On the Use of FTAs by Japanese Firms: Further evidence
The paper examines the use of Free Trade Agreements by Japanese companies. The FTAs analyzed include Japan's FTAs with Mexico, Malaysia and Chile. Based on 1,688 responses to a questionnaire survey conducted in 2008, the study finds that the utilization rate of FTAs ranges between 32.9% (Japan-Mexico FTA) and 12.2% (Japan-Malaysia FTA). The survey results and the statistical analysis of the determinants of the use of FTAs reveal obstacles to using FTAs that include the limited magnitude of foreign trade with the FTA partner countries, difficulty in obtaining the certificate of origin that is required to use the FTA, lack of knowledge of FTAs, and the small FTA tariff preference that is the difference between the MFN and FTA tariff rates. These findings indicate the need for the government and relevant agencies to reduce the cost of obtaining the certificate of origin and to make efforts to establish FTAs with Japan's major trading partners, such as the United States, EU and China, in order for Japanese companies to obtain greater benefits from FTAs.
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