An Empirical Analysis of the Proposed Australia-Japan Free Trade Agreement

Abstract

The success of the proposed Australia-Japan Free Trade Agreement will depend, to a considerable degree, on the manner in which it deals with the problem of agricultural trade between the two countries. This paper seeks to provide a quantitative assessment of the potential impact of an Agreement between Australia and Japan by simulating two scenarios (full trade liberalisation and trade liberalisation excluding agricultural trade) and using the Global Trade Analysis Project model to estimate the effects. The results indicate the possible welfare gains under the two envisaged trade regimes.