The Case for Free Trade Agreements: Historical Perspectives and a Projection for China, Japan, and Korea
Abstract/Contents
- Abstract
- In recent years, several major Free Trade Agreements (FTAs) have been proposed amongst countries that encompass a lion’s share of the world’s economic output.Thus, understanding the impact of FTAs on trade and income has become more crucial than ever. This paper sheds light on both the past and future effects of FTAs via a two-step approach. First, I use a gravity model to measure the effect of existing FTAs on the bilateral trade flows of member countries. Second, I project the potential increase in trade and GDP from a China-Japan-Korea (CJK) FTA specifically, through a combination of gravity model analysis and calculations based on various economic growth and tariff reduction scenarios. The results show that historically, FTAs have greatly increased trade amongst member countries. Looking forward, I estimate that a CJK FTA increases intraregional merchandise trade by 21%-46% and services trade by 49%-79%, with commensurately large increases in GDP. This suggests that FTAs might play a major role in boosting world economic growth.
Description
| Type of resource | text |
|---|---|
| Date created | May 2013 |
Creators/Contributors
| Author | Zhu, Edward |
|---|---|
| Primary advisor | Boskin, Michael J. |
| Degree granting institution | Stanford University, Department of Economics |
Subjects
| Subject | Stanford Department of Economics |
|---|---|
| Subject | FTA |
| Subject | gravity model |
| Subject | trade liberalization |
| Subject | tariff |
| Subject | non-tariff barrier |
| Genre | Thesis |
Bibliographic information
| Related item | |
|---|---|
| Location | https://purl.stanford.edu/vh038xc2770 |
Access conditions
- Use and reproduction
- User agrees that, where applicable, content will not be used to identify or to otherwise infringe the privacy or confidentiality rights of individuals. Content distributed via the Stanford Digital Repository may be subject to additional license and use restrictions applied by the depositor.
Preferred citation
- Preferred Citation
- Zhu, Edward. (2013). The Case for Free Trade Agreements: Historical Perspectives and a Projection for China, Japan, and Korea. Stanford Digital Repository. Available at: https://purl.stanford.edu/vh038xc2770
Collection
Stanford University, Department of Economics, Honors Theses
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