Trade in Services and Japan's Bilateral FTAs: Empirics on their impacts

Author Name ISHIDO Hikari  (Chiba University)
Creation Date/NO. January 2015 15-E-012
Research Project Economic Impacts of Free Trade Agreements: The case of Japan
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This paper addresses the economic impacts of free trade agreements (FTAs) on the location choice of Japanese services suppliers. It makes a first-step analysis on the impact of Japan's bilateral FTAs on the Mode 3 (commercial presence)-based trade in services, as there seems to be no detailed quantitative analysis focusing exclusively on those FTAs with a General Agreement on Trade in Services (GATS)-style commitment table. An analysis of aggregate survey results is made. Then, utilizing a newly constructed firm-level database matched with the newly calculated Hoekman Index (for measuring the degree of service sector liberalization) through Mode 3, count data analyses were conducted. Overall, the results reveal some positive correlations between the degree of service trade liberalization in the host country and service firms' commercial presence in that country, hence a policy suggestion for Japan to further promote service trade liberalization under bilateral/plurilateral FTAs.