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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
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