Policy Research Domains (Major Policy Research Domains) III. Formulating Japan's Strategy in Response to Globalization and Deepening Economic Interdependence in Asia

FTA Study

Project Leader/Sub-Leader

URATA Shujiro

URATA Shujiro Faculty Fellow



2009 - 2010

A free trade agreement (FTA) is an arrangement, under which trade barriers such as import tariffs on trade between FTA members are eliminated. FTAs increased sharply in the early 1990s and the pace of the increase has accelerated since the establishment of the World Trade Organization in 1995. Slow progress in multilateral trade negotiation is a very important factor behind the rapid increase of FTAs. The objective of this research project is to discern the impacts of FTAs on the foreign trade of FTA members. The analysis process is two-fold. First, researchers examine the usage of FTAs by companies, and then they investigate the impacts of FTAs on foreign trade. The countries selected for this study are Japan, China, South Korea, Thailand, and Australia.

2007 - 2008

In recent years, there has been a rapid increase in the number of free trade agreements (FTAs) in which trade is liberalized between designated countries. While FTAs expand the level of trade between member countries, they are very likely to divert and suppress trade with non-members. FTAs affect the economies of member and non-member countries through these two effects. The purpose of this project is to examine the impact of FTAs on trade and domestic economic activities by undertaking pre- and post-FTA analysis. Pre-FTA analysis is based on data from the period prior to the establishment of an FTA and features the running of simulations using general equilibrium models. Post-FTA analysis is based on actually observed data and uses gravity models to examine the determinants of bilateral trade. This project covers the FTAs established by Japan and other FTAs established throughout the world. For Japan's FTAs, the project also analyzes the level of use of the FTA by firms. Drawing on the results of these analyses, this project aims to determine the impact of FTAs on trade and domestic economic activities, and to provide useful information for the design of FTA policies by the Japanese government.

July 26, 2007 - March 31, 2011

Major Research Results

Major Research Results


RIETI Discussion Papers

RIETI Policy Discussion Papers


RIETI Discussion Papers




RIETI Discussion Papers