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How the Movement of Natural Persons Agreement Could Fuel FTAs

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  • KOMORIYA Yoshimasa

Abstract

We use an international oligopoly model to explore the effects of reductions in trade cost (non-tariff barrier) and travel cost on the domestic and foreign economies, when the choice of the foreign direct investment (FDI) production level is endogenous. In the case where the home firm produces in both countries, consumers invariably gain from the cost reductions, but the effects on producers are very complex. Using these findings, we discuss the importance of the movement of natural persons (MNP) agreement and its great potential in creating a free trade agreement (FTA) between the two countries.

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  • KOMORIYA Yoshimasa, 2014. "How the Movement of Natural Persons Agreement Could Fuel FTAs," Discussion papers 14041, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:14041
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    References listed on IDEAS

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    1. Ishikawa, Jota & Morita, Hodaka & Mukunoki, Hiroshi, 2010. "FDI in post-production services and product market competition," Journal of International Economics, Elsevier, vol. 82(1), pages 73-84, September.
    2. Jota Ishikawa & Yoshimasa Komoriya, 2009. "Trade costs, wage rates, technologies, and reverse imports," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 42(2), pages 615-638, May.
    3. Neumayer, Eric, 2011. "On the detrimental impact of visa restrictions on bilateral trade and foreign direct investment," LSE Research Online Documents on Economics 37226, London School of Economics and Political Science, LSE Library.
    4. Oldenski, Lindsay, 2012. "Export Versus FDI and the Communication of Complex Information," Journal of International Economics, Elsevier, vol. 87(2), pages 312-322.
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