Choosing between Multiple Regional Trade Agreements: Evidence from Japan's Imports

16 Pages Posted: 15 Apr 2019

See all articles by Kazunobu Hayakawa

Kazunobu Hayakawa

Institute of Developing Economies (IDE-JETRO)

Shujiro Urata

Waseda University-Graduate School of Asia-Pacific Studies

Taiyo Yoshimi

Chuo University

Date Written: May 2019

Abstract

Mega‐regional trade agreements (RTAs) are likely to overlap with other RTAs. When such overlaps occur, firms must choose the tariff rates from multiple RTAs. By employing data on Japan’s imports by tariff schemes, we investigate how RTA tariff rates affect firms’ decisions on tariff schemes when multiple RTAs exist. Our finding is that RTA utilization rates are higher when tariff rates for that RTA are lower (own effect) and tariff rates for alternative RTAs are higher (cross effect). We also found that the absolute magnitudes of own and cross effects are larger in bilateral and multilateral RTAs, respectively.

Suggested Citation

Hayakawa, Kazunobu and Urata, Shujiro and Yoshimi, Taiyo, Choosing between Multiple Regional Trade Agreements: Evidence from Japan's Imports (May 2019). Review of International Economics, Vol. 27, Issue 2, pp. 578-593, 2019. Available at SSRN: https://ssrn.com/abstract=3371552 or http://dx.doi.org/10.1111/roie.12389

Kazunobu Hayakawa (Contact Author)

Institute of Developing Economies (IDE-JETRO) ( email )

3-2-2 Wakaba, Mihama-ku
Chiba, 261-8545
Japan

Shujiro Urata

Waseda University-Graduate School of Asia-Pacific Studies ( email )

1-21-1 Nishiwaseda
Shinjuku-ku, Tokyo 169-8050
Japan

Taiyo Yoshimi

Chuo University

2nd floor Blg 4 Tampa Campus
742-1 Higashinakano, Hachioji
Tokyo 192-03
Japan

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