Computational Analysis of the Menu of US‐Japan Trade Policies

We have used the Michigan Computable General Equilibrium (CGE) Model of World Production and Trade to calculate the aggregate welfare and sectoral employment effects of the menu of US‐Japan trade policies. The menu of policies encompasses the various preferential US and Japan bilateral and regional free trade agreements (FTAs) negotiated and in process, unilateral removal of existing trade barriers and global (multilateral) free trade. The welfare impacts of the FTAs on the United States and Japan are shown to be rather small in absolute and relative terms. The sectoral employment effects are also generally small but vary across the individual sectors depending on the patterns of the bilateral liberalisation. The welfare effects on the FTA partner countries are mostly positive though generally small, but there are some indications of potentially disruptive employment shifts in some partner countries. There are indications of trade diversion and detrimental welfare effects on non‐member countries for some of the FTAs analysed. In comparison to the welfare gains from the US and Japan bilateral FTAs, the gains from both unilateral trade liberalisation by the United States, Japan and the FTA partners, and from global (multilateral) free trade are shown to be rather substantial and more uniformly positive for all countries in the global trading system. The US and Japan FTAs are based on ‘hub’ and ‘spoke’ arrangements. We show that the spokes emanate out in different and often overlapping directions, suggesting that the complex of bilateral FTAs may create distortions of the global trading system.     

Multilateral,Regional and Bilateral Trade‐Policy Options for the United States and Japan

We have used the Michigan Model of World Production and Trade to simulate the economic effects on the United States, Japan, and other major trading countries/regions of the Doha Round of WTO multilateral trade negotiations and a variety of regional/bilateral free trade agreements (FTAs) involving the United States and Japan. We estimate that an assumed reduction of post‐Uruguay Round tariffs and other barriers on agricultural and industrial products and services by 33 per cent in the Doha Round would increase world welfare by $686.4 billion, with gains of $164.0 billion for the United States, $132.6 billion for Japan, and significant gains for all other industrialised and developing countries/regions. If there were global free trade with all post‐Uruguay Round trade barriers completely removed, world welfare would increase by $2.1 trillion, with gains of $497.0 billion (5.5 per cent of GNP) for the United States and $401.9 billion (6.2 per cent of GNP) for Japan. Regional agreements such as an APEC FTA, an ASEAN Plus 3 FTA, and a Western Hemisphere FTA would increase global and member country welfare but much less so than the Doha multilateral trade round would. Separate bilateral FTAs involving Japan with Singapore, Mexico, Chile and Korea, and the United States with Chile, Singapore and Korea would have positive, though generally small, welfare effects on the partner countries, but potentially disruptive sectoral employment shifts in some countries. There would be trade diversion and detrimental welfare effects on some non‐member countries for both the regional and bilateral FTAs analysed. The welfare gains from multilateral trade liberalisation are therefore considerably greater than the gains from preferential trading arrangements and more uniformly positive for all countries.     

FTA网络化发展中的“轮轴-辐条”模式:福利效应与中国的参与战略

由不同类型、不同规模的"轮轴—辐条"结构组成的错综复杂的FTA网络成为区域经济一体化的新模式,相关国内外文献较少从微观视角涉及这种新模式的福利效应分析。本文在一般均衡垄断竞争模型基础上,分析了"轮轴-辐条"及其扩展结构下不同地位国家的福利和FTA收益以及影响因素。结果发现:(1)轮轴国与辐条国之间存在不对称收益,轮轴国取得的福利大于辐条国,轮轴有自我强化效应;(2)辐条拓补和多轮轴-辐条结构的福利分配情况复杂,受到产品替代性、贸易互补性、市场份额以及规模报酬递增水平等共同影响;(3)从轮轴-辐条结构进化到全球自由贸易将会增加辐条国的福利和贸易额,降低轮轴国的福利和贸易额。在深入考察FTA网络的构建及其稳定性基础上,墨西哥、韩国、日本、俄罗斯及南非是优先的可选FTA合作伙伴。     

Overlapping free trade agreements and international trade: A network approach

In our work, we have analysed the effect of the hub‐and‐spoke nature of free trade agreements (FTA s) on trade. Contrary to previous analyses, we have considered the effects of the country's position in the FTA network on the bilateral trade of the hub country. We have conducted an in‐depth analysis of the global network of FTA s, focusing particularly on its evolution in the last 15 years. We have utilised a panel data set covering the period 1960–2010 to investigate the effects of the hub‐and‐spoke on trade. Our results show that the countries that are more connected to FTA s export more than those that are less involved, although not all the partner countries you can connect with are the same. An increase in the number of spokes that have no link between them has, on average, a negative effect on the trade of the hub, which indicates that signing FTA s with every country is not the optimal strategy for increasing trade. However, if we consider the way new FTA s change the relative position of a country, we can see that if new FTA s make the country more central or less constrained in the network, these new agreements have a strongly positive and significant pro‐trade effect.     

