IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v12y2025i1d10.1057_s41599-025-04864-2.html
   My bibliography  Save this article

The impact of RCEP on labour markets in non-member economies: evidence from Taiwan, China

Author

Listed:
  • Cheyuan Liu

    (Guangxi Normal University
    Education Department of Guangxi Zhuang Autonomous Region)

  • Jianrui Zhou

    (Guangxi Normal University)

  • Wen Wen

    (Guangxi Normal University)

  • Fangzhou Liu

    (Guangxi Normal University)

  • Chunyu Zhang

    (Guangxi Normal University
    Krirk University)

Abstract

Taiwan, China’s labour market faces numerous challenges. However, previous studies have given limited attention to the impact of regional trade agreements on Taiwan’s labour force. This study examines the impact of the Regional Comprehensive Economic Partnership (RCEP) on Taiwan’s labour market by assessing its effects on economic growth, labour demand, and wages. Utilising the Global Trade Analysis Project (GTAP) 10.0 database, this study applies the GTAP model to assess the effects of the RCEP on Taiwan’s labour force. The analysis uses data from 2014 that is dynamically projected to 2023. The findings suggest that the RCEP has a negative impact on both labour demand and wages in Taiwan. However, the effects vary across industries and skill levels. In sectors with sensitive regulations, labour employment is positively affected by ‘reverse trade diversion.’ Unskilled labour is more adversely impacted by the RCEP than skilled labour. Furthermore, the RCEP negatively influences Taiwan’s economic growth, including GDP, social welfare, and trade (both imports and exports). Taiwan’s accession to RCEP could reverse these negative impacts. These findings offer valuable insights into the effects of trade liberalisation on the labour market, highlight the importance of regional economic cooperation, and provide essential information for Taiwan’s economic adaptation strategies in the context of regional economic integration.

