The Research Of Japanese FTA’s Trade Effect Based On Gravity Model

Since 1990s,the process of regional economic integration has been warming up around the world.Different kinds of RTAs have been signed in different regions.Japan,as a developed country,its FTA strategy came late.But since the beginning of the 21st century,Japan has changed its strategic direction in regional economic integration and accelerated the pace of signing FTA agreements with countries in various regions.Until March 2017,Japan has signed 14 FTAs and put into operation in various regions including countries of all development levels.All of these countries have a strong industrial relationship with Japan.The development of the Japanese FTA has promoted Japan’s trade development and opened the way for Japanese companies to enter overseas markets.At the same time,Japan actively joined the high-standard,high-quality wide-area FTA negotiations,such as RCEP and Japan-Europe FTA.The Japanese government competes with China,South Korea compete for the leadership in the economic integration of Asia.For China,competition and cooperation with Japan are unavoidable in the future,so it is necessary to summarize the development characteristics,outcomes,experience and lessons of Japan’s FTA strategy providing a useful reference for the development of China’s FTA strategy.The paper summarizes the background first.And then the development of the regional economic integration theory and the research on Japan’s FTA strategy.Then,based on the reality,this paper summarizes the motivations,course and current situation of Japan’s FTA strategy in order to draw a conclusion on it.After that,the paper analyzes the trade creation effect and the trade diversion effect brought by Japan’s FTA strategy to Japan using the Trade Gravity Model.Taking the 12 FTA of Japan,which has been put into operation for more than 5 year,into consideration,the paper analyzes the trade creation effect of the Japanese FTA as a whole using the 14-year trade data.Then,according to the theoretical estimation of the Trade Gravity Model and the degree of deviation from the actual trade,the trade diversion effect of seven major non-FTA trading partners in Japan was measured.It is concluded that the development of Japan’s FTAs have a positive effect on Japan’s trade.And it doesn’t have a trade diversion effect generally.In the last chapter,the paper summarizes the research results of the whole paper.It also summarizes the experiences and lessons learned from the development of the Japan’s FTA strategy.The paper summarizes what China can learn from the development of Japan’s FTA strategy and use it to compete and cooperate with Japan in the near future.