Now Japan is negotiating with Korea about the free trade agreement(FTA) which aims at zero tariffs. If the FTA between Japan and Korea include raw milk, how will raw milk trade flow between Japan and Korea change? In this paper, we analyze this problem using two quantitive methods. One is a simultaneous model in which we analyze three cases: (1) trade between Kyushu and Korea, (2) trade among Kyushu, Korea and China and (3) trade among Kyushu, Korea and China introducing "Domestic Premium." The other is a single-product dual-structure spatial imperfect competition equilibrium model (Kawaguchi et al., 1994) in which we analyze raw milk trade Japanese 9 regions and Korea.
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