On the Use of FTAs by Japanese Firms: Further Evidence

The paper examines the use of free trade agreements (FTAs) by Japanese firms. The FTAs analyzed include Japans FTAs with Mexico, Malaysia and Chile. Based on 1,688 responses to a questionnaire survey conducted in 2008, the study finds that the utilization rate of FTAs ranges between 32.9% (Japan-Mexico FTA) and 12.2% (Japan-Malaysia FTA). The survey results and the statistical analysis of the determinants of the use of FTAs reveal obstacles to using FTAs that include difficulty in obtaining the certificate of origin that is required to use the FTA, lack of knowledge of FTAs, and the small FTA tariff preference that is the difference between the most-favored-nation (MFN) and FTA tariff rates.