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The effects of the TPP in the Mexican economy: CGE assessment

Author

Listed:
  • Gabriela Ortiz Valverde
  • María de la Concepción Latorre Muñoz

Abstract

The Trans-Pacific Partnership (TPP) is an ambitious multilateral agreement. Only a few studies have comprehensively evaluated the effects of TPP in different regions or have compared it with other Free Trade Agreements (TTIP, RCEP) using a CGE methodology. The TPP was signed in October 2015. That is why previous studies were done in a framework of uncertainty about the final outcome of the negotiations. The goal of this paper is to offer an updated analysis based on the TPP that has been signed. We focus in Mexico because it plays an important role to consolidate the bridge, between North American region and the Pacific Alliance. By contrast, previous studies have mainly focused on Asian countries. In addition, given the relative increase of services in the trade, we will pay particular attention to the impact of lowering those specific barriers. We want to analyze the effects of reduction in non-tariffs barriers and evaluate its effects at the microeconomic and macroeconomic level. We use a computable general equilibrium (CGE) model, which incorporates the complex analysis of reductions in NTBs. The estimates from NTBs are taken from the existing estimations of gravity-models, which provide Ad valorem tariff equivalents of the NTBs. We estimate an increase on production and trade flow across sectors, as well as in GDP, welfare and aggregate exports and imports. Because the TPP was signed in October 2015. This could be the right time to put into perspective the results of previous studies with ours.

Suggested Citation

  • Gabriela Ortiz Valverde & María de la Concepción Latorre Muñoz, 2016. "The effects of the TPP in the Mexican economy: CGE assessment," EcoMod2016 9385, EcoMod.
  • Handle: RePEc:ekd:009007:9385
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    References listed on IDEAS

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    1. Lionel Fontagné & Amélie Guillin & Cristina Mitaritonna, 2011. "Estimations of Tariff Equivalents for the Services Sectors," Working Papers 2011-24, CEPII research center.
    2. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
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    Keywords

    México; General equilibrium modeling (CGE); Trade and regional integration; All keywords.

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