IDEAS home Printed from https://ideas.repec.org/a/bap/journl/170206.html
   My bibliography  Save this article

A Comparison Study on ASEAN-Japan and ASEAN-Korea Free Trade Agreements using CGE Model

Author

Listed:
  • Tsung-Chen Lee (Correspondnce author)

    (Faculty of Department of Economics, National Taipei University 151 University Road, Sanshia District, New Taipei City 237, TAIWAN)

  • Shiao-Wei Lo

    (Department of Economics, National Taipei University, 151 University Road, Sanshia District, New Taipei City 237, TAIWAN)

  • Wen-Cheng Lin

    (Department of Economics, National Taipei University 151 University Road, Sanshia District, New Taipei City 237, TAIWAN)

Abstract

This study compares the economy-wide impacts of the ASEAN-Japan and ASEANKorea free trade agreements (FTAs) by conducting a computable general equilibrium (CGE) analysis with highlighting the role of labor market specification. The ASEAN, Japan and Korea are shown to have more significant real GDP growth under the simulation scenarios of unemployment and perfect labor mobility. The associated benefits of FTAs, in terms of economic growth and the reduction in unemployment, are more significant in Japan and Korea than in the ASEAN. Finally, the ASEAN would experience higher increase in the employment of unskilled labor in the FTA with Korea, while Korea would see a higher increase in the employment of skilled labor.

Suggested Citation

  • Tsung-Chen Lee (Correspondnce author) & Shiao-Wei Lo & Wen-Cheng Lin, 2017. "A Comparison Study on ASEAN-Japan and ASEAN-Korea Free Trade Agreements using CGE Model," Review of Economics & Finance, Better Advances Press, Canada, vol. 8, pages 79-95, May.
    • Handle: RePEc:bap:journl:170206
    Note: This research is funded by Ministry of Science and Technology of Taiwan, Project No. NSC 102-2410-H-305-055.
    as

