing Nations and the Politics of Global Integration (Washington: Brookings Institution, 1995). Back.
Note 3: These efforts are described in John Whalley, “CUSTA and NAFTA: Can WHFTA Be Far Behind?,” Journal of Common Market Studies 30 (June 1992): 125–41; Luigi Manzetti, “Economic Integration in the Southern Cone,” North-South Focus (North-South Center, University of Miami, December 1992); Bill Hinchberger, “Mercosur on the March,” Institutional Investor 27 (March 1993): 107–12; Sebastian Edwards, “Latin American Economic Integration: A New Perspective on an Old Dream,” World Economy 16 (May 1993): 317–38; Gary Clyde Hufbauer and Jeffrey J. Schott, with Diana Clark, Western Hemisphere Economic Integration (Washington: Institute for International Economics, 1994), especially pp. 97–129; and Felix Pena, “New Approaches to Economic Integration in the Southern Cone,” The Washington Quarterly 18 (3) (Summer 1995): 113–22. Back.
Note 4: For additional arguments highlighting the limitations on what Miles Kahler calls “hard” regionalism through formal institutions in Asia (and the Americas), see Kahler, “A World of Blocs: Facts and Factoids,” World Policy Journal 12 (Spring 1995): 19–27, and especially p. 24; Robert A. Manning and Paula Stern, “The Myth of the Pacific Community,” Foreign Affairs 73 (November/December 1994): 79–93; and Peter J. Katzenstein, “Regionalism in Comparative Perspective,” Cooperation and Conflict 31 (June 1996): 123–59. Jeffrey Schott foresaw at the beginning of the 1990s that prospects for East Asian hard regionalism were unfavorable: see Schott, “Trade Blocs and the World Trade System,” pp. 14–15. Even Lester Thurow expressed doubts about a Japan-based economic block in the Pacific Rim: see Head to Head: 250–51. Back.
Note 5: For this view see, for example, Rolf J. Langhammer, “ASEAN Economic Co-operation: A Stock-Taking,” ASEAN Economic Bulletin 8 (November 1991): 147; Ippei Yamazawa, “On Pacific Economic Integration,” Economic Journal 102 (November 1992): 1525; and Bilson Kurus, “Agreeing to Disagree: The Political Reality of Asean Economic Cooperation,” Asian Affairs 20 (Spring 1993): 28–41. In February 1992 the ASEAN countries agreed to cut trade barriers through an ASEAN Free Trade Area (AFTA), but they have encountered serious implementation problems: see Michale Vatikiotis, “Market or Mirage,” Far Eastern Economic Review (April 15, 1993): 48–50; “Malaysia: List Threatens AFTA,” Business Times (Malaysia), Nexis, April 29, 1995; and “ASEAN Differences Over Tariff Cuts For Raw Farm Products May Drag On,” BNA International Trade Daily, Nexis, May 5, 1995. Back.
Note 6: For a useful analysis of APEC’s goals and strategies, see Gary Hufbauer and Jeffrey J. Schott, “Toward Free Trade and Investment in the Asia-Pacific,” The Washington Quarterly 18 (Summer 1995): 37–45. On the diplomacy surrounding the establishment of APEC, see Andrew Elek, “The Challenge of Asian-Pacific Economic Cooperation,” The Pacific Review 4 (4) (1991), especially pp. 324–26. Back.
Note 7: For overviews of the diplomacy surrounding the construction of European regional institutions, see F. Roy Willis, France, Germany, and the New Europe, 1945–1967 (Stanford: Stanford University Press, 1968); John Gillingham, Coal, Steel, and the Rebirth of Europe, 1945–1955: The Germans and the French From Ruhr Conflict to European Community (Cambridge: Cambridge University Press, 1991); and Derek W. Urwin, The Community of Europe: A History of European Integration Since 1945 (London and New York: Longman, 1991). It should be noted that the Federal Republic of Germany, established in 1949, was not part of the negotiations leading in April 1948 to the establishment of the first key post-World War II Western European economic organization, the Organization for European Economic Cooperation (OEEC), which coordinated efforts by Western European countries to make use of reconstruction aid provided by the United States under the auspices of the Marshall Plan. Back.
