RCEP’s Strategic Influence on Global Trade of Beverages & Tobacco and Iron & Steel Sectors: A Computable General Equilibrium Analysis

The study evaluates the impact of the RCEP on trade, labour dynamics and industrial output in the B&T and I&S sectors. Moreover, RCEP acts as a catalyst for regional integration and disruptor of existing trade equilibria. It is expected that by 2030, RCEP has the potential to add $209 billion to global income and about half a trillion dollars to the international market. This study employs the CGE model (GTAP) database to derive evaluations. The model assumes a FTA in B&T and I&S among 15 member nations of RCEP, to assess their influence on trade flows, gross domestic product, welfare, industrial production and employment. The study highlights skewed results where main beneficiaries such as Singapore, Japan and South Korea are expected to witness benefits of trade and economic gains. Non-members like India, EU, ROW and USA are expected to experience a clear downfall in terms of trade and related effects. Strikingly, the study also finds that RCEP nations like Brunei, LaoPDR, Thailand, Indonesia, Philippines are at a losing end despite the FTA. Specifically, the trade gains in B&T accrues to Singapore’s economy while that of I&S accrues to Japan and South Korea. The CGE evaluated results noted critical reallocation trends with different sectors of both member and non-member of RCEP owing to FTA, under the study. For instance, Malaysia is expected to undergo industrial production and labour demand in the B&T sector, demonstrating competitive pressure. Also, the B&T and I&S trade is observed to divert away from non-RCEP members. The study emphasizes strategic policy implications for non-member nations to indulge in bilateral trade agreements outside the RCEP block. The study offers critical insights into the structural and policy adjustments required to optimize outcomes by addressing gaps.