Overlapping Free Trade Agreements of Singapore-USA-Japan: A Computational Analysis
Soo Yuen Chong and
Jung Hur ()
SCAPE Policy Research Working Paper Series from National University of Singapore, Department of Economics, SCAPE
The proliferation of overlapping free trade agreements (FTA) in the recent years has led to hub-and-spokes (HAS) throughout the world. Being avid subscribers to FTAs, many countries in the Asia-Pacific region including the USA, Japan, Singapore, South Korea, Thailand and Australia have become trade hubs to their partners who are in turn relegated to spoke status. In this paper, we question whether being a hub is welfare optimal for a small and open economy like Singapore compared to membership in a single bilateral FTA or a multi- member free trade zone. Within this context, we use a computable general equilibrium model to examine the welfare implications of the triangular trade relationship of the USA, Singapore and Japan. This is facilitated by the Japan- Singapore Economic Partnership Agreement, the USA-Singapore Free Trade Agreement, and a hypothetical USA-Japan Economic Partnership Agreement. The analysis is extended to incorporate “super-hub” effects; that is, the spoke countries can be trade hubs in other HAS systems. The experiment reveals that hub status generates positive welfare gain and is the highest Singapore can get from the trade configurations considered. Meanwhile, Japan loses more than the USA when both are relegated to spoke status. These findings prove robust under different market structures and production technologies, deeper economic integration, “super-hub” effects, as well as, uncertainty in the key model parameters and the extent of trade liberalisation shocks.
Keywords: hub and spokes; overlapping agreements; free trade; preference dilution; computable general equilibrium; GTAP; systems; trade configurations (search for similar items in EconPapers)
JEL-codes: C68 D58 F15 (search for similar items in EconPapers)
Pages: 34 pages
New Economics Papers: this item is included in nep-cmp, nep-int and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Working Paper: Overlapping Free Trade Agreements of Singapore-USA-Japan: A Computational Analysis (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:sca:scaewp:0711
Access Statistics for this paper
More papers in SCAPE Policy Research Working Paper Series from National University of Singapore, Department of Economics, SCAPE Contact information at EDIRC.
Bibliographic data for series maintained by (). This e-mail address is bad, please contact .