Historical Overview of Japan's Trade and Industrial Policy around 2000

Author Name TAKEDA Haruhito (Faculty Fellow, RIETI)
Creation Date/NO. March 2016 16-J-026
Research Project Historical Study on Japan's Trade and Industrial Policy: From an international perspective
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This study focuses on the change in the principles of the Ministry of International Trade and Industry (MITI)'s policy around 2000 with the establishment of the Ministry of Economy, Trade and Industry (METI), looking back at policy development during 1970-2000. Corresponding to the change in the international economy, MITI's policy takes an important role in establishing a national macroeconomic policies framework, which was required to coordinate the balance between domestic economic problems and trade friction with the United States and the European Union. Moreover, paying attention continually to coordination between the freedom of business activity and macroeconomic policies, MITI tried to respond to the mission expected. The adopted policy has the same characteristic in that MITI materialized it through the promotion of deregulation. In doing so, MITI selected the policy means to cut deeply into structural problems such as trade conflict, environment problems, and energy problems, which resulted in MITI's policy to control government intervention and entrust the private sector and market coordination.

When the Japanese economy faced a recession in the 1990s, reforming the country's economic structure became the main political issue to restore economic vitality. MITI took on this issue as its own subjective mission and strived to tackle economic recovery and restore economic growth. MITI's measures taken showed flexibility in finding out the solutions for newly emerging issues, which extended to its previous policy making process. Although there was a decisive change of policy subject, deregulation and the limitation of government control were strengthened as the basic principle of policy.