The model will be revised (Table 2) and a delaying variable, AT (-1), to represent the delaying effect of a lower average duty on commercial value, and the introduction of another dummy variable (D2) to present the implementation of the AJCEP in the first quarter of 2012, which may have impacted exports from the Philippines to Japan. The HAC procedure with Newey-West was used to statistically correct the correlation of self-correction. Jarreau J (2015) Trade Policy Determinants: Lessons from a Structural Gravitational Model. World Bank Econ 29:155-163 Since the geographical distance between the Philippines and Japan is constant, a proxy for distance allowing variability over time would be the weighted average duty (TA). Chen B, Li Y (2014) Analyzing bilateral trade barriers under global trade context: a gravity model adjusted trade intensity index approach. Rev Dev Econ 18(2):326-339 The implementation of a trade agreement should improve trade relations by reducing unnecessary tariff and non-tariff barriers and rebalancing trade barriers. It should therefore have a positive impact on trade. In order to facilitate bilateral trade in electrical products, the two sides will continue negotiations on a provision on the mutual recognition of electrical products. On 29 November 2004, at the ASEAN Summit in Laos, the Governments of Japan and the Philippines reached a fundamental political agreement on the Japan-Philippine Economic Partnership Agreement (JEPA). The agreement was then signed in Helsinki on 9 September 2006 and entered into force on 11 December 2008. This was the first free trade agreement between the Philippines and Japan fourth. More than 10 years have passed since the signing of the agreement and no empirical analysis has been carried out to assess the overall performance of the economic partnership.

Based on data from UN COMTRADE statistics, the Philippines` exports to Japan increased by 24% in 2010, two years after the agreement was implemented. The Philippine Economic Partnership Agreement (日本-フィリピン経済連 4協定) or in (Philippines: Kasunduang Pangkabuhayan ng Hapon at Pilipinas) or well known as JPEPA is an economic partnership agreement on bilateral investment and free trade agreements between Japan and the Philippines….