Economic Impact of the Japan–China–USA Free Trade Agreement on Japan using both Static and Dynamic GTAP Models

Abstract

The Japanese government has been actively involved in so-called mega Free Trade Agreements (FTAs). The purpose of this paper is to measure the potential impact of the Japan–China–USA Free Trade Agreement (JCUFTA) on Japan; in particular, on the Japanese agricultural sector using static and dynamic GTAP models. When tariffs are eliminated between Japan, the USA and China, the GDPs of the three countries will all increase, but the impact on the GDPs of the three countries is less than 1% in both static and dynamic models. The results also show that the total value of agricultural production in Japan is expected to decline by more than 10%.