Undoubtedly, firms are actors in international relations. However, the degree of their presence as actors is not clear. The problem is how much impact firms have on the central actor, government or state, and how much influence they exert on international phenomena. This paper analyses this question through a case study of the semiconductor trade conflicts, especially the Japan-U. S. frictions. That is, it examines how Japanese and American firms-government relationships have shifted and influenced international governance over the semiconductor trade.
The semiconductor trade developed under the GATT regime. The GATT regime was “embedded liberalism” and under common liberalism it approved some different firms-government relations of each nation. American firms and the government strongly supported free trade, which made their relationship weak. However, the Japanese firms-government relations were though their support for free trade was soft.
In the late 1970s, when the Japanese semiconductor export to America had expanded rapidly, some American firms began to criticize Japan not only for the quantity of her export but also for its industrial policy assisted by the Japanese firms-government connection. Their influence increased by traditional coalition-building, lobbying, and offering of the new idea, the structural impediments in Japanese markets. This idea questioned the availability of the GATT regime. Then it increasingly penetrated into/through the American government, and the Department of Commerce connected it with the orthodox liberalism and convinced the free traders. In Japan, the power of the firms were restrictive, which permitted the Ministry of International Trade and Industry to lead them. To solve the struggle, MITI attempted to respond to the demands of the American side, by using the industrial policy type intervention. However, faced with opposition from the Ministry of Foreign Affairs, the Japanese government adopted more moderate intervention. Consequently, in July 1986 both governments introduced voluntary import expansion (VIE) as a “numerical target” and export price restraints (VER), and solved the conflict through the governmental interventions.
These measures were also adopted between South Korea and the U. S., as well as Japan and EC, which was developed into sub-regimes. Thus, consequently, the composite trade governance was established in which the GATT regime and the sub-regimes coexisted. It at least had capabilities to keep the order in the semiconductor trades, with some managed outcomes, though partially.
The Japan-U. S. conflicts recurred, disputing the extension of the agreements. As some Japanese and American firms were dissatisfied with the governmental interventions, both governments modified the agreements. VIE·VER sub-regimes were stabilized by the modification.
In 1995, the issue of the renewal of the agreement arose again. With this background, the World Trade Organization (WTO) regime was created to strengthen liberalism, which dramatically enlarged firm-level cooperation between Japan and U. S. Japanese firms were willing to respond to this trend and suggested an idea of a new regime, “World Semiconductor Council”, which they attempted to achieve through a private diplomacy. MITI accepted the idea. It didn't mean that the government resigned its role, but instead it proposed a new governmental regime, “Global Government Forum”. In America, though firms maintained their power, the structural change fragmented their standpoints. As a result, the government could not take a clear stand. Accordingly, WSC·GGF sub-regimes based Japanese idea was constructed and the international trade governance was reorganized. The bilateral framework was practically diminished.
The conclusion is that: in the field of high technology, firms' political influence, which made government policy and international governance chang
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