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China and the Trans-Pacific Partnership: A Numerical Simulation Assessment of the Effects Involved

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  • Chunding Li
  • John Whalley

Abstract

type="main" xml:id="twec12123-abs-0001"> The Trans-Pacific Partnership (TPP) is a new negotiation on cross-border liberalisation of goods and service flows going beyond WTO disciplines and focused on issues such as regulation and border controls. This paper uses numerical simulation methods to assess the potential effects of a TPP agreement on China and also China's inclusion or exclusion on other countries. We use a numerical 11-country global general equilibrium model with trade costs and inside money. Trade costs are calculated using a method based on gravity equations. TPP barriers potentially removable are trade costs less tariffs. Simulation results reveal that China will be slightly hurt by TPP initiatives in welfare when China is out, but the total production and export will be increased. Other non-TPP countries will be mostly hurt in welfare, but member countries will mostly gain. If China takes part in TPP, she will significantly gain and increase other TPP countries' gain as well. The comparison of TPP effects and global free trade effects show that the positive effects of global free trade are stronger than TPP effects. Japan's joining TPP would be beneficial to both herself and most of other TPP countries, but which negative effects on China's welfare when out of TPP will increase further.

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  • Chunding Li & John Whalley, 2014. "China and the Trans-Pacific Partnership: A Numerical Simulation Assessment of the Effects Involved," The World Economy, Wiley Blackwell, vol. 37(2), pages 169-192, February.
    • Handle: RePEc:bla:worlde:v:37:y:2014:i:2:p:169-192
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    Cited by:

    1. Li, Chunding & Whalley, John, 2017. "How close is Asia already to being a trade bloc?," Journal of Comparative Economics, Elsevier, vol. 45(4), pages 847-864.
    2. Mohammad Masudur Rahman & Chanwahn Kim & Prabir De, 2020. "Indo-Pacific cooperation: what do trade simulations indicate?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-17, December.
    3. Takeshi Yagihashi & David D. Selover, 2017. "How Do the Trans-Pacific Economies Affect the USA? An Industrial Sector Approach," The World Economy, Wiley Blackwell, vol. 40(10), pages 2097-2124, October.
    4. Chunding Li & Jing Wang & John Whalley, 2014. "Numerical General Equilibrium Analysis of China's Impacts from Possible Mega Trade Deals," NBER Working Papers 20425, National Bureau of Economic Research, Inc.
    5. Pao‐Li Chang & Phuong T. B. Nguyen, 2022. "Global value chains and the CPTPP," The World Economy, Wiley Blackwell, vol. 45(12), pages 3780-3832, December.
    6. Garcia, Jose & Perez-Restrepo, Camilo & Uribe Jaramillo, Maria Teresa, 2017. "Understanding the relationship between Pacific Alliance and the mega-regional agreements in Asia-Pacific: what we learned from the GTAP simulation," Conference papers 332916, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Lee, Hiro & Itakura, Ken, 2017. "Potential Costs of U.S. Withdrawal from the Trans-Pacific Partnership," Conference papers 332825, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Chunding Li & John Whalley & Chuantian He & Chuangwei Lin, 2021. "The 2008 Financial Crisis and the Lack of Retaliatory Trade Intervention," CESifo Economic Studies, CESifo Group, vol. 67(1), pages 78-105.
    9. Lee, Hiro & Itakura, Ken, 2018. "The welfare and sectoral adjustment effects of mega-regional trade agreements on ASEAN countries," Journal of Asian Economics, Elsevier, vol. 55(C), pages 20-32.
    10. Chuantian He & Chunding Li & John Whalley, 2018. "General equilibrium trade modelling with Canada–US transportation costs," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 27(7), pages 806-829, October.
    11. Li, Chunding & Wang, Jing & Whalley, John, 2016. "Impact of mega trade deals on China: A computational general equilibrium analysis," Economic Modelling, Elsevier, vol. 57(C), pages 13-25.
    12. Lee, Hiro & Itakura, Ken, 2015. "Mega-regional free trade agreements in the Asia-Pacific: How do productivity gains, cost mitigations and agricultural policy reforms affect the results?," Conference papers 332589, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    13. Christopher S.P. Magee, 2017. "The Increasing Irrelevance of Trade Diversion," Kyklos, Wiley Blackwell, vol. 70(2), pages 278-305, May.
    14. Asci, Serhat C. & Paggi, Mechel & Yamazaki, Fumiko, 2016. "Implications of Trans-Pacific Partnership for the US Dairy Industry," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 19(B), pages 1-16, August.
    15. Li, Chunding & Lin, Xin, 2021. "COVID-19 and trade: Simulated asymmetric loss," Journal of Asian Economics, Elsevier, vol. 75(C).
    16. Chunding Li & John Whalley, 2021. "Effects of the comprehensive and progressive agreement for trans‐pacific partnership," The World Economy, Wiley Blackwell, vol. 44(5), pages 1312-1337, May.
    17. Lee, Hiro & Itakura, Ken, 2016. "The Implications of the Trans-Pacific Partnership for Japan: Agricultural Policy Reforms and Productivity Gains," Conference papers 332771, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    18. Baybars Karacaovali & Deveraux Talagi, 2017. "International Trade Effects of Trans-Pacific Partnership for North America," Working Papers 201701, University of Hawaii at Manoa, Department of Economics.
    19. Muhammad Aamir Khan & Naseeb Zada & Kakali Mukhopadhyay, 2018. "Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-20, December.
    20. Hiro Lee & Ken Itakura, 2015. "Applied General Equilibrium Analysis of Mega-Regional Free Trade Initiatives in the Asia-Pacific," OSIPP Discussion Paper 15E001, Osaka School of International Public Policy, Osaka University.
    21. Cao, Li & Jiang, Junhua & Piljak, Vanja, 2023. "Did mega-regional trade agreements reshuffle the financial influence of the US, China, and Japan in ASEAN? Evidence from the volatility-spillover effects," Research in International Business and Finance, Elsevier, vol. 65(C).

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