Economic impact of agricultural trade liberalization under the CPTPP and China’s policy response

As the world’s highest-standard free trade agreement, the CPTPP has made significant breakthroughs in agricultural trade liberalization, setting a new benchmark for regional agricultural cooperation. China is actively considering joining the CPTPP to promote higher-level agricultural opening-up. This paper analyzes the impact pathways of agricultural trade barrier reductions on the agricultural sector, incorporating both tariff and non-tariff barrier factors into a structural model to examine these effects. In light of this, the paper employs a counterfactual analysis method using 2018 multi-country agricultural sector data, segmented by product. Additionally, it examines the welfare effects and structural decomposition of trade barrier reductions in the CPTPP agricultural sector, while also exploring the potential economic impacts of response strategies China might adopt. The simulation results show that the CPTPP mainly affects the welfare levels of agricultural sectors in various countries through trade volume effects, rather than terms of trade effects. The welfare levels of agricultural sectors in member countries improve due to increased regional trade volumes. In contrast, welfare levels in non-member countries decline because of trade diversion effects, with China experiencing relatively minor negative impacts. Further analysis shows that China’s accession to the CPTPP can enhance the welfare of its agricultural sector and strengthen trade links with other members, significantly boosting their welfare levels. By promoting higher levels of opening-up through initiatives such as the Belt and Road Initiative, RCEP, the China-ASEAN Free Trade Area, and the BRICS alliance, China can largely offset the potential negative impacts of not joining the CPTPP.