The Impacts of an East Asia FTA on Foreign Trade in East Asia
AbstractThis 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.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10173.
Date of creation: Dec 2003
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Find related papers by JEL classification:
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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