Note 8: See Andrew Moravcsik, “Negotiating the Single European Act: National Interests and Conventional Statecraft in the European Community,” International Organization 45 (Winter 1991): 19–56; David R. Cameron, “The 1992 Initiative: Causes and Consequences,” in Alberta M. Sbragia, ed., Euro-Politics: Institutions and Policymaking in the “New” European Community (Washington: Brookings Institution, 1992), 23–74; and Geoffrey Garrett, “International Cooperation and Institutional Choice: The European Community’s Internal Market,” International Organization 46 (Spring 1992): 533–60. Back.
Note 9: On the overall development of European monetary cooperation see Loukas Tsoukalis, The Politics and Economics of European Monetary Integration (London: Allen Unwin, 1977); Peter Ludlow, The Making of the European Monetary System (London: Butterworth, 1982); Jonathan Story, “The Launching of the EMS: An Analysis of Change in Foreign Economic Policy,” Political Studies 36 (1988): 397–412; and especially Horst Ungerer, A Concise History of European Monetary Integration: From EPU to EMU (Westport, CT: Greenwood, 1997). On the negotiations surrounding the Maastricht Treaty and EMU, see, in addition to Ungerer, Wayne Sandholtz, “Choosing Union: Monetary Politics and Maastricht,” International Organization 47 (Winter 1993); and Joseph M. Grieco, “State Interests and Institutional Rule Trajectories: A Neorealist Interpretation of the Maastricht Treaty and European Economic and Monetary Union,” Security Studies 5 (Spring 1996): 176–222. Back.
Note 10: See George Kolankiewicz, “Consensus and Competition in the Eastern Enlargement of the EU,” International Affairs 70 (July 1994): 488–90; Lily Gardner Feldman, “Germany and the EC: Realism and Responsibility,” Annals of the American Academy of Political and Social Science 531 (January 1994): 40–41; and especially Michael Mihalka, “The Bumpy Road to Western Europe,” Transition: Issues and Developments in the Former Soviet Union and East-Central and Southeastern Europe 1 (January 30, 1995): 72–78. Back.
Note 11: For a helpful analysis of the background to Malaysia’s EAEG proposal, see Linda Low, “The East Asian Economic Grouping,” The Pacific Review 4 (1991): 375–82. Back.
Note 12: This list was reported in UPI, “Malaysia Pushes for New Trade Bloc,” UPI International, Nexis, February 1, 1991. Back.
Note 13: “Japan Seen as Leader of New Group, Trade Official Says,” Kyodo News Service, Nexis, April 1, 1991. Back.
Note 14: ”Singapore Supports Formation of Asian Economic Group,” Kyodo News Service, Nexis, January 13, 1991; “Singapore Urges Japan to Join EAEA [sic],” Jiji Press Ticker Service, Nexis, August 15, 1991; also Haggard, Developing Nations and Global Integration, 68. Back.
Note 15: “Indonesia Wants to Study East Asian Trading Bloc Plan,” Reuters: Reuters Library Report, Nexis, January 8, 1991. One problem regarding Mahathir’s proposal was that he had failed to consult with Indonesia or other ASEAN partners prior to presenting the EAEG idea at an official dinner in China. On Indonesia’s resentment about this, see “Mahathir Hints East Asia Economic Group Lacks Consensus,” Kyodo News Service: Japanese Economic Newswire, Lexis, October 7, 1991; and Bilson Kurus, “The ASEAN Triad: National Interest, Consensus-Seeking, and Economic Cooperation,” Contemporary Southeast Asia 16 (March 1995), especially pp. 409–410. Back.
Note 16: Lai Kwok Kin, “Kaifu Sidesteps Controversial Asian Economic Group,” Reuters Money Report, Nexis, April 28, 1991. Back.
