Hayakawa K, Ito T, Kimura F (2016) Effects of regional trade agreements: tariff reduction compared to non-reduction of tariffs. Rev Dev Econ 20 (1):317-326 Sanora R (2014) All economic freedom is not the same: evidence of a gravity model. Contemp Econ Policy 32 (1): 30-41 Fratianni M, Oh C (2009) Size of regional trade agreements and regional trade distortions. Appl Econ Lett 16:1603 Clausing K (2001) Creation and diversion of trade in the Canada-U.S. Free Trade Agreement. Can J Econ 34 (3):677-696 Zhang Y, Zhang G, Fung H (2007) The prospects of the free trade agreement in China. Chin Econ 40 (2): 5-35 Applied to bilateral or multilateral trade, a country`s mass is generally represented by its economic size relative to its total production or gross domestic product (GDP), while its geographical distance measures the obstacle or resistance to trade with its trading partner. The standard gravitational equation or trading model is a non-linear model consisting of three (3) explanatory variables, as covered by the following equation (Eita 2016); Benedictis and Taglioni 2011a, b): Since 1990, intra-regional trade flows in East Asia have gradually increased through free trade agreements (FTAs). It is also the second wave of regionalism (see Urata 2004; Yoshimatsu 2005; Ali and Caldentey 2007; Liu 2007; Bui 2008; Park and Park 2011; Jalles 2012; Reyes et al. 2014; Suvannaphakdy and Toyoda 2014; Kahouli and Maktouf 2015). Naanwaab C, Diarrassouba M (2013) The impact of economic freedom on bilateral trade: a transnational analysis. Int J Bus Manag Econ Res 4 (1):668 Liu X (2016) Trade Agreement and Economic Growth.

South-Econ J 82 (4):1374-1401 where Xij represents bilateral flows of goods, G is a constant, Mi is the economic size of the country i, Mi is the economic size of the country j, and D represents the geographical distance between the two (2) countries. However, the model is flexible enough to allow its extension by non-economic factors such as population, language, culture and political variables as follows: Rahman K, Molla R, Murad M (2008a) Japan-Malaysia Free Trade Agreement: expectations and achievements. J Comp Int Manag 11 (1): 29-42 Negotiations conducted so far by both sides have agreed on the principle of the essential elements of the agreement, which are worded as follows: Liu T (2007) The impact of regional trade agreements on trade. Chin Econ 40 (2): 70-96 Ami C (2010) Effects of third-country regional trade agreements. World Econ 33 (11):1589-1605 Bui T (2008) Regional integration and long-term economic growth: a comparative case study of Vietnam and Mexico in the Asia-Pacific region. J Int Bus Res 7 (3):1-26 Zhou M (2015) The effectiveness of regional trade agreements, 1958-2006: the impact of institution creation on market expansion. Sociological Forum 30 (3): 721-742 While most of the studies that have been verified so far on this document used the standard gravity model and the fish pseudo-probability model, very little disintegrated data on the volume of trade was used compared to the corresponding reduction in tariffs introduced by the bilateral trade agreement. The causal aspect of the study will be to estimate an empirical model of hypothetical relationships between trade volumes and assumed conditioning variables, and their effects and orders of magnitude over a period of time, which includes or exceeds the implementation of the Japan-Philippines Economic Partnership Agreement (JPEPA). An important element of this aspect is to determine how significant the hypothetical effects of the agreement are and whether or not they correspond to the gravity model. Reyes et al. (2014) used different gravity models.

The first took into account the economic size of countries, distance and other control variables such as language.