Suggested Citation

  • Cheyuan Liu & Jianrui Zhou & Wen Wen & Fangzhou Liu & Chunyu Zhang, 2025. "The impact of RCEP on labour markets in non-member economies: evidence from Taiwan, China," Palgrave Communications, Palgrave Macmillan, vol. 12(1), pages 1-11, December.
    • Handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04864-2
    DOI: 10.1057/s41599-025-04864-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-025-04864-2
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-025-04864-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hui Wen & Yu You & Yue Zhang, 2022. "Effects of tariff reduction by regional comprehensive economic partnership (RCEP) on global value chains based on simulation," Applied Economics Letters, Taylor & Francis Journals, vol. 29(20), pages 1906-1920, November.
    2. Noel Gaston & Daniel Trefler, 1997. "The Labour Market Consequences of the Canada-U.S. Free Trade Agreement," Canadian Journal of Economics, Canadian Economics Association, vol. 30(1), pages 18-41, February.
    3. Kazunobu Hayakawa & Tadashi Ito & Fukunari Kimura, 2016. "Trade Creation Effects of Regional Trade Agreements: Tariff Reduction versus Non-tariff Barrier Removal," Review of Development Economics, Wiley Blackwell, vol. 20(1), pages 317-326, February.
    4. Daron Acemoglu & Pascual Restrepo, 2020. "Robots and Jobs: Evidence from US Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 128(6), pages 2188-2244.
    5. Kazunobu Hayakawa & Tadashi Ito & Shujiro Urata, 2021. "Labor Market Impacts of Import Penetration from China and Regional Trade Agreement Partners: The Case of Japan," The Developing Economies, Institute of Developing Economies, vol. 59(3), pages 306-323, September.
    6. Paola Conconi & Manuel García-Santana & Laura Puccio & Roberto Venturini, 2018. "From Final Goods to Inputs: The Protectionist Effect of Rules of Origin," American Economic Review, American Economic Association, vol. 108(8), pages 2335-2365, August.
    7. Salvatore Baldone & Fabio Sdogati & Lucia Tajoli, 2007. "On Some Effects of International Fragmentation of Production on Comparative Advantages, Trade Flows and the Income of Countries," The World Economy, Wiley Blackwell, vol. 30(11), pages 1726-1769, November.
    8. Yin, Yixuan & Luo, Chenyue & Yang, Jing & Chen, Panyu & Chunding, LI, 2024. "Possible development path for agricultural economic and trade cooperation in FTAAP: A numerical simulation," Journal of Asian Economics, Elsevier, vol. 95(C).
    9. González-Rozada, Martín & Ruffo, Hernán, 2024. "Do trade agreements contribute to the decline in labor share? Evidence from Latin American countries," World Development, Elsevier, vol. 177(C).
    10. Justin R. Pierce & Peter K. Schott, 2016. "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, American Economic Association, vol. 106(7), pages 1632-1662, July.
    11. Lee, Woori & Mulabdic, Alen & Ruta, Michele, 2023. "Third-country effects of regional trade agreements: A firm-level analysis," Journal of International Economics, Elsevier, vol. 140(C).
    12. Jintai Lin & Mingxi Du & Lulu Chen & Kuishuang Feng & Yu Liu & Randall V. Martin & Jingxu Wang & Ruijing Ni & Yu Zhao & Hao Kong & Hongjian Weng & Mengyao Liu & Aaron van Donkelaar & Qiuyu Liu & Klaus, 2019. "Carbon and health implications of trade restrictions," Nature Communications, Nature, vol. 10(1), pages 1-12, December.
    13. Shushanik Hakobyan & John McLaren, 2016. "Looking for Local Labor Market Effects of NAFTA," The Review of Economics and Statistics, MIT Press, vol. 98(4), pages 728-741, October.
    14. Tengfei Lei & Rita Yi Man Li & Nuttapong Jotikastira & Haiyan Fu & Cong Wang & Chun-Biao Li, 2023. "Prediction for the Inventory Management Chaotic Complexity System Based on the Deep Neural Network Algorithm," Complexity, Hindawi, vol. 2023, pages 1-11, May.
    15. Pascal Mossay & Takatoshi Tabuchi, 2015. "Preferential Trade Agreements Harm Third Countries," Economic Journal, Royal Economic Society, vol. 125(589), pages 1964-1985, December.
    16. Peter J. Lloyd & Donald Maclaren, 2004. "Gains and Losses from Regional Trading Agreements: A Survey," The Economic Record, The Economic Society of Australia, vol. 80(251), pages 445-467, December.
    17. John Francis & Yuqing Zheng, 2011. "Trade liberalization, unemployment and adjustment: evidence from NAFTA using state level data," Applied Economics, Taylor & Francis Journals, vol. 43(13), pages 1657-1671.
    18. Kailan Tian & Yu Zhang & Yuze Li & Xi Ming & Shangrong Jiang & Hongbo Duan & Cuihong Yang & Shouyang Wang, 2022. "Regional trade agreement burdens global carbon emissions mitigation," Nature Communications, Nature, vol. 13(1), pages 1-12, December.
    19. Lorenzo Caliendo & Maximiliano Dvorkin & Fernando Parro, 2019. "Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock," Econometrica, Econometric Society, vol. 87(3), pages 741-835, May.
    20. Li, Qiaomin & Scollay, Robert & Gilbert, John, 2017. "Analyzing the effects of the Regional Comprehensive Economic Partnership on FDI in a CGE framework with firm heterogeneity," Economic Modelling, Elsevier, vol. 67(C), pages 409-420.
    21. Cheyuan Liu & Jianrui Zhou & Wen Wen & Fangzhou Liu & Liuyin Ji & Chunyu Zhang, 2025. "The Effect of the Regional Comprehensive Economic Partnership on Taiwan’s Global Value Chain of the Electronic Information Industry," Sustainability, MDPI, vol. 17(1), pages 1-16, January.
    22. Xinxiong Wu & Chen Chen Yong & Su Teng Lee, 2024. "Gender disparities in job creation of RCEP in China: a social accounting matrix approach," Applied Economics, Taylor & Francis Journals, vol. 56(48), pages 5699-5712, October.
    23. Jeff Chan, 2019. "Tariffs and the Composition of Employment: Evidence from the Canada–US Free Trade Agreement," Canadian Public Policy, University of Toronto Press, vol. 45(3), pages 342-365, September.
    24. Li Yang & Pivithuru Kumarasinghe, 2024. "Analysis of the impact of RCEP on the industrial and innovation chains of China’s textile and clothing industry," PLOS ONE, Public Library of Science, vol. 19(8), pages 1-17, August.
