Wing Thye Woo opened the discussion by alluding to an apparent inconsistency in econometric estimates of the effect of free trade agreements (FTAs) on Japan's trade with the sub-category of small partner countries and the overall trade effect of the FTAs. How could one reconcile the large effect on trade with small countries and almost no effect on trade with all FTA member countries? What was the intuition between this implicit negative effect of FTAs on trade with the “other” countries (i.e., countries other than the small ones)?
Prema-chandra Athukorala wanted the author to clearly spell out the procedure followed in extracting data on bilateral trade flows from the UN Comtrade database. Mixing “reporting country” (exporting country) records and “mirror” records (importing country) was not appropriate because the former was on free on board (FOB) basis and the latter on cost, insurance, freight (CIF) basis. According to the information he...