Monetary and Economic Studies Vol.20, No.2 / April 2002

Has Japan Been Left Out in the Cold by Regional Integration?

Howard J. Wall

Despite the ongoing worldwide trend toward regional integration, Japan has remained outside of all regional trading agreements. Because more than 60 percent of Japan’s trade is with countries that are members of a major regional bloc, this reluctance may have had significant effects on its pattern and volume of trade. Indeed, I find that Japan’s exports have been reduced by the integration of its trading partners, and that this effect has been fairly uniform across integration regimes. I also find that regional trading agreements have tended to have a much more negative effect on Japanese trade than on the trade of other nonmembers.

Keywords: Regional integration; Japanese trade; Gravity model

Views expressed in the paper are those of the authors and do not necessarily reflect those of the Bank of Japan or Institute for Monetary and Economic Studies.

Copyright © 2002 Bank of Japan All Rights Reserved.

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