    Download full text from publisher

    File URL: http://www.bapress.ca/ref/ref-article/1923-7529-2017-02-79-17.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Angel Aguiar & Badri Narayanan & Robert McDougall, 2016. "An Overview of the GTAP 9 Data Base," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 181-208, June.
    2. Jong‐Wha Lee & Innwon Park, 2005. "Free Trade Areas in East Asia: Discriminatory or Non‐discriminatory?," The World Economy, Wiley Blackwell, vol. 28(1), pages 21-48, January.
    3. Robert J. R. Elliott & Kengo Ikemoto, 2004. "AFTA and the Asian Crisis: Help or Hindrance to ASEAN Intra‐Regional Trade?," Asian Economic Journal, East Asian Economic Association, vol. 18(1), pages 1-23, March.
    4. Joseph Francis Francois & Ganeshan Wignaraja, 2008. "Economic Implications of Deeper Asian Integration," Economics working papers 2008-13, Department of Economics, Johannes Kepler University Linz, Austria.
    5. Hiro Lee & David Roland-Holst & Dominique van der Mensbrugghe, 2004. "China's Emergence and the Implications of Prospective Free Trade Agreements in East Asia," Discussion Paper Series 156, Research Institute for Economics & Business Administration, Kobe University.
    6. Jesus Felipe & Rana Hasan (ed.), 2006. "Labor Markets in Asia," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-62738-3, December.
    7. Robert Scollay & John P. Gilbert, 2001. "New Regional Trading Arrangements in the Asia Pacific?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number pa63, October.
    8. Ballard, Charles L. & Cheong, Inkyo, 1997. "The effects of economic integration in the Pacific Rim: A computational general equilibrium analysis," Journal of Asian Economics, Elsevier, vol. 8(4), pages 505-524.
    9. Francois Joseph F & Wignaraja Ganeshan, 2008. "Economic Implications of Asian Integration," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-48, September.
    10. Adams, F. Gerard & Park, I., 1995. "Measuring the impact of AFTA: An application of a linked CGE system," Journal of Policy Modeling, Elsevier, vol. 17(4), pages 325-365, August.
    11. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
    12. Michel Fouquin, 2008. "Regionalization in East Asia," Economic Change and Restructuring, Springer, vol. 41(4), pages 289-313, December.
    13. D. Qiu, Larry & K. Kwan, Yum, 2010. "The ASEAN+3 Trading Bloc," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 1-31.
    14. Jugurnath, Bhavish & Stewart, Mark & Brooks, Robert, 2007. "Asia/Pacific Regional Trade Agreements: An empirical study," Journal of Asian Economics, Elsevier, vol. 18(6), pages 974-987, December.
    15. Kitwiwattanachai, Anyarath & Nelson, Doug & Reed, Geoffrey, 2010. "Quantitative impacts of alternative East Asia Free Trade Areas: A Computable General Equilibrium (CGE) assessment," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 286-301, March.
    16. Ando, Mitsuyo & Urata, Shujiro, 2007. "The Impacts of East Asia FTA: A CGE Model Simulation Study," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 11(2), pages 3-73, December.
    17. Ariyasajjakorn, Danupon & Gander, James P. & Ratanakomut, Somchai & Reynolds, Stephen E., 2009. "ASEAN FTA, distribution of income, and globalization," Journal of Asian Economics, Elsevier, vol. 20(3), pages 327-335, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jeff Ferry & Badri Narayanan Gopalakrishnan & Amanda Mayoral, 2022. "The impact of a U.S.–U.K. free trade agreement on workers: a CGE model with worker displacement," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 57(3), pages 121-138, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Phouphet Kyophilavong & Xaignasack Lassachack & Thanouxay Volavong, 2016. "Do cash transfers help the poor during trade liberalization? Evidence from Laos," International Area Studies Review, Center for International Area Studies, Hankuk University of Foreign Studies, vol. 19(4), pages 355-371, December.
    2. Jeong-Soo OH & Phouphet Kyophilavong, 2015. "Trade Liberalization and Poverty in Developing Countries: Literature Survey," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(2), pages 86-94, Fabruary.
    3. Winchester, Niven, 2009. "Is there a dirty little secret? Non-tariff barriers and the gains from trade," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 819-834, November.
    4. Masahiro Kawai, 2009. "The Asian “Noodle Bowl”:Is It Serious for Business?," Working Papers id:1936, eSocialSciences.
    5. ANDO Mitsuyo, 2009. "Impacts of FTAs in East Asia: CGE Simulation Analysis," Discussion papers 09037, Research Institute of Economy, Trade and Industry (RIETI).
    6. Gumilang, Howard & Mukhopadhyay, Kakali & Thomassin, Paul J., 2011. "Economic and environmental impacts of trade liberalization: The case of Indonesia," Economic Modelling, Elsevier, vol. 28(3), pages 1030-1041, May.
    7. Ekaterina Y. ARAPOVA, 2017. "Ex-Post Analysis Of The Influence Of Tariff Liberalisation On Asean Exports," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 17(2), pages 135-154.
    8. Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2013. "Are the EU trade preferences really effective? A Generalized Propensity Score evaluation of the Southern Mediterranean Countries' case in agriculture and fishery," Working Papers 2/13, Sapienza University of Rome, DISS.
    9. Michael G. Plummer & Ganeshan Wignaraja, 2006. "The Post-Crisis Sequencing of Economic Integration in Asia: Trade as a Complement to a Monetary Future," Economie Internationale, CEPII research center, issue 107, pages 59-85.
    10. Manchin, Miriam & Pelkmans-Balaoing, Annette O., 2008. "Clothes without an Emperor: Analysis of the preferential tariffs in ASEAN," Journal of Asian Economics, Elsevier, vol. 19(3), pages 213-223, June.
    11. Ken Itakura & Hiro Lee, 2012. "Welfare Changes And Sectoral Adjustments Of Asia-Pacific Countries Under Alternative Sequencings Of Free Trade Agreements," Global Journal of Economics (GJE), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 1-22.
    12. Lee, Tsung-Chen & Chang, Young-Tae & Lee, Paul T.W., 2013. "Economy-wide impact analysis of a carbon tax on international container shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 58(C), pages 87-102.
    13. Kawai, Masahiro & Wignaraja, Ganeshan, 2011. "Asian FTAs: Trends, prospects and challenges," Journal of Asian Economics, Elsevier, vol. 22(1), pages 1-22, February.
    14. Li, Minghao & Balistreri, Edward J. & Zhang, Wendong, 2020. "The U.S.–China trade war: Tariff data and general equilibrium analysis," Journal of Asian Economics, Elsevier, vol. 69(C).
    15. Hertel, Thomas, 2013. "Global Applied General Equilibrium Analysis Using the Global Trade Analysis Project Framework," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 815-876, Elsevier.
    16. Ganeshan Wignaraja & Dorothea Ramizo & Luca Burmeister, 2012. "Asia-Latin America Free Trade Agreements : An Instrument for Inter-Regional Liberalization and Integration?," Governance Working Papers 23332, East Asian Bureau of Economic Research.
    17. Lee, Hiro & Itakura, Ken, 2013. "What Might be a Desirable FTA Path towards Global Free Trade for Asia-Pacific Countries?," Conference papers 332391, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Francois Joseph F & Wignaraja Ganeshan, 2008. "Economic Implications of Asian Integration," Global Economy Journal, De Gruyter, vol. 8(3), pages 1-48, September.
    19. Itakura, Ken & Lee, Hiro, 2012. "Welfare and Structural Adjustment Implications of Asian Track and Trans-Pacific Track Sequencings of FTAs," Conference papers 332175, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. Angus Charteris & Niven Winchester, 2010. "Dairy disaggregation and joint production in an economy-wide model *-super-‡," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(4), pages 491-507, October.

    More about this item

    Keywords

    Trade liberalization; Labor market; Computable general equilibrium; ASEAN; Global trade analysis project;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bap:journl:170206. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Carlson (email available below). General contact details of provider: http://www.bapress.ca .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.