The Impacts of East Asia FTA: A CGE Model Simulation Study

In light of the on-going discussions of the possibility of an East Asia FTA, this paper attempts to estimate the impacts of an East Asia FTA using a Computable General Equilibrium (CGE) model. Although most previous simulation studies on the impacts of FTAs focus only on the liberalization of trade...

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Main Authors: Mitsuyo Ando, Shujiro Urata
Format: Article
Language:English
Published: Korea Institute for International Economic Policy 2007-12-01
Series:East Asian Economic Review
Subjects:
FTA
Online Access:http://dx.doi.org/10.11644/KIEP.JEAI.2007.11.2.170
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spelling doaj-84516f64a26f420a858ab4fcea11b6de2020-11-24T23:34:52ZengKorea Institute for International Economic PolicyEast Asian Economic Review2508-16402508-16672007-12-01112373http://dx.doi.org/10.11644/KIEP.JEAI.2007.11.2.170The Impacts of East Asia FTA: A CGE Model Simulation Study Mitsuyo Ando 0Shujiro Urata 1Keio UniversityWaseda UniversityIn light of the on-going discussions of the possibility of an East Asia FTA, this paper attempts to estimate the impacts of an East Asia FTA using a Computable General Equilibrium (CGE) model. Although most previous simulation studies on the impacts of FTAs focus only on the liberalization of trade in goods, our paper attempts to take into account other aspects of FTAs such as capital accumulation and trade and investment facilitation measures. Our simulation analysis finds that an ASEAN+3 FTA is the most desirable FTA of eight hypothetical FTAs in East Asia to all member countries at the macro level. At the same time, our results demonstrate the significant impacts of capital accumulation and various trade and investment facilitation and coordination programs. At the sectoral level, many sectors gain in terms of output and trade. Although some sectors in certain countries indeed lose in terms of output as a result of an ASEAN+3, most of them experience increases in both exports and imports, even if output declines. These results indicate that the larger the coverage in terms of membership as well as contents such as trade and FDI liberalization and facilitation, and economic cooperation is, the greater benefits can be accrued to the members.http://dx.doi.org/10.11644/KIEP.JEAI.2007.11.2.170FTAEast AsiaCGE ModelCapital AccumulationTrade and Investment Facilitations
collection DOAJ
language English
format Article
sources DOAJ
author Mitsuyo Ando
Shujiro Urata
spellingShingle Mitsuyo Ando
Shujiro Urata
The Impacts of East Asia FTA: A CGE Model Simulation Study
East Asian Economic Review
FTA
East Asia
CGE Model
Capital Accumulation
Trade and Investment Facilitations
author_facet Mitsuyo Ando
Shujiro Urata
author_sort Mitsuyo Ando
title The Impacts of East Asia FTA: A CGE Model Simulation Study
title_short The Impacts of East Asia FTA: A CGE Model Simulation Study
title_full The Impacts of East Asia FTA: A CGE Model Simulation Study
title_fullStr The Impacts of East Asia FTA: A CGE Model Simulation Study
title_full_unstemmed The Impacts of East Asia FTA: A CGE Model Simulation Study
title_sort impacts of east asia fta: a cge model simulation study
publisher Korea Institute for International Economic Policy
series East Asian Economic Review
issn 2508-1640
2508-1667
publishDate 2007-12-01
description In light of the on-going discussions of the possibility of an East Asia FTA, this paper attempts to estimate the impacts of an East Asia FTA using a Computable General Equilibrium (CGE) model. Although most previous simulation studies on the impacts of FTAs focus only on the liberalization of trade in goods, our paper attempts to take into account other aspects of FTAs such as capital accumulation and trade and investment facilitation measures. Our simulation analysis finds that an ASEAN+3 FTA is the most desirable FTA of eight hypothetical FTAs in East Asia to all member countries at the macro level. At the same time, our results demonstrate the significant impacts of capital accumulation and various trade and investment facilitation and coordination programs. At the sectoral level, many sectors gain in terms of output and trade. Although some sectors in certain countries indeed lose in terms of output as a result of an ASEAN+3, most of them experience increases in both exports and imports, even if output declines. These results indicate that the larger the coverage in terms of membership as well as contents such as trade and FDI liberalization and facilitation, and economic cooperation is, the greater benefits can be accrued to the members.
topic FTA
East Asia
CGE Model
Capital Accumulation
Trade and Investment Facilitations
url http://dx.doi.org/10.11644/KIEP.JEAI.2007.11.2.170
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