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Cost Reduction Effects of "pseudo FTAs" in Asia -Application of a price model based on a multilateral I/O table-

Discussion Papers


March 2010


This paper examines the repercussion effects on the production cost of industries in Asian countries when some countries eliminate tariffs and import commodity taxes on all imports. This kind of analysis is related in some sense to that measuring the effects of FTAs on economies, and thus may be considered as an analysis of “pseudo FTAs.” Examining a number of combinations of “pseudo FTAs” between China, Japan, and ASEAN, it is found that the case of China plus Japan plus ASEAN is the most effective “pseudo FTA” of the combinations in terms of production cost reduction. The method is a form of price model based on the Asian International Input-Output Table. Almost no studies on price models related to multilateral I/O tables have been implemented thus far.

Keywords: Input-Output Models; Input-Output Table and analysis; Trade
JEL classification: C67, D57, F1

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