Working Paper: NBER ID: w10173
Authors: Shujiro Urata; Kozo Kiyota
Abstract: This paper attempts to examine the impact of an East Asia FTA on trade patterns in East Asia by using a multi-sector computable general equilibrium model. The model used in this analysis is the standard GTAP model and GTAP database developed by Hertel (1997) and his colleagues of Purdue University. Our findings are summarized as follows: First, the impacts of an East Asia FTA on GDP and welfare of member countries are generally positive, while the impacts on non-members are negative. Second and surprisingly, the FTA does not seem to affect much on the patterns of comparative advantage or intra-industry trade. Third, production of the sectors with a comparative advantage increases. Fourth, unexpectedly exports of protected sectors increase, reflecting a shift in incentives from domestic sales to export sales. Finally, an East Asia FTA will promote regionalization in East Asia but it will not necessarily promote regionalization in AFTA.
Keywords: No keywords provided
JEL Codes: F17; F13; F15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| East Asia FTA (F15) | GDP of member countries (O52) |
| East Asia FTA (F15) | GDP of non-member countries (F29) |
| East Asia FTA (F15) | patterns of comparative advantage (F11) |
| East Asia FTA (F15) | patterns of intra-industry trade (F12) |
| East Asia FTA (F15) | production in sectors with comparative advantage (F14) |
| East Asia FTA (F15) | exports from protected sectors (F14) |
| East Asia FTA (F15) | regionalization in East Asia (R11) |
| East Asia FTA (F15) | regionalization in AFTA (F15) |