S-Space Graduate School of International Studies (국제대학원) Dept. of International Development Policy(국제개발정책학과) Theses (Master's Degree_국제개발정책학과)
Does Free Trade Agreement by East Asia Economies Increase Extensive and Intensive Margin of Trade on Manufacturing Product Exports?
- 국제대학원 국제개발정책학과
- Issue Date
- 서울대학교 대학원
- 학위논문 (석사)-- 서울대학교 국제대학원 : 국제개발정책학과, 2014. 2. 안덕근.
- East Asia has been the most active region in promoting FTAs in the last decade. At the same time there was an increase of manufacturing products exported from East Asia to the world. This paper addresses the question of whether Free Trade Agreements (FTAs) that were engaged by East Asia economies can increase the intensive and extensive margins of export. This paper focuses only on manufacturing products of each East Asia economy by considering that East Asia economiesshare of world manufacturing products exports is steadily increasing. The study collected evidence from 15 East Asia economies in the period of 2001 – 2011 and analyzes the impact of the availability of FTAs by East Asia economies toward their intensive and extensive margins of manufacturing product exports. From this, the results are interpreted as the role of FTAs toward intensive and extensive margins of manufacturing product exports.
The results of the gravity equation show that FTAs by East Asia economies in general are showing positive signs at both intensive and extensive margins at the early years of implementation and becoming significant after the third year of FTA implementation toward the extensive margin. The FTAs implemented among East Asia economies tend to have no positive signs toward the intensive margin in the first five years, while indications toward the extensive margin are significantly positive in the fifth year of FTA implementation.
The study furthermore analyzes the impact difference of Free Trade Agreements engaged by each East Asia economies toward their intensive and extensive margins of manufacturing products exports. The analysis shows that among 15 East Asia economies, only Japan, Korea, and China are experiencing a positive impact from FTAs toward their intensive and extensive margins of manufacturing products. This also reveals significant benefits only in those economies where the government and the business associations are able to provide and facilitate FTAs, as well as those with manufacturing sectors ready to face and utilize FTAs.
Concerning the Indonesia case, among the FTAs engaged by Indonesia, only a bilateral FTA can provide a positive impact toward the intensive and extensive margins of manufacturing products. Currently, the only bilateral FTA is with Japan. This case study shows that for an economy in which the manufacturing sector is still less developed, it is better to have a bilateral FTA to increase their intensive and extensive margins of manufacturing product exports.