Note 17: “Tokyo Cold Shoulders East Asian Economic Group,” Agence France Presse, Nexis, May 21, 1991; and Charles P. Wallace, “Southeast Asia Warms to Trade-Bloc Plan,” Los Angeles Times, Nexis, June 1, 1991, which also includes part of the Kaifu statement quoted in the text. Back.
Note 18: “Mahathir Hints East Asia Economic Group Lacks Consensus,” Kyodo News Service: Japan Economic Newswire Nexis, October 7, 1991; Lai Kwok Kin, “Asia to Speak Out on Trade Through New Caucus,” Reuters, Nexis, October 9, 1991; and Moon Ihlwan, “Indonesia Seeks to Refine Regional Forum Plan,” Reuters: Reuter Library Report, Nexis, January 27, 1992. Back.
Note 19: “Japan Links EAEC and Regional Security,” Kyodo News Service: Japan Economic Newswire, Nexis, November 12, 1991. Back.
Note 20: Bill Tarrant, “Malaysia, Indonesia to Promote East Asian Trade Group,” Reuters: Reuter Library Report, Nexis, July 17, 1993. Back.
Note 21: Lai Kwok Kin, “Mahathir Asks Japan to Back East Asian Caucus,” Reuter Asia-Pacific Business Report, Nexis, January 14, 1993; “Miyazawa Urges Support U.S.-Backed APEC, Rejecting Malaysian Call for Asia Bloc,” International Trade Reporter, Nexis, January 27, 1993; and Moon Ihlwan, “U.S., Japan, S. Korea Still Wary of Asia Caucus,” Reuters: Reuter Library Report, Nexis, July 27, 1993. Back.
Note 22: See “Australia, New Zealand Denied EAEC Membership, Mahathir Says,” BNA International Trade Daily, Nexis, May 30, 1995. Back.
Note 23: K. T. Arasu, “Japan All But Rules Out Joining EAEC,” Reuter European Business Report, Nexis, July 31, 1995; and “Malaysia Disappointed with Japan’s Stance on EAEC,” Kyodo News Service: Japan Economic Newswire, Nexis, August 3, 1995. Back.
Note 24: See, for example, “Mahathir Says Japan Not Needed to Start Asia Group,” Reuters World Service, Nexis, October 25, 1994. Back.
Note 25: See “Japan Tentatively Decides to Skip Meeting for East Asian Economic Group,” BNA International Trade Daily, Nexis, April 12, 1995; and Nusara Thaitawat, “Thailand: ASEAN Postpones Informal EAEC Meet,” Bangkok Post, in Reuter Textline, Nexis, April 13, 1995. Back.
Note 26: See Karl Schoenberger, “Asia Seeks Leading Role in Pacific’s Destiny,” Los Angeles Times, Nexis, October 21, 1991; Satoshi Isaka, “Tokyo Mulls Participation in East Asian Economic Caucus,” Nikkei Weekly, Nexis, January 10, 1994. It should be noted that China also offered some support for East Asian regional institutionalization: see “China Supports East Asian Trade Group,” Agence France Presse, Nexis, June 14, 1993, in which a Chinese Foreign Ministry spokesman said after a meeting between Prime Minister Mahathir and Premier Li Peng that the latter “in the most explicit terms expressed his support for that proposal advanced by Malaysia.” Also see Ho Kay Tat, “China Will Back EAEC Even If Japan Opts Out,” Business Times, Nexis, November 12, 1994. Back.
Note 27: See “Japan to Attend Informal ‘EAEC Luncheon’ in Bangkok,” Agence France Presse, Nexis, July 22, 1994; and Siti Rahil, “Japan Joins ‘EAEC Luncheon’ but not EAEC,” Kyodo News Service: Japan Economic Newswire, Nexis, August 1, 1994. Back.
Note 28: See “Japan Warming Up to EAEC, Says Takemura,” Agence France Presse, Nexis, January 13, 1995. Back.
Note 29: “Kaifu Favors Japan Joining EAEC,” Daily Yomiuri, Nexis, February 2, 1995. Back.
