Political economy of free trade agreements in China, Japan, and South Korea: Sectoral politics of the FTA wave, 1998-2016

Abstract

The aim of this study is to analyze the different impacts of the determinants of free trade agreements (FTAs) based on the stage of the FTA discussions. By disaggregating the FTA formation process into four stages, this study finds that the influence of industry interest groups has a positive impact on FTA formation in the first stage, when two countries initiate the discussion by establishing a joint study. In contrast, it has a negative impact in the last stage, when signed FTAs need to be ratified in order to enter into force. Political institutions emphasized in the existing studies are likely to be significant in the initial stages, but lose their significance as the process moves forward. The findings of this study collectively support the hypothesis that a given FTA is the result of sectoral politics where interests and the power of industries have a significant influence on trade policy decision-making.