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Quantitative impacts of alternative East Asia Free Trade Areas: A Computable General Equilibrium (CGE) assessment

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  • Kitwiwattanachai, Anyarath
  • Nelson, Doug
  • Reed, Geoffrey

Abstract

This paper analysis the relative economic effects of four East Asian Free Trade Area (FTA) options. A particular feature of the model, which is an extension from a standard CGE model, is the introduction of unemployment with the intention of assessing the changes in the real wage and unemployment in each region under each of those options. The simulation results suggest that a preferred strategy for member regions is the "East Asia FTA" multilateral agreement,1 which would yield higher gains in welfare and greater economic impacts than any of the other possible bilateral agreements - ASEAN-China, ASEAN-Japan and ASEAN-Korea. However, such an 'ideal' multilateral economic integration might be deterred by the uneasy relationship between Japan and other East Asian nations, reflecting their economic and political differences.

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  • Kitwiwattanachai, Anyarath & Nelson, Doug & Reed, Geoffrey, 2010. "Quantitative impacts of alternative East Asia Free Trade Areas: A Computable General Equilibrium (CGE) assessment," Journal of Policy Modeling, Elsevier, vol. 32(2), pages 286-301, March.
  • Handle: RePEc:eee:jpolmo:v:32:y::i:2:p:286-301
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    2. Ganeshan Wignaraja, 2013. "Regional Trade Agreements and Enterprises in Southeast Asia," Trade Working Papers 23718, East Asian Bureau of Economic Research.
    3. Mario Holzner, 2013. "Impact of Croatian EU Accession on Regional Trade Patterns," wiiw Policy Notes 10, The Vienna Institute for International Economic Studies, wiiw.
    4. Saputra, Wempi & Trilaksana, Ari Cahyo, 2013. "Toward ASEAN Economic Community: Revitalising Indonesia’s Position in Financial and Customs Cooperation," MPRA Paper 60823, University Library of Munich, Germany, revised 23 Jun 2014.
    5. Manzano, George N. & Martin, Kristine Joy, 2015. "Implications of a Philippine-US Free Trade Agreement on Trade in Goods: An Indicator Approach," Discussion Papers DP 2015-42, Philippine Institute for Development Studies.
    6. Jeong-Soo OH & Phouphet Kyophilavong, 2015. "Trade Liberalization and Poverty in Developing Countries: Literature Survey," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(2), pages 86-94, Fabruary.
    7. Bhattacharyya, Ranajoy & Mandal, Avijit, 2016. "India–ASEAN Free Trade Agreement: An ex post evaluation," Journal of Policy Modeling, Elsevier, vol. 38(2), pages 340-352.
    8. L. Walters & H.R. Bohlmann & M.W. Clance, 2016. "The Impact of the COMESA-EAC-SADC Tripartite Free Trade Agreement on the South African Economy," Working Papers 635, Economic Research Southern Africa.
    9. Zhou, Jing & Latorre, María C., 2014. "How FDI influences the triangular trade pattern among China, East Asia and the U.S.? A CGE analysis of the sector of Electronics in China," Economic Modelling, Elsevier, vol. 44(S1), pages 77-88.
    10. Bouët, Antoine & Berisha-Krasniqi, Valdete & Estrades, Carmen & Laborde, David, 2012. "Trade and investment in Latin America and Asia: Perspectives from further integration," Journal of Policy Modeling, Elsevier, vol. 34(2), pages 193-210.
    11. Qi, Tianyu & Winchester, Niven & Karplus, Valerie J. & Zhang, Da & Zhang, Xiliang, 2016. "An analysis of China's climate policy using the China-in-Global Energy Model," Economic Modelling, Elsevier, vol. 52(PB), pages 650-660.
    12. Wannaphong Durongkaveroj and Rossarin Osathanunkul & Rossarin Osathanunkul, 2013. "Regional multipliers of social accounting matrix and the effective eradication of poverty," The Empirical Econometrics and Quantitative Economics Letters, Faculty of Economics, Chiang Mai University, vol. 2(4), pages 39-52, December.
    13. Xiang, Hongjin & Kuang, Yanxiang & Li, Chenhua, 2017. "Impact of the China–Australia FTA on global coal production and trade," Journal of Policy Modeling, Elsevier, vol. 39(1), pages 65-78.
    14. Tanaka, Kiyoyasu & Arita, Shawn, 2016. "The impact of regional investment liberalization on foreign direct investment: A firm-level simulation assessment," Japan and the World Economy, Elsevier, vol. 37, pages 17-26.
    15. Winchester, Niven, 2009. "Is there a dirty little secret? Non-tariff barriers and the gains from trade," Journal of Policy Modeling, Elsevier, vol. 31(6), pages 819-834, November.
    16. Manzano, George N. & Martin, Kristine Joy, 2015. "Implications of a Philippine-US Free Trade Agreement on Trade in Goods: An Indicator Approach," Research Paper Series DP 2015-42, Philippine Institute for Development Studies.
    17. Wignaraja, Ganeshan, 2014. "The determinants of FTA use in Southeast Asia: A firm-level analysis," Journal of Asian Economics, Elsevier, vol. 35(C), pages 32-45.
    18. Cheong, Inkyo, 2013. "Negotiations for the Trans-Pacific Partnership Agreement: Evaluation and Implications for East Asian Regionalism," ADBI Working Papers 428, Asian Development Bank Institute.
    19. Shawn ARITA & TANAKA Kiyoyasu, 2013. "Regional Investment Liberalization and FDI," Discussion papers 13088, Research Institute of Economy, Trade and Industry (RIETI).
    20. Lee, Tsung-Chen & Chang, Young-Tae & Lee, Paul T.W., 2013. "Economy-wide impact analysis of a carbon tax on international container shipping," Transportation Research Part A: Policy and Practice, Elsevier, vol. 58(C), pages 87-102.

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