Note 30: On the general debate about Asia vs. America in Japan’s foreign policy, see Eugene Brown, “The Debate Over Japan’s Strategic Future,” Asian Survey 33 (June 1993): 543–59. The interest in the EAEC proposal by the Japanese foreign policy officials who are Asia-oriented is reported by Eric E. Heginbotham and Richard J. Samuels, “Mercantile Realism and Japanese Foreign Policy During and After the Cold War,” in this volume. Back.
Note 31: See “Japanese Business Group Considers Urging Government to Join EAEC,” Agence France Presse, Nexis, December 7, 1994; “In Japan, A Swing Toward Fellow Asians and Away from the West,” International Herald Tribune, Nexis, December 12, 1994; Nobuyuki Oishi, “Keidanren Officials Step Behind EAEC,” Nikkei Weekly, Nexis, December 19, 1994. Back.
Note 32: This line of analysis is derived from functionalist international theory, which suggests that governments are most likely to accept the need for and costs of establishing institutions if, and as, the latter meet specific needs arising from some form of functionally-specific international interaction involving mutual interests. For the early functionalist argument about institutions, see David Mitrany, A Working Peace System: An Argument for the Functional Development of International Organization, rev. ed. (London: Oxford University Press for the Royal Institute of International Affairs, 1944). This functional logic was applied to the question of formal regional institutionalism in Western Europe in the 1950s and 1960s by such scholars as Ernst Haas and Philippe Schmitter, and in the 1980s its was applied to broader, multilateral regimes by such scholars as Robert Keohane. See Ernst B. Haas, The Uniting of Europe: Political, Social, and Economic Forces, 1950–1957 (Stanford: Stanford University Press, 1958); Haas, “Technology, Pluralism, and the New Europe,” in Joseph S. Nye, Jr., ed., International Regionalism (Boston: Little, Brown, 1968), 149–76; and Philippe Schmitter, “Three Neo-Functional Hypotheses,” International Organization 23 (Winter 1969): 161–67. On regime theory see Robert O. Keohane, After Hegemony: Cooperation and Discord in the World Political Economy (Princeton: Princeton University Press, 1984). Back.
Note 33: The discussion in this volume by Heginbotham and Samuels, “Mercantile Realism and Japanese Foreign Policy,” also places emphasis on continuity as opposed to change in Japanese foreign policy since the end of the Cold War. Back.
Note 34: I present this argument more fully in “Systemic Sources of Variation in Regional Institutionalization in Western Europe, East Asia, and the Americas,” in Edward Mansfield and Helen Milner, eds., The Political Economy of Regionalism (New York: Columbia University Press, 1997), 164–87. In that essay I also suggest that in terms of trade dependence, Germany does not occupy a very different position in Western Europe (18.3% of EU exports go to that country) than does Japan in relationship to the countries that would have formed the EAEG/EAEC (Japan receives 14.6% of their exports). Back.
Note 35: On this general point see Peter J. Katzenstein and Nobuo Okawara, “Japan’s National Security: Structures, Norms, and Policies,” International Security 17 (Spring 1993): 84–118; and Peter Preston, “Domestic Inhibitions to a Leadership Role for Japan in Pacific Asia,” Contemporary Southeast Asia 6 (March 1995): 355–74. Back.
Note 36: See “Malaysia Pushes for New Trade Bloc,” United Press International, Nexis, February 5, 1991; “U.S. Reaction to Proposal for East Asian Economic Group,” Central News Agency, Nexis, March 15, 1991. Back.
Note 37: Charles P. Wallace, “Regional Economics: Southeast Asia Warms to Trade-Bloc Plan,” Los Angeles Times, Nexis, June 1, 1991. Back.
