| This study seeks to explain the continuing strength of trade and investment barriers against foreign goods and companies in Japan and Korea. These barriers persist despite the increasing openness of both these economies to world trade and their joining free trade agreements. These trade barriers are no longer based on discriminatory tariffs, but include a range of non-tariff trade barriers (NTBs) created by government interventions, by the strategies of domestic firms and by consumer preferences. The importance of NTBs in limiting foreign investment and trade helps us explore the broader question of the place of national economic institutions and cultures in shaping economic development despite the homogenizing pressure of world market forces. East Asia is a region, which contains cultural and institutional divergences as well as similarities. Part of my research problem is to take account of the evident differences between East Asian nations in government-business relations, in indigenous business organizations (keiretsu and chaebol) and in consumption cultures and assess whether these differences affect the strength and characteristics of NTBs. If countries as similar as Japan and Korea in the strength of NTBs show interesting differences in the way that these are put into practice, then this provides additional evidence that local cultures and institutions have an important influence in economic development. For Japanese and Korean business and officials, NTBs are, to a considerable extent, invisible because they are part of the normal working of business and government-business relations. For foreign companies seeking to introduce their products, the NTBs are as solid as tariff barriers. For foreigners, eliminating barriers are simply a question of the good intentions of the Japanese or Korean governments. For those governments and their publics, the barriers are mainly the result of the lack of initiative, skill and commitment on the part of foreigners in marketing their products. Global markets do not, I argue, bring common global interpretations of what is meant by competition or freedom of the market. |
