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Computational Analysis of the Menu of U.S. – Japan Trade Policies

dc.contributor.authorBrown, Drusilla K.
dc.contributor.authorKiyota, Kozo
dc.contributor.authorStern, Robert M.
dc.date2010-10-08
dc.date.accessioned2010-10-20T13:46:17Z
dc.date.available2010-10-20T13:46:17Z
dc.date.issued2010-10-20
dc.identifier.urihttps://hdl.handle.net/2027.42/78165
dc.description.abstractWe 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 U.S.-Japan trade policies. The menu of policies encompasses the various preferential U.S. and Japan bilateral and regional free trade agreements (FTAs) negotiated and in process, unilateral removal of existing trade barriers by the two countries, and global (multilateral) free trade. The U.S. preferential agreements include the FTAs approved by the U.S. Congress with Chile and Singapore in 2003, those signed with Central America, Australia, and Morocco and receiving Congressional approval in 2004, and prospective FTAs with the Southern African Customs Union (SACU), Thailand, and the Free Trade Area of the Americas (FTAA). The Japanese preferential agreements include the bilateral FTA with Singapore signed in 2002 and prospective FTAs with Chile, Indonesia, Korea, Malaysia, Mexico, Philippines, and Thailand. 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 in the United States and Japan, but vary across the individual sectors depending on the patterns of the bilateral liberalization. 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 nonmember countries for some of the FTAs analyzed. Data limitations precluded analysis of the welfare effects of the different FTA rules of origin and other discriminatory arrangements. In comparison to the welfare gains from the U.S. and Japan bilateral FTAs, the gains from both unilateral trade liberalization 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 U.S. 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.en_US
dc.format.extent327394 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen_US
dc.relation.ispartofseries108en_US
dc.subjectMultilateralen_US
dc.subjectRegionalen_US
dc.subjectBilateral Trade Liberalizationen_US
dc.subject.otherF10en_US
dc.subject.otherF13en_US
dc.subject.otherF15en_US
dc.titleComputational Analysis of the Menu of U.S. – Japan Trade Policiesen_US
dc.typeWorking Paperen_US
dc.subject.hlbtoplevelSocial Sciences
dc.contributor.affiliationumInternational Policy Center (IPC); Gerald R. Ford School of Public Policyen_US
dc.contributor.affiliationotherTufts Universityen_US
dc.contributor.affiliationotherYokohama National Universityen_US
dc.contributor.affiliationumcampusAnn Arbor
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/78165/1/ipc-108-brown-kiyota-stern-computational-analysis-us-japan-trade-policies.pdf
dc.owningcollnameInternational Policy Center (IPC) - Working Paper Series


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