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Quantifying the EU-Japan Economic Partnership Agreement

Toshihiro Okubo (), Fukunari Kimura (), Gabriel Felbermayr () and Marina Steininger
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Marina Steininger: ifo Institute

No 2018-015, Keio-IES Discussion Paper Series from Institute for Economics Studies, Keio University

Abstract: This paper provides a quantitative analysis of the new EU-Japan free trade agreement (FTA), the biggest bilateral deal that both the EU and Japan have concluded so far. It employs a generalized variant of the Eaton-Kortum (2002) model, featuring multiple sectors, input-output linkages, services trade, and non-tariff barriers (NTBs). It uses the results of an econometric ex post analysis of a related existing FTA, the one between the EU and Korea, to approximate the expected reductions in the costs of NTBs. This approach yields long-run welfare effects for Japan of about 18 bn. USD per year (0.31% of GDP) and of about 15 bn.USD (0.10%) for the EU. On average, the agreement does not appear to harm third countries, but the Americas, Africa and MENA countries slightly lose. 14% of the welfare gains inside the FTA stem from tariffs, the remaining 86% from NTB reform, and the services sector account for more than half. In the EU, value added in the agri-food sector goes up most, while in Japan the manufacturing and services sectors gain.

Keywords: Free Trade Agreements; General Equilibrium; Quantitative Trade Model (search for similar items in EconPapers)
JEL-codes: F15 F17 N74 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2018-09-11
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http://ies.keio.ac.jp/upload/pdf/en/DP2018-015.pdf (application/pdf)

Related works:
Journal Article: Quantifying the EU-Japan Economic Partnership Agreement (2019) Downloads
Chapter: Quantifying the EU-Japan Economic Partnership Agreement (2018)
Working Paper: Quantifying the EU-Japan Economic Partnership Agreement (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:keo:dpaper:2018-015

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