Trade and welfare effects of a potential free trade agreement between Japan and the United States

Abstract

This paper addresses the trade and welfare implications of a bilateral trade agreement between the U.S. and Japan. In 2019, the two countries signed a “stage one” trade agreement, with the U.S.-Japan Trade Agreement (USJTA) and the U.S.-Japan Digital Trade Agreement as two small trade agreements. A comprehensive bilateral free trade agreement (FTA) is currently under discussion between Washington and Tokyo, with the U.S. government alternatively joining the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP). Based on the theoretical model of Caliendo and Parro (Rev Econ Stud, 82(1):1–44, 2015) , I analyze the welfare gains of such a bilateral FTA in the style of Aichele et al. (Where is the value added? China’s WTO entry, trade and value chains, ZBW-Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz, 2014). I simulate trade and welfare impacts for the USJTA and the U.S.-Japan Digital Trade Agreement, as well as for a deep bilateral FTA. In addition, I examine and compare the welfare implications of the established CPTPP with the scenario of the U.S. or China joining CPTPP. My findings show that Japan’s welfare increases by 0.3% and U.S. welfare increases by 0.14% as a result of the FTA. Welfare of both countries would increase if the U.S. entered CPTPP, with Japanese welfare being even higher if China acceded to CPTPP.

Global Value Chains

“…On average, the gains from trade are 75% larger in a world of intermediate input trade. (Walter, 2018). Furthermore, the framework has relevant value of the trade elasticity in one-sector models should be lower than the sectoral trade elasticities estimated by Caliendo and Parro (2015), it is not hard to generate cases in which the gains from trade are actually lower with multiple sectors.…”

Desafíos de los agricultores para la exportación de sus productos: una revisión sistemática de literatura

“…Arancelaria Impuestos y tasas por exportación Abu & Hess, 2013;Azarnert, 2014;Delfín & Bonales, 2014;Ehrich & Mangelsdorf, 2018;Ghazalian, 2013;Grant et al, 2021;Liefert & Westcott, 2016;Mao et al, 2021;Nabeshima et al, 2021;Obeng et al, 2023;Remeikiene et al, 2018;Walter, 2022Boza et al, 2018Hernando, 2013 Falta de políticas internas Cameron et al, 2017;Castro-Gonzáles et al, 2016;Delfín & Bonales, 2014;Fereira & Cateia, 2023;Liefert & Westcott, 2016;Mataveli et al, 2022;Ponnusamy, 2022;Rehner et al, 2014;Remeikiene et al, 2018Beuchelt et al, 2022Franceschi-Barraza, 2014 Falta de acuerdos comerciales internacionales Abu & Hess, 2013;Ghazalian, 2013;Hernández-Pérez, 2019;Jin, 2022;Obeng et al, 2023;Ponnusamy, 2022;Zhang, 2021) Cheng Gladstone et al, 2021;Hernando, 2013 Restricciones por la calidad del producto a exportar Curzi et al, 2020;Ferro et al, 2015;Mao et al, 2021;Melo et al, 2014;Yang et al, 2023…”

Impact of Free Trade Area on Trade, Revenue and Welfare in Nigeria

“…It is clear from the literature that improving trade, revenue, and welfare through trade reforms, such as FTA arrangements, have undergone empirical scrutiny in the extant literature. Walter (2018) investigated the possible impact of a bilateral trade agreement between the United States and Japan on consumers’ welfare and trade. The study utilized the computable general equilibrium (CGE) model to weigh the possible benefits between Washington and Tokyo and to understudy the US government’s policy option to join the Trans-Pacific Partnership (TPP).…”