Trade liberalization,free trade agreements,and the value of firms: Stock market evidence from Singapore

We examine the effects of the United States–Singapore Free Trade Agreement (FTA) on the value of firms listed in the Singapore Exchange using event study analysis. Despite the predictability of the FTA negotiations, we find that one event – the removal of the last obstacle to the free trade deal in January 2003 – increases the value of firms in some industries by 1–11% on average. These results indicate that trade liberalization and FTAs do increase the value of firms.     

欧盟《一般数据保护条例》对国际服务贸易规则的影响

为了保护隐私权,欧盟制定了《一般数据保护条例》(GDPR),保护个人数据和规范数据跨境流动是其两大目标。为了符合GDPR的要求,非欧盟企业客观上只有两种选择:要么撤出欧盟市场,要么将数据本地化,否则将面临巨额罚款。实际上,数据本地化构成了贸易壁垒,违反了《国际服务贸易总协定》第16和17条。为了促进数字贸易,以《全面与进步跨太平洋伙伴关系协定》(CPTPP)、《欧盟日本经济伙伴关系协定》(EPA)和《美墨加协定》(USMCA)为代表的新型区域贸易协定禁止数据中心本地化设置。为此,欧盟应设法消除任何数据本地化要求的可能性,同时应设法完善GDPR下的充分性决定机制。GDPR客观上对国际服务贸易规则产生了深远而广泛的影响。为了因应国际服务贸易规则的新发展,中国应引导与推动《服务贸易总协定》(GATS)的改进,加速构建促进个人信息保护、数据有序流动和保护公共利益相协调的新型数字贸易规则;借鉴欧盟与美国缔结的《隐私盾协议》,与欧盟开展有关数据跨境流动的双边协议谈判。     

Migration,Unemployment and Trade

Using an oligopoly model of trade with asymmetric costs, we study the individual and world welfare implications of a hub and spoke trade agreement where the hub country is more efficient than spoke countries. Under a hub and spoke trade regime, the hub country can benefit at the expense of the spokes relative to free trade. Furthermore, if the hub is sufficiently efficient compared to the spokes, such a regime can yield higher global welfare than free trade. Preferential treatment of the efficient hub country in its export markets improves world welfare because it helps allocate a larger share of the world’s output to a low cost location.     

Regional Trade Agreements versus Global Trade Liberalisation: Implications for a Small Island Developing State

This study undertakes an empirical investigation of the macroeconomic and sectoral impacts of two forms of regional trade agreements vis‐à‐vis global trade liberalisation on a small island country, using Fiji as a case study. In order to capture the feedback effects of such a complex set of policies, we employ a dynamic computable general equilibrium model of the Fijian economy to investigate (i) the impact of the Pacific Island Countries Trade Agreement (PICTA), (ii) the impact of PICTA, the Pacific Agreement for Closer Economic Relations (PACER), and the Economic Partnership Agreements (EPAs), (iii) the impact of full tariff liberalisation (i.e. tariff removal only), and (iv) the impact of full trade liberalisation, with removal of both tariff and non‐tariff barriers. While PICTA consistently provides the least benefits across a range of macroeconomic indicators including real output, welfare, trade volumes and employment, full trade liberalisation involving the removal of tariff and non‐tariff barriers provides the greatest benefits compared to the other scenarios in terms of real output. However, the latter scenario is outperformed by PICTA, PACER, the EPAs and full tariff liberalisation in terms of welfare effects, trade volumes and employment. The policy implications hold important lessons for developing countries considering trade liberalisation.     

Can the Regional Comprehensive Economic Partnership minimise the harm from the United States–China trade war?

Using ex post tariff schedules for the first time, it was found that the global gains provided by the Regional Comprehensive Economic Partnership (RCEP) are not enough to overcome the negative impacts of the United States–China trade dispute. While trade tensions cause China's welfare loss to be more than twice as large as the United States, they provide some trade diversion to RCEP members. But of concern is if India successfully delays the conclusion of the RCEP even by a year, there will be a global loss of US$17.7 billion. The RCEP is also beneficial for the emerging economy of Vietnam and the high‐tariff‐imposing Korean economy. The results obtained here are, however, conservative as reduction in non‐tariff barriers and other positive spillover effects of trade liberalisation related to investment and productivity improvements due to competition or increased intra‐industry trade could not be accounted for.     

