EC-Japanese Relations: In Search of a Partnership

Trade tensions have dominated relations between Japan and the European Community. Efforts by both Japan and the EC to develop a more balanced relationship culminated in the EC-Japan declaration of 1991, but trade issues continue to threaten moves towards clear and mutually beneficial relations. This paper contributes to a better understanding of the underlying factors, as both partners accuse each other of "unfair" trade policies and practices. Based on detailed studies of the electronics, automobile, financial services and pharmaceutical sectors, the paper argues that contrasting Japanese and European perceptions of the "rules of the game" or "fairness" are shaped less by cultural differences than by factors such as relative competitiveness, structural characteristics and different attitudes towards the codification of rules and regulations. The paper suggests future policy initiatives that might be taken by both Japanese and European Community policy-makers to accommodate differences and promote convergence.