Quantifying the EU-Japan Economic Partnership Agreement

Arbeitspapier

This paper provides a quantitative analysis of the new EU-Japan free trade agreement (FTA), the biggest bilateral deal that both the EU and Japan have concluded so far. It employs a generalized variant of the Eaton-Kortum (2002) model, featuring multiple sectors, input-output linkages, services trade, and non-tariff barriers (NTBs). It uses the results of an econometric ex-post analysis of a related FTA, the one between the EU and Korea, in force since 2011, to approximate the expected reductions in the costs of NTBs. This approach yields long-run welfare effects for Japan of about 18 bn. USD per year (0.31% of GDP) and of about 15 bn. USD (0.10%) for the EU. On average, the agreement does not appear to harm third countries, but the Americas, Africa and MENA countries slightly lose. 14% of the welfare gains inside the FTA stem from tariffs, the remaining 86% from NTB reform, and the services sector accounts for more than half. In the EU, value added in the agri-food sector goes up most, while in Japan the manufacturing and services sectors gain.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 7241

Classification and Topics

• Classification: Wirtschaft ; Economic Integration ; Trade: Forecasting and Simulation ; Economic History: Transport, Trade, Energy, Technology, and Other Services: Europe: 1913-
• Subject: free trade agreements ; general equilibrium ; quantitative trade models ; Japan ; European Union

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Felbermayr, Gabriel ; Kimura, Fukunari ; Okubo, Toshihiro ; Steininger, Marina
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/185439
• Last update: 10.03.2025, 11:41 AM CET