美国加入TPP的动因分析

"跨太平洋战略经济伙伴协定"(TPP)因美国宣布加入而引起世界的关注。它具有跨度大、网络化、质量高、开放性和时代性等一般自由贸易协定(FTA)所没有的特点。美国加入TPP有四个原因:一是塑造跨太平洋自由贸易区"新样板",为成立更大的"美式"亚太自由贸易区(FTAAP)打下基础;二是将TPP树为美国区域贸易协定的新模式,"拔高"标准,获得更大利益;三是抗衡东亚经济一体化进程,扭转美国被排除在外的不利局面;四是将TPP作为通往FTA-AP的桥梁,实现美国在亚太地区的战略布局。但TPP谈判举步维艰,面临多重挑战,它能否最终扩大FTAAP尚属疑问。     

中国-新加坡自由贸易协定的背景、内容及影响

在十七大报告中,中国把自由贸易区建设提高到战略高度。中国-新加坡协定为中国实施自由贸易区战略提供了一种新的战略推进模式。协定对加强中新双边经贸关系,新加坡参与中国区域经济发展和中国企业"走出去"战略的实施产生积极影响。     

A Canadian perspective on NAFTA

Although most analysis of the North American Free Trade Agreement (NAFTA) has focused on the bilateral relationship between Mexico and the United States this article concentrates on the larger trading and investment linkages of Canada and the United States. From a Canadian perspective the NAFTA is an extension of (and improvement upon) the Canada–U.S. Free Trade Agreement (FTA) of 1989. The FTA introduced new dispute settlement mechanisms that Canada views as essential to partially offset U.S. administered protection. The new rules-based system of the FTA is also the basis for the NAFTA, and it has been extended from the trade law regime to cover foreign investment disputes. All three parties in NAFTA will benefit from a rules-based system rather than the power-based system that permits U.S. producer interests to exploit the size asymmetries between the large triad market of the United States and the smaller open trading economies of Mexico and Canada. © 1995 John Wiley & Sons, Inc.     

A Middle East Free Trade Area: Economic Interdependence and Peace Considered

The Bush administration hopes that through a Middle East Free Trade Area (MEFTA), peace and stability can be achieved through intra‐regional economic cooperation. The current impediments to intra‐regional economic cooperation, however, will make a MEFTA a hub‐and‐spoke trade relationship between the United States and the Middle East. Neoliberal arguments for the interrelation of peace and economic interdependence in the context of the Middle East are then considered.     

中日韩FTA的潜在经济影响研究——基于动态递归式CGE模型的研究

区域性FTA已经成为世界贸易自由化的新趋势,中韩日FTA的构建对于3国经济融合将产生巨大的推动作用。本文首先回顾了中日韩FTA的相关研究与谈判进程;然后分析了中日韩3国的贸易结构、特征与趋势;最后,结合FTA资本聚集效应,按时间序列构建动态递归式一般均衡模型,分析了中日韩FTA对3国国内生产总值、福利(EV)、外贸进出口、贸易条件等产生的各种潜在经济影响。     

Impact of RTA and PTA on Bangladesh’s Export: Application of a Gravity Model

As part of its growth strategy, Bangladesh instituted a trade liberalization process in the early 1990s which gained momentum in later years. Trade grew from 24.4 to 45% of GDP between 1980–81 and 2007–08, an indicator of increased liberalization as well as the growing importance of the external sector in Bangladesh. Apart from its unilateral liberalization, Bangladesh participates in three different regional trade agreements (RTAs): the South Asian Free Trade Agreement (SAFTA), the Asia Pacific Trade Agreement (APTA) and the Bay of Bengal Initiative for Multisectoral Technical and Economic Cooperation Free Trade Area (BIMSTEC FTA). In addition, Bangladesh signed preferential trade agreements (PTAs) with the member countries of the Developing 8 (D8). Because of the growing importance of RTAs, this study investigates their contribution to the export flows from Bangladesh using the gravity model that has become the primary tool for estimating the trade effects of regional integration. Regression results of bilateral exports for 40 countries from 1992–2009 indicate two crucial aspects. Firstly, all the RTAs consistently maintained statistically significant negative signs, except the BIMSTEC FTA and SAFTA, which showed insignificantly positive and insignificantly negative effects respectively. Secondly, the intensity of negative effects and the level of significance have shown a declining trend as the status of those blocs has changed from political or economic cooperation agreements to preferential agreements and from preferential agreements to free trade agreements. Thus, the intensity of tariff liberalization and the degree of sectoral coverage seem to be the important determinants of the RTAs’ performance. Therefore, experts expect that full-fledged implementation of FTA provisions and the elimination of all tariff and non-tariff barriers might result in a higher degree of integration.     

