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

Arbeitspapier

This paper deals with the trade and welfare effects of a potential bilateral trade agreement between the US and Japan. A possible agreement is currently being discussed between Washington and Tokyo, although, there is also the alternative for the US government joining Trans-Pacific Partnership (TPP). Based on the theoretical model of Caliendo and Parro (2015) I analyse the welfare gains of such a bilateral free trade agreement (FTA) in the style of Aichele et al. (2014). In particular, I simulate three scenarios with different levels of integration: The reduction of tariffs only, the scenario of a shallow FTA, and a deep FTA. In addition, the paper compares the trade and welfare changes of a deep FTA to the welfare effects of TPP. The findings are that Japan has the highest welfare gains with a FTA (0.085%), whilst the United States benefits the most from TPP with a welfare gain of 0.05%.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Hohenheim Discussion Papers in Business, Economics and Social Sciences ; No. 16-2018

Classification and Topics

• Classification: Wirtschaft ; Trade Policy; International Trade Organizations ; Empirical Studies of Trade ; Trade: Forecasting and Simulation
• Subject: Trade agreements ; Gravity model ; Counterfactual equilibrium ; Intermediate goods ; Input-output linkages ; Japan ; United States

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Walter, Timo
• Event: Veröffentlichung
• (who): Universität Hohenheim, Fakultät Wirtschafts- und Sozialwissenschaften
• (where): Stuttgart
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/180364
• URN: urn:nbn:de:bsz:100-opus-15045
• Last update: 10.03.2025, 11:45 AM CET