The Effects of FTA on Trade under Different Degree of Product Substitution and Imports Market Structure

Emerald - Tập 11 Số 2 - Trang 87-110 - 2013
Koo WoongPark1
1Division of International Trade, University of Incheon, 12-1 Songdo-Dong, Yeonsu-Gu, Incheon, Korea

Tóm tắt

We study here the effects of FTA on demand, consumer surplus, dealer profit, and tariff revenue depending on the degree of substitution between two goods and import competition structure in a two country’s static model. We consider monopolist dealer, and perfect competition in imports market. The base model is with a positive tariff and we compare the equilibrium with a zero tariff under FTA. The rankings in the consumer utility are such that it is i) the highest under perfect competition with FTA or without FTA, ii) second highest under monopoly with FTA, and iii) the lowest under monopoly without FTA.

Từ khóa


Tài liệu tham khảo

Andreosso-O’Callaghan, B. (2009), “Economic structural complementarity: How viable is the Korea-EU FTA?” Journal of Economic Studies, 36, 2: 147-167. 10.1108/01443580910955042

Blanchard, O. J. and S. Fischer (1989), Lectures on Macroeconomics, Cambridge, Massachusetts: MIT Press.

Brown, Drusilla K., Kozo Kiyota, and Robert M. Stern (2005), “Computational analysis of the US FTAs with Central America, Australia and Morocco,” World Economy, 1441-1490. 10.1111/j.1467-9701.2005.00743.x

Cheong, Inkyo (2008), “Importance of market access in paving the way towards an East Asian FTA,” Journal of Korea Trade, 12, 2: 1-22.

(2001), Economic effects of Korea-Japan FTA and policy implications on Korea, Korea Institute for International Economic Policy, Seoul. (in Korean)

Dyck, J., M. Gehlhar, and T. Vollrath (2011), “Competitor FTAs putting U.S. ag exports at a disadvantage?” www.westernfarmpress.com, July 16, 2011.

Ishikawa, Jota, Hiroshi Mukunoki, and Yoshihiro Mizoguchi (2007), “Economic integration and rules of origin under international oligopoly,” International Economic Review, 48, 1: 185-210. 10.1111/j.1468-2354.2007.00422.x

Kawabata, Yasushi, Akihiko Yanase, and Hiroshi Kurata (2010), “Vertical trade and free trade agreements,” Journal of the Japanese and International Economies, 24: 569-585. 10.1016/j.jjie.2010.03.002

Park, Sang-Gil, Ki-Kwan Yun, and In-kyo Cheong (2006), “An effect of US bilateral FTA conclusions with Korea, China and Japan on trade structure,” Korea Trade Review, 38, 3: 53-77. (in Korean)

Samuelson, P. A. and W. D. Nordhaus (2010), Economics, 19th ed., New York: McGraw-Hill.

Sohn, Chan-Hyun and Hongshik Lee (2010), “Trade structure, FTAs, and economic growth,” Review of Development Economics, 14, 3: 683-698. 10.1111/j.1467-9361.2010.00574.x

Varian, H. T. (1992), Microeconomic Analysis, 3rd ed., New York: W. W. Norton & Company.