On the new gold standard in EU trade integration: reviewing the EU-Japan EPA
Julia Grübler (),
Oliver Reiter () and
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Julia Grübler: The Vienna Institute for International Economic Studies (wiiw)
Oliver Reiter: The Vienna Institute for International Economic Studies (wiiw)
Authors registered in the RePEc Author Service: Julia Gruebler
Empirica, 2021, vol. 48, issue 3, No 3, 644 pages
Abstract In 2011 the European Union’s free trade agreement with South Korea was considered its most ambitious agreement with any Asian economy. In 2019, however, this distinction was handed over to the EU’s Economic Partnership Agreement (EPA) with Japan. With Japan being a top-ten trading partner of the EU, the EPA is of economic and political importance in times of rising protectionism to support rule-based trading principles as well as international standards and sustainability goals. The paper reviews EU-Japan trade structures and the components of the EPA accompanied by a structural gravity estimation that builds on the experiences of the EU-South Korea agreement. Manufacturing industries benefit from reduced duties and application of the same international standards, facilitating approval. The greatest potential for cost reduction through tariff cuts remains in the strongly protected agri-food sector. Given the importance of non-tariff measures in negotiations of the EPA, we consider a counterfactual ‘gold-standard’ scenario, in which the regulatory gap for standard-like non-tariff measures between the EU and Japan closes. General equilibrium results suggest welfare effects for Japan of up to 0.05% of real GDP. Estimated GDP effects for the EU are in the magnitude of 0.01%, however, with marked differences across EU Member States.
Keywords: EU-Japan economic partnership; Free trade agreement; Trade policy; Non-tariff measures; Structural gravity model (search for similar items in EconPapers)
JEL-codes: D58 F13 F14 Q17 (search for similar items in EconPapers)
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