Note 38: “Japan Asked Not to Back Mahathir’s Scheme,” Jiji Press Ticker Service, Nexis, November 5, 1991. The United States did not mince words about its expectation that the EAEG should not be pursued: at an APEC meeting in Seoul in November, Secretary Baker is reported to have said to Korean Foreign Minister Lee Sang Ock that “Malaysia didn’t spill blood for this country—but we did.” See Don Oberdorfer, “U.S. Lobbies Against Malaysian Trade Plan,” Washington Post, Nexis, November 14, 1991. Back.
Note 39: Siti Rahil, “U.S. Tells Japan it Opposes EAEC,” Kyodo News Service: Japanese Economic Newswire, Nexis, June 15, 1994. Back.
Note 40: “Proposal on Asian Trade Bloc Called Surprisingly Detailed,” BNA International Trade Daily, Nexis, July 21, 1994. Back.
Note 41: Anthony Rowley, “US Warns Against Its Exclusion from Proposed EAEC,” Business Times, Nexis, September 5, 1995; also see comments by Jeffrey Garten, Undersecretary of Commerce, reported in Agence France Presse, Nexis, September 22, 1995. Back.
Note 42: “Japan Links EAEC and Regional Security.” Back.
Note 43: Satoshi Isaka, “Japan Under Pressure to Take Sides on Trade Caucus,” Nikkei Weekly, Lexis, July 25, 1994. Back.
Note 44: See “Japan Tentatively Decides to Skip Meeting for East Asian Economic Grouping.” Back.
Note 45: K. T. Arasu, “Japan All but Rules Out Joining EAEC.” Back.
Note 46: See Tim Josling, “Agricultural Trade Issues in Transatlantic Trade Relations,” World Economy 16 (September 1993): 553–74; Youri Devuyst, “GATT Customs Union Provisions and the Uruguay Round: The European Community Experience,” Journal of World Trade 26 (February 1992), especially pp. 25–26; and Jon Filipek, “Culture Quotas: The Trade Controversy Over the European Community’s Broadcasting Directive,” Stanford Journal of International Law (Spring 1992): 323–70. Back.
Note 47: All quotations in this paragraph are reported in Schoenberger, “Asia Seeks Leading Role in Pacific’s Destiny.” Back.
Note 48: Albert O. Hirschman, National Power and the Structure of Foreign Trade (Berkeley: University of California Press, 1969), 13–40; Kenneth N. Waltz, “The Myth of National Interdependence,” in Charles P. Kindleberger, ed., The International Corporation: A Symposium (Cambridge: MIT Press, 1969), 205–23; and Waltz, Theory of International Politics (Reading: Addison-Wesley, 1979), 152–60. Back.
Note 49: On the potential danger of a Chinese threat to East Asian security and stability, see Aaron L. Friedberg, “Ripe for Rivalry: Prospects for Peace in a Multipolar Asia,” International Security 18 (Winter 1993/94): 5–33; Richard K. Betts, “Wealth, Power, and Instability: East Asia and the United States After the Cold War,” International Security 18 (Winter 1993/94): 34–77; Dennis Roy, “Hegemon on the Horizon? China’s Threat to East Asian Security,” International Security 19 (Summer 1994): 149–68; Gerald Segal, “East Asia and the “Constrainment” of China,” International Security 20 (Spring 1996): 107–35; David Shambaugh, “Containment or Engagement of China? Calculating Beijing’s Responses,” International Security 21 (Fall 1996): 180–209; and Allen Whiting, “Asean Eyes China: the Security Dimension,” Asian Survey 37 (April 1997): 299–322. Back.
Note 50: On the manner in which U.S. national security interests and constraints at the outset of the Cold War fundamentally shaped U.S. preferences and policies as it constructed the post-World War II international economic order, see Robert Gilpin, U.S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment (New York: Basic, 1975). For an important recent investigation of the ways in which alliance relations of states drive their commercial integration, see Joanne Gowa, Allies, Adversaries, and International Trade (Princeton: Princeton University Press, 1994). Back.
Note 51: G. John Ikenberry, “Rethinking the Origins of American Hegemony,” Political Science Quarterly 104 (1989): 375–400. Back.
