TY - JOUR
T1 - Quantifying the EU-Japan Economic Partnership Agreement
AU - Felbermayr, Gabriel
AU - Kimura, Fukunari
AU - Okubo, Toshihiro
AU - Steininger, Marina
N1 - Funding Information:
We wish to thank seminar participants at Brussels (Bruegel), Copenhagen, and Tokyo, as well as an anonymous referee, Shujiro Urata, Andre Sapir and Sonali Chowdhry for comments and suggestions. At an early stage, this research was financed by the Bertelsmann Foundation. Financial support was received from Japan Society for the Promotion of Science (18H03637, 26220503).
Funding Information:
We wish to thank seminar participants at Brussels (Bruegel), Copenhagen, and Tokyo, as well as an anonymous referee, Shujiro Urata, Andre Sapir and Sonali Chowdhry for comments and suggestions. At an early stage, this research was financed by the Bertelsmann Foundation. Financial support was received from Japan Society for the Promotion of Science ( 18H03637 , 26220503 ).
Publisher Copyright:
© 2019 Elsevier Inc.
PY - 2019/3
Y1 - 2019/3
N2 - This paper provides a quantitative analysis of the new EU-Japan Economic Partnership Agreement (EPA), 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 existing FTA, the one between the EU and Korea, 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. 14% of the welfare gains inside the EPA stem from tariffs, the remaining 86% from NTB reform, and the services sector account 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.
AB - This paper provides a quantitative analysis of the new EU-Japan Economic Partnership Agreement (EPA), 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 existing FTA, the one between the EU and Korea, 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. 14% of the welfare gains inside the EPA stem from tariffs, the remaining 86% from NTB reform, and the services sector account 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.
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U2 - 10.1016/j.jjie.2018.12.007
DO - 10.1016/j.jjie.2018.12.007
M3 - Article
AN - SCOPUS:85060604377
SN - 0889-1583
VL - 51
SP - 110
EP - 128
JO - Journal of The Japanese and International Economies
JF - Journal of The Japanese and International Economies
ER -