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An Analysis of the Potential Economic Effects of Bilateral, Regional, and Multilateral Free Trade

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  • Kozo Kiyota

Abstract

This paper presents a computational analysis of the potential economic effects of trade liberalization in various regional and bilateral free trade agreements (FTAs) that have been negotiated in recent years and the negotiations currently in process, as well as the effects of global (multilateral) free trade. The analysis is based on the Michigan Model of World Production and Trade. The major findings are summarized as follows. First, the effects of regional FTA are larger than those of bilateral FTA. Second, among FTA member countries, small countries have larger benefits (in terms of the percentage of GDP) than large countries. Finally, the effects of multilateral free trade are significantly larger than those of bilateral and regional FTAs.

Suggested Citation

  • Kozo Kiyota, 2006. "An Analysis of the Potential Economic Effects of Bilateral, Regional, and Multilateral Free Trade," Discussion papers 06027, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:06027
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    Cited by:

    1. Saputra, Wempi & Trilaksana, Ari Cahyo, 2013. "Toward ASEAN Economic Community: Revitalising Indonesia’s Position in Financial and Customs Cooperation," MPRA Paper 60823, University Library of Munich, Germany, revised 23 Jun 2014.
    2. 武田 史郎, 2007. "貿易政策を対象とした応用一般均衡分析," Discussion Papers (Japanese) 07010, Research Institute of Economy, Trade and Industry (RIETI).
    3. Hur, Jung & Park, Cheolbeom, 2012. "Do Free Trade Agreements Increase Economic Growth of the Member Countries?," World Development, Elsevier, vol. 40(7), pages 1283-1294.

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