Note 52: On the centrality of West German conventional forces to NATO strategy—a point that was seen even as the German army was just being reconstituted in the early 1950s—see Wolfram F. Hanrieder, Germany, America, Europe: Forty Years of German Foreign Policy (New Haven: Yale University Press, 1989), 40–42. Back.
Note 53: For an overview of U.S. internal documents highlighting the support of the United States for European cooperation as a way of both strengthening Europe and dealing with German power, see Geoffrey Warner, “Eisenhower, Dulles, and the Unity of Western Europe, 1955–1957,” International Affairs 69 (April 1993): 319–29. For interesting recent analyses of this point that are closely based on primary sources, see Klaus Schwabe, “The United States and European Integration, 1947–1957,” and Gustav Schmidt, “ ‘Tying’ (West) Germany into the West—But to What? NATO? WEU? The European Community?,” both in Clemens Wurm, Western Europe and Germany: The Beginnings of European Integration, 1945–1960 (Oxford and Washington: Berg Publishers, 1995), 115–35 and 137–74. Back.
Note 54: In this regard it should be stressed that the idea that institutionalization served as a postwar strategy by which France and other European countries sought to limit and channel German power was articulated in early postwar realist thinking about European economic cooperation, that is, in Hans Morgenthau’s discussion of the European Coal and Steel Community in the second edition of his Politics Among Nations: The Struggle for Power and Peace (New York: Knopf, 1958), 497–98, and his discussion of the European Communities in the third (1966) edition, pp. 531–34. Back.
Note 55: For historical analyses of early postwar European economic cooperation in which the problem of managing German power is a focus of attention, see Michael Hogan, The Marshall Plan: America, Britain, and the Reconstruction of Western Europe, 1947–1952 (Cambridge: Cambridge University Press, 1987), especially p. 64; and Gillingham, The Rebirth of Europe, 174, 364–66. On Western European efforts—themselves prompted by significant U.S. pressure to bring about German rearmament—to build a uniquely European defense entity between 1950 and 1954 that would include but constrain Germany, the failure of that effort, and the subsequent admission of Germany into NATO at the end of 1954, see Willis, France, Germany, and the New Europe, 130–197. Back.
Note 56: The recognition by West Germany’s Chancellor Konrad Adenauer that Germany’s partners needed that country’s conventional capabilities, and wanted them incorporated and constrained through institutions, and that this approach afforded the new West German state important political and diplomatic opportunities in European affairs, is discussed in Hanrieder, Germany, America, Europe, 9, 38–39. Similarly, Adenauer recognized that European economic institutions presented important opportunities for Germany to reintegrate itself in European diplomacy; see Hanreider pp. 233–34, 246–48. Back.
Note 57: See, for example, Lionel Barber, “Bonn Sets Agenda for Monetary Union,” Financial Times (October 2, 1995): 2. Back.
Note 58: For an interesting comparison of Germany and Japan in the early Cold War, see James R. Kurth, “The Pacific Basin Versus the Atlantic Alliance: Two Paradigms of International Relations,” The Annals of the American Academy of Political and Social Science 505 (September 1989), especially p. 36. Back.
Note 59: See William S. Borden, The Pacific Alliance: United States Foreign Economic Policy and Japanese Trade Recovery, 1947–1955 (Madison: University of Wisconsin Press, 1984), 109–42. Back.
Note 60: Burton I. Kaufman, “Eisenhower’s Foreign Economic Policy with Respect to East Asia,” in Warren I. Cohen and Akira Iriye, eds., The Great Powers in East Asia 1953–1960 (New York: Columbia University Press, 1990), 106–7. Back.
Note 63: On the importance assigned in 1955 by the Eisenhower Administration to obtaining Japan’s acceptance by a reluctant GATT membership, see Borden, Pacific Alliance, 179–80. Back.