    25. 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.
    26. Ghaith, Ziad & Kulshreshtha, Suren & Natcher, David & Cameron, Bobby Thomas, 2021. "Regional Computable General Equilibrium models: A review," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 710-724.
    27. Eunbi Kim, 2021. "The Local Labor Market Effects of Korean Automotive Investments in the United States," International Regional Science Review, , vol. 44(6), pages 619-646, November.
    28. Yue Mingyang & Yuan Hankun & Xu Chen & Jin Zhida, 2023. "The impact of trade on employment: New evidence from a global value chains perspective," PLOS ONE, Public Library of Science, vol. 18(9), pages 1-14, September.
    29. Craig R. MacPhee & Wanasin Sattayanuwat, 2014. "Consequence of Regional Trade Agreements to Developing Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 64-94.
    30. Christian Hutter & Enzo Weber, 2023. "Labour market effects of wage inequality and skill-biased technical change," Applied Economics, Taylor & Francis Journals, vol. 55(27), pages 3063-3084, June.
    31. Goh, Soo Khoon & Wong, Koi Nyen & McNown, Robert & Chen, Li-Ju, 2023. "Long-run macroeconomic consequences of Taiwan's aging labor force: an analysis of policy options," Journal of Policy Modeling, Elsevier, vol. 45(1), pages 121-138.
    32. Gour Gobinda Goswami & Farhan Khan & Kazi Labiba & Farhanaj Achol & Tapas Kumar Saha & Aunanna Zulfikar, 2022. "Should Bangladesh join Regional Comprehensive Economic Partnership (RCEP)? The gravity explanation of Bangladesh dilemma," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 19(1), pages 249-269, July.
    33. Yu Liu & Mingxi Du & Qi Cui & Jintai Lin & Yawen Liu & Qiuyu Liu & Dan Tong & Kuishuang Feng & Klaus Hubacek, 2022. "Contrasting suitability and ambition in regional carbon mitigation," Nature Communications, Nature, vol. 13(1), pages 1-9, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gustavo de Souza & Haishi Li, 2025. "The Employment Consequences of Anti-Dumping Tariffs: Lessons from Brazil," CESifo Working Paper Series 11654, CESifo.
    2. Keller, Wolfgang & Utar, Hale, 2023. "International trade and job polarization: Evidence at the worker level," Journal of International Economics, Elsevier, vol. 145(C).
    3. Redding, Stephen, 2020. "Trade and Geography," CEPR Discussion Papers 15268, C.E.P.R. Discussion Papers.
    4. David Autor & Caroline Chin & Anna Salomons & Bryan Seegmiller, 2024. "New Frontiers: The Origins and Content of New Work, 1940–2018," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 139(3), pages 1399-1465.
    5. Colantone, Italo & Ottaviano, Gianmarco & Stanig, Piero, 2021. "The backlash of globalization," LSE Research Online Documents on Economics 113860, London School of Economics and Political Science, LSE Library.
    6. Sergei Guriev & Elias Papaioannou, 2022. "The Political Economy of Populism," Journal of Economic Literature, American Economic Association, vol. 60(3), pages 753-832, September.
    7. Teresa C. Fort & Justin R. Pierce & Peter K. Schott, 2018. "New Perspectives on the Decline of US Manufacturing Employment," Journal of Economic Perspectives, American Economic Association, vol. 32(2), pages 47-72, Spring.
    8. David Autor & David Dorn & Gordon Hanson & Maggie R. Jones & Bradley Setzler, 2024. "Places versus People: The Ins and Outs of Labor Market Adjustment to Globalization," Working Papers 24-78, Center for Economic Studies, U.S. Census Bureau.
    9. Arni, Patrick & Egger, Peter & Erhardt, Katharina & Gubler, Matthias & Sauré, Philip, 2024. "Heterogeneous Impacts of Trade Shocks on Workers," IZA Discussion Papers 16895, Institute of Labor Economics (IZA).
    10. Rodrigo Adão & Costas Arkolakis & Federico Esposito, 2019. "General Equilibrium Effects in Space: Theory and Measurement," NBER Working Papers 25544, National Bureau of Economic Research, Inc.
    11. Justin R. Pierce & Peter K. Schott & Cristina Tello-Trillo, 2022. "Trade Liberalization and Labor-Market Outcomes: Evidence from US Matched Employer-Employee Data," Working Papers 22-42, Center for Economic Studies, U.S. Census Bureau.
    12. Galle, Simon & Lorentzen, Linnea, 2024. "The unequal effects of trade and automation across local labor markets," Journal of International Economics, Elsevier, vol. 150(C).
    13. Crescenzi, Riccardo & Limodio, Nicola, 2021. "The impact of Chinese FDI in Africa: evidence from Ethiopia," LSE Research Online Documents on Economics 108455, London School of Economics and Political Science, LSE Library.
    14. Yang, Yichen & Liu, Wen, 2024. "Free trade agreements and domestic value added in exports: An analysis from the network perspective," Economic Modelling, Elsevier, vol. 132(C).
    15. Yang Liang, 2021. "Job creation and job destruction: The effect of trade shocks on U.S. manufacturing employment," The World Economy, Wiley Blackwell, vol. 44(10), pages 2909-2949, October.
    16. Rodrigo Ad'o & Costas Arkolakis & Federico Esp'sito, 2019. "Spatial Linkages, Global Shocks, and Local Labor Markets: Theory and Evidence," Cowles Foundation Discussion Papers 2163, Cowles Foundation for Research in Economics, Yale University.
    17. Che, Yi & Lu, Yi & Pierce, Justin R. & Schott, Peter K. & Tao, Zhigang, 2022. "Did trade liberalization with China influence US elections?," Journal of International Economics, Elsevier, vol. 139(C).
    18. Boddin, Dominik & Kroeger, Thilo, 2022. "Servitization, Inequality, and Wages," Labour Economics, Elsevier, vol. 77(C).
    19. Alexander Murray, 2017. "The Effect of Import Competition on Employment in Canada: Evidence from the 'China Shock'," CSLS Research Reports 2017-03, Centre for the Study of Living Standards.
    20. Kondo, Illenin O., 2018. "Trade-induced displacements and local labor market adjustments in the U.S," Journal of International Economics, Elsevier, vol. 114(C), pages 180-202.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04864-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.