Study on the Impact of Textile Trade between China and Japan under the RCEP Framework

Min Chen, Xiaoyu Lin, Juan Bao

Article
2024 / Volume 7 / Pages 1401-1416
Received 30 August 2024; Accepted 26 November 2024; Published 11 December 2024
https://doi.org/10.31881/TLR.2024.155

Abstract
Sino-Japanese textile trade is one of the first industries to enjoy tax reduction dividends under the Regional Comprehensive Economic Partnership (RCEP) agreement. This article aims to understand whether the signing of the RECP agreement is an opportunity or a challenge for the Sino-Japanese textile trade. Based on the revealed comparative advantage index analysis of the current situation of the Sino-Japanese textile trade, it was found that Chinese textiles have comparative advantages in the import and export trade of HS61 – HS63. At the same time, a WITS-SMART model was used to simulate tax reduction in the near and long term to analyze the static and dynamic effects of RCEP agreement on Chinese and Japanese textiles. In the short term, China will benefit more from Japan’s tax reduction; in the long run, both China and Japan can benefit from the other’s tax reduction and the total effect of trade will be doubled, with good trade potential and prospects. According to the research findings, the Chinese textile industry should seize the opportunities brought by the RCEP agreement to achieve better and faster development.

Keywords
Sino-Japanese textile trade, trade effect, China, Japan, WITS-SMART mode, RCEP framework