The Impacts of an East Asia FTA on Foreign Trade in East Asia

Shujiro Urata and Kozo Kiyota

No 10173, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: F13 F17 (search for similar items in EconPapers)
Date: 2003-12
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

Published as Shujiro Urata & Kozo Kiyota, 2005. "The Impacts of an East Asia Free Trade Agreement on Foreign Trade in East Asia," NBER Chapters, in: International Trade in East Asia, NBER-East Asia Seminar on Economics, Volume 14, pages 217-252 National Bureau of Economic Research, Inc.

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