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The Economic Impact of FTAs - Model Simulation Analyses -

The Economic Impact of FTAs - Model Simulation Analyses -. September 2006 Kenichi KAWASAKI ESRI, Cabinet Office. Overview. Macroeconomic Impacts Possibility of “Free rider” gains Relative significance of regional trade liberalization Sectoral Aspects

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The Economic Impact of FTAs - Model Simulation Analyses -

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  1. The Economic Impact of FTAs- Model Simulation Analyses - September 2006 Kenichi KAWASAKI ESRI, Cabinet Office

  2. Overview • Macroeconomic Impacts Possibility of “Free rider” gains Relative significance of regional trade liberalization • Sectoral Aspects Impacts on sectoral trade and production Impacts of sectoral trade liberalization

  3. The Impact of Trade Liberalization • Static Impacts Expansion of exports and production of tradable goods More efficient resource allocation • Dynamic Impacts Capital formation and economic growth Pro-competitive productivity improvements

  4. Macroeconomic Impact of RTAs/FTAsKey Observations and Findings • “Free rider” gains may be limited It is essential to liberalize own markets • Wider liberalization would be much more beneficial FTAs would be steps toward a final goal

  5. The Macroeconomic Impacts of Global Trade Liberalization

  6. Regional vs. Global Trade Lib.(Real GDP Gains in Per cent)

  7. Regional vs. Global Trade Lib.(Real GDP Gains in Per cent)

  8. Sectotal Aspects of RTAs/FTAsKey Observations and Findings • Trade liberalization may result in a realignment of regional production in accordance with the comparative advantage of the regions • The economic impact of wider trade liberalization covering more sectors would be greater

  9. Global Trade Liberalization(Per cent Changes in Sectoral Production)

  10. Global Trade Liberalization(Per cent Changes in Sectoral Production)

  11. The Impact of Sectoral Liberalization

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