Analysis Of Japan’s Free Trade Area Strategy

Since the1990s, along with changes in the global economic environment and national development strategy, regional economic integration is accelerating.The implementation of Japan’s FTA strategy is rather late, but its development is fast. As of December2013, Japan has signed the FTA with13countries gradually, and there are a number of FTAs in negotiations and feasibility study. After ten years of development, Japan’s FTA strategy has improved.In recent years, Japan has set a higher goal in the FTA strategy, that is to build high quality FTA with its major trade partners. The FTA in negotiating of Japan includes three important Multil-ateral FTA of Asia-Pacific Area, namely the Trans-Pacific Partnership Agreeme-nt (TPP), Regional Comprehensive Economic Partnership (RCEP) and CJK FTA. At the same time, the FTA with EU is in negotiating,and the FTA with Australia has reached a preliminary agreement."FTA economic territory" of Japan is showing rapid expansion. Under this background, it is necessary to analyze Japan’s FTA strategy, effectiveness and future trend deeply, providing a reference for China in developing economic cooperation policy and regional economic integration policy with Japan.Based on the review of the theory of regional economic integration, the paper mainly summarizes the relevant literature analyzing Japan’s FTA strategy in two study method:economic effect analysis and political economy analysis. Then by analyzing the relevant government documents released by Japan, the paper collat-es and summarizes the Japan’s FTA strategy from passive to active, comparing the specific areas and content of Japan’s FTA signed and summarizing several characteristics that Japan’s FTA strategy exhibits.the comparative study of the FTA’s contens is the innovation of this paper. In addition, the paper also analyzes the economic effects of Japan’s FTA strategy.Firstly, using Japan’s trade and investment data, a comparative analysis is made about the effects of six FTAs that have longer period. The implementation of six FTAs expanded the exports of Japan to six countries, especially car and machinery.Meanwhile improved the trade environment and increased Japan’s direct investment. In order to verify the results of above, using the gravity model,the paper analyzed the trade effects of six FTAs empirically. From the regression results, the trade creation effect of Japan’s FTA is obvious,but trade diversion effect is not significant.The political economy analysis about Japan’s FTA strategy is also conducted from three points:the reasons why Japan did not immediately change the trade policy in the tide of regional economic integration; game between different interest groups in promoting the FTA strategy; the reasons why Japan chosen the East Asia area as the main area of its FTA strategy.Finally, the paper summarizes the research findings and future research directions, and proposed measures that China should take facing the aggressive FTA strategy of Japan.