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The Welfare and Sectoral Adjustment Effects of Mega-Regional Trade Agreements on ASEAN Countries

Author

Listed:
  • Hiro Lee

    (Osaka School of International Public Policy, Osaka University)

  • Ken Itakura

    (Graduate School of Economics, Nagoya City University)

Abstract

The U.S. withdrawal from the Trans-Pacific Partnership (TPP) has had an influence on the prospects of mega-regional trade agreements (MRTAs). In the Asian Pacific, negotiations for the Regional Comprehensive Economic Partnership (RCEP) might accelerate. In addition, ministers from the 11 other TPP signatories have confirmed their intention to proceed with the TPP without U.S. participation. Using a dynamic computable general equilibrium (CGE) model, we estimate welfare and sectoral output adjustment effects of alternative sequencings of MRTAs on ASEAN countries. Welfare gains for ASEAN countries under the scenario led by the RCEP, followed by RCEP + Taiwan and a Free Trade Area of the Asia-Pacific (FTAAP), are greater than or equal to those under the scenario led by TPP sans US, followed by an enlarged TPP and an FTAAP. When the two scenarios are assumed to develop at the same time, welfare gains of the RCEP and TPP-11 countries are found to be less than the sum of the gains under the first two scenarios. For a number of ASEAN countries, output expansion of textiles and apparel and/or electronic equipment is significant. in the trade and transport margins. When all effects are combined, Vietnam’s economic welfare is projected to increase by 8.4 per cent in 2020 compared with the baseline. Many manufacturing sectors would expand, whereas agricultural, minerals and fuel sectors would contract. The output expansion is most significant in the textiles and wearing apparel sectors.

Suggested Citation

  • Hiro Lee & Ken Itakura, 2017. "The Welfare and Sectoral Adjustment Effects of Mega-Regional Trade Agreements on ASEAN Countries," OSIPP Discussion Paper 17E006, Osaka School of International Public Policy, Osaka University.
    • Handle: RePEc:osp:wpaper:17e006
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    Cited by:

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    2. Ken Itakura & Hiro Lee, 2023. "Should the United States rejoin the Trans-Pacific trade deal?," International Economics and Economic Policy, Springer, vol. 20(2), pages 235-255, May.
    3. Itakura, Ken & Lee, Hiro, 2019. "Estimating the Effects of the CPTPP and RCEP in a General Equilibrium Framework with Global Value Chains," Conference papers 333031, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Hosoe, Nobuhiro & Akune, Yuko, 2019. "Impact of Trade Liberalization on the Japanese Agri-food Sectors: A General Equilibrium Analysis with Farm Heterogeneity and Product Differentiation," Conference papers 333025, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Koffi Dumor & Komlan Gbongli, 2021. "Trade impacts of the New Silk Road in Africa: Insight from Neural Networks Analysis," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 17(02), pages 13-26.
    6. Zhou, Sheng & Xu, Zhiwei, 2022. "Energy efficiency assessment of RCEP member states: A three-stage slack based measurement DEA with undesirable outputs," Energy, Elsevier, vol. 253(C).
    7. A. Kuznetsov V. & А. Кузнецов В., 2018. "Интеграционные процессы в АТР с участием Китая и позиция России // Integration Processes in the asia-Pacific Region with the Participation of China and the Position of Russia," Финансы: теория и практика/Finance: Theory and Practice // Finance: Theory and Practice, ФГОБУВО Финансовый университет при Правительстве Российской Федерации // Financial University under The Government of Russian Federation, vol. 22(6), pages 95-105.
    8. Nobuhiro Hosoe & Yuko Akune, 2019. "Can the Japanese Agri-food Sectors Survive by Promoting their Exports?:A General Equilibrium Analysis with Farm Heterogeneity and Product Differentiation," GRIPS Discussion Papers 19-06, National Graduate Institute for Policy Studies.
    9. Gabriel Mhonyera & Daniel Francois Meyer, 2023. "The Impact of AfCFTA on Welfare and Trade: Nigeria and South Africa in Light of Core Export Competences," Sustainability, MDPI, vol. 15(6), pages 1-16, March.
    10. Huang, Qingbo & Zhang, Xiaohan & Li, Yan, 2023. "Study on the economic effects of China and ASEAN countries from the New International Land-Sea Trade Corridor," Transport Policy, Elsevier, vol. 139(C), pages 123-135.

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    More about this item

    Keywords

    MRTA; RCEP; TPP; FTAAP; CGE model; ASEAN;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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