Note 64: On the vital role of U.S. military orders in Japan’s economic recovery between 1950 and 1952, see Richard J. Samuels, “Rich Nation, Strong Army”: National Security and the Technological Transformation of Japan (Ithaca: Cornell University Press, 1994), especially pp. 133–43; Borden, Pacific Alliance, 143–49; Kaufman, “Eisenhower’s Foreign Economic Policy,” pp. 116–17; and Richard B. Finn, Winners in Peace: MacArthur, Yoshida, and Postwar Japan (Berkeley: University of California Press, 1992), 267–79. Back.
Note 65: For a useful discussion of Japan’s role in the Cold War, see Barry Buzan, “Japan’s Defense Problematique,” The Pacific Review 8 (1) (1995), especially pp. 29–31. Finn points out that the outbreak of the Korean War did lead to a decision by General MacArthur, as supreme commander of the allied powers in Japan, to bring about a limited rearmament of Japan; however, these forces had no power-projection capability; see Finn, Winners in Peace, 263–66. Back.
Note 66: On the impact that differences in geography made on the military problems facing the United States in Western Europe and Asia with the onset of the Cold War, see Betts, “Wealth, Power, and Instability,” p. 45, at which he argues that “The conventional Soviet military threat was more manageable in Asia than it was in Europe.” Back.
Note 67: On the impact of geography on Japan’s strategic interests in world politics after the Pacific War, see Buzan, “Japan’s Defense Problematique,” especially pp. 25–26. Back.
Note 68: On this point see Donald Crone, “Does Hegemony Matter? The Reorganization of the Pacific Political Economy,” World Politics 45 (July 1993): 507. Back.
Note 69: For a helpful discussion of the negotiation of the U.S.-Japan security treaty, as well as Japan’s peace treaty with the United States and other allied powers, see Finn, Winners in Peace, 270–312. Back.
Note 70: For this argument in regard to Asia see Crone, “Does Hegemony Matter?,” pp. 501–25. Back.
Note 71: For powerful arguments along these lines, see John J. Mearsheimer, “Back to the Future: Instability in Europe After the Cold War,” in Sean Lynn-Jones and Steven E. Miller, eds., The Cold War and After: Prospects for Peace, expanded edition (Cambridge: MIT Press, 1994), 141–92; and Kenneth N. Waltz, “The Emerging Structure of International Politics,” International Security 18 (Fall 1993): 44–79. Back.
Note 72: As Barry Buzan and Gerald Segal suggest, “Perhaps the most alarming aspect of East Asian security is the virtual absence of effective multilateralism,” and they go on to observe that, “What is distinctive about Asia is its combination of several industrialised societies with a regional international society so impoverished in its development that it compares poorly with even Africa and the Middle East.” See Barry Buzan and Gerald Segal, “Rethinking East Asian Security,” Survival 36 (Summer 1994): 15. Back.
Note 73: On the concept of nesting, see Vinod Aggarwal, Liberal Protection: The International Politics of Organized Textile Trade (Berkeley: University of California Press, 1985). Aggarwal uses his nesting logic to reach the conclusion that APEC has been an extremely weak regime: see “Comparing Regional Cooperation Efforts in the Asia-Pacific and North America,” in Andrew Mack and John Ravenhill, eds., Pacific Cooperation: Building Economic and Security Regimes in the Asia-Pacific Region (Boulder, CO: Westview Press, 1995), especially p. 51. In this I am drawing upon the insights of Miles Kahler, who, basing his analysis on Robert Putnam’s work on social capital, makes the important point that the Pacific region as a whole is characterized by a low level of interstate social capital: see Kahler, “Institution Building in the Pacific,” in Mack and Ravenhill, eds., Pacific Cooperation, 29–30; and Putnam, with Robert Leonardi and Raffaella Y. Nanetti, Making Democracy Work: Civic Traditions in Modern Italy (Princeton: Princeton University Press, 1993). Back.
Note 74: On the possibility that the United States could overemphasize regionalism see Jagdish Bhagwati, “Regionalism Versus Multilateralism,” The World Economy 15(5) (September 1992), especially pp. 540–42. Back.
Unipolar Politics: Realism and State Strategies After the Cold War
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