Trade configurations in Asia: Assessing de facto and de jure regionalism

Given the backdrop of significant uncertainties largely propelled by the ongoing trade spat between the United States and China, to what degree can the Asian region move forward in terms of de facto trade integration? Drawing on the new economic geography literature, this paper offers new insights into the literature on trade regionalism in Asia by empirically illustrating how Asian economies can tap into the regional market potential. Specifically, the paper examines the scope for further de facto integration among the Asian countries engaged in the negotiation for the Regional Comprehensive Economic Partnership (RCEP) Agreement by estimating foreign market potential (FMP) indices. To preview the main findings, the empirical analysis demonstrates that the share of intra-regional trade in total RCEP trade flows and, consequently, the ratio between within- and outside-RCEP trades are significantly lower than what they could potentially be. The paper makes a case that the enhancement of de jure integration among these economies through the RCEP must be accompanied by efforts to improve de facto integration.     

Thai Trade Policy: From Non‐discriminatory Liberalisation to FTAs

FTAs have dominated Thai trade policy recently, reflecting the general trend in east Asia. But they also reflect domestic political changes, especially the decision‐making style of the Thaksin government. Thai FTAs have become very politicised. In particular, the US‐Thai FTA negotiations have run into a storm of domestic protest. The first section of the paper surveys the national trade‐policy framework. It highlights the slowdown of unilateral trade and FDI liberalisation after the Asian crisis, though a descent back into protectionism was successfully resisted. Thailand punches well below its weight in the WTO, and not very forcefully in ASEAN, because political attention and negotiating resources have switched to FTAs. The second section identifies the main actors in Thai trade policy, and briefly describes the trade‐policy decision‐making process as well as recent developments during the Thaksin administration. The following central section deals with Thailand's FTAs. These have been driven by vague foreign‐policy goals, while credible economic strategy has been lacking. The residual commercial logic is narrowly mercantilist and ‘trade‐light’, seeking an exchange of concessions in a narrow range of sectors rather than comprehensive, trade‐creating FTAs. Weak and partial FTAs are the result. The sole exception has been the Thailand‐USA FTA negotiations, as the USA wants a strong, deep‐integration FTA. However, negotiations were suspended in 2006 in the wake of the Thai political crisis. Overall, Thai trade policy post‐Asian crisis is highly unbalanced. It stands on a shaky FTA leg, while the other WTO leg has gone to sleep and the ASEAN arm is limp. Above all, core unilateral liberalisation and related regulatory reform are lacking.     

Q&A on Beibu Gulf

China-ASEAN FTA, the world＇s largest free trade area in terms of population took effect on January 1, 2010, covering 13 million square kilometers and 1.9 billion people. Over 90 percent of the commodities traded between China and the six original ASEAN countries, including Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand, now enjoy no tariffs from 2010. As a window to ASEAN countries, Beibu Gulf Economic Zone is in more limelight since the new year.     

Marketing Impact of Trade Bloc Formation on Third Country Firms:

The United States-Canada Free Trade Agreement (FTA) came into effect on 1 January 1989. Its main provision is the elimination of all tariffs on trade between the two countries by 1 January 1998. On balance, it is expected to be beneficial to the exporting firms of both the U.S. and Canada. However, it is also likely to impact on other third country firms that rely heavily on the U.S.-Canada market. This study attempts to examine the marketing impact of the FTA on Singapore firms and suggests some strategies to harness any opportunities and overcome any threats consequent to the agreement. Further, implications on other third country firms that are interested in the U.S. and Canada markets are also discuessed.     

Is FTA/EPA effective for a developing country to attract FDI? The knowledge‐capital model revisited

To prepare an answer to the question of how a developing country can attract foreign direct investment (FDI), this paper explored the factors and policies that may help bring FDI into a developing country by utilising an extended version of the knowledge‐capital model. With a special focus on the effects of a free trade agreement (FTA) or an economic partnership agreement (EPA) between a pair of market and non‐market countries, simulations with the model revealed the following: (i) although FTA/EPA generally tends to increase FDI to a developing country, the possibility of improving welfare through increased demand for skilled and unskilled labour decreases as the size of the country grows; (ii) a developing country may suffer severe welfare losses through FTA/EPA if the availability of skilled labour is extremely limited; and (iii) a developing country can enhance welfare gains from a FTA, and it is even possible to recover the welfare effects from negative to positive, by making the arrangement an EPA.