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Australia’s new Free Trade Agreements with Japan and South Korea: Potential Impacts on the Resources and Agricultural Sectors and their Environmental Implications

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  • Siriwardana, Mahinda

Abstract

This paper examines both economic and environmental impacts of the two new free trade agreements (FTAs) that Australia has recently negotiated with Japan and South Korea using the GTAP-E general equilibrium model. We analyse two trade policy scenarios: first a ‘Free trade scenario’ where bilateral tariffs are eliminated between Australia and Japan, and Australia and South Korea; second a ‘Green trade scenario’ where the ‘Free trade scenario’ is complemented by an environmental policy using an emissions trading scheme (ETS). The results indicate that two trade agreements enhance Australia’s trade at a modest expense on the environment. The paper illustrates that an ETS between Australia, Japan and Korea is an expensive policy to mitigate emissions arising from FTAs.

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  • Siriwardana, Mahinda, 2014. "Australia’s new Free Trade Agreements with Japan and South Korea: Potential Impacts on the Resources and Agricultural Sectors and their Environmental Implications," 2014 Conference, August 28-29, 2014, Nelson, New Zealand 187405, New Zealand Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:nzar14:187405
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    References listed on IDEAS

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    1. Nijkamp, Peter & Wang, Shunli & Kremers, Hans, 2005. "Modeling the impacts of international climate change policies in a CGE context: The use of the GTAP-E model," Economic Modelling, Elsevier, vol. 22(6), pages 955-974, December.
    2. Yan Dong & John Whalley, 2010. "Carbon, Trade Policy and Carbon Free Trade Areas," The World Economy, Wiley Blackwell, vol. 33(9), pages 1073-1094, September.
    3. O'Ryan, Raúl & De Miguel, Carlos J. & Miller, Sebastian & Pereira, Mauricio, 2011. "The Socioeconomic and environmental effects of free trade agreements: a dynamic CGE analysis for Chile," Environment and Development Economics, Cambridge University Press, vol. 16(03), pages 305-327, June.
    4. Peter J. Lloyd & Donald Maclaren, 2004. "Gains and Losses from Regional Trading Agreements: A Survey," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 445-467, December.
    5. Claudia Kemfert & Michael Kohlhaas & Truong Truong & Artem Protsenko, 2006. "The environmental and economic effects of European emissions trading," Climate Policy, Taylor & Francis Journals, vol. 6(4), pages 441-455, July.
    6. McDougall, Robert & Alla Golub, 2007. "GTAP-E: A Revised Energy-Environmental Version of the GTAP Model," GTAP Research Memoranda 2959, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    7. Peter B. Dixon & Maureen T. Rimmer, 2010. "Optimal Tariffs: Should Australia Cut Automotive Tariffs Unilaterally?," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 143-161, June.
    8. Mahinda Siriwardana, 2006. "Australia's Involvement in Free Trade Agreements: An Economic Evaluation," Global Economic Review, Taylor & Francis Journals, vol. 35(1), pages 3-20.
    9. Siriwardana, Mahinda, 2007. "The Australia-United States Free Trade Agreement: An economic evaluation," The North American Journal of Economics and Finance, Elsevier, vol. 18(1), pages 117-133, February.
    10. Burniaux, Jean-Marc & Truong Truong, 2002. "GTAP-E: An Energy-Environmental Version of the GTAP Model," GTAP Technical Papers 923, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    11. Burniaux, Jean-March & Truong, Truong P., 2002. "Gtap-E: An Energy-Environmental Version Of The Gtap Model," Technical Papers 28705, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    12. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
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    International Relations/Trade;

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