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Trade Liberalization and Employment Linkages in the Pacific Basin


  • Hiro Lee

    (University of California)

  • David Roland-Holst



At the 1994 APEC summit in Bogor, Indonesia, it was recommended that trade and investment barriers among the member countries be removed by 2020. Despite general consensus that trade liberalization would accelerate development in this most dynamic trading area, there is very little empirical evidence about the adjustment process which would ensue. In this chapter, a ten-country CGE model is used to estimate the impact of trade liberalization among economies of Pacific Asia and the United States, giving particular attention to the adjustment which would occur in domestic labor markets. Our results elucidate the employment linkages between trading partners and show that the potential for new import demand by developed countries would accelerate employment growth in developing countries. In particular, Pacific trade liberalization could facilitate the emergence of a new reciprocal basis for multilateral gains from trade. Under an expanding system of liberal trade, capital-intensive ...

Suggested Citation

  • Hiro Lee & David Roland-Holst, 1994. "Trade Liberalization and Employment Linkages in the Pacific Basin," OECD Development Centre Working Papers 94, OECD Publishing.
  • Handle: RePEc:oec:devaaa:94-en

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    Cited by:

    1. Thierry Mayer, 2006. "Policy Coherence for Development: A Background Paper on Foreign Direct Investment," OECD Development Centre Working Papers 253, OECD Publishing.
    2. Lee, Hiro & Woodall, Brian, 1998. "Political feasibility and empirical assessments of a Pacific free trade area," MPRA Paper 82340, University Library of Munich, Germany.
    3. Lee, Hiro & Roland-Holst, David, 1999. "Trade-induced pollution transfers and implications for Japan's investment and assistance," MPRA Paper 82359, University Library of Munich, Germany.
    4. Lee, Hiro & Roland-Holst, David W., 1998. "Prelude to the pacific century: Overview of the region, leading issues, and methodology," MPRA Paper 82339, University Library of Munich, Germany.
    5. Roland-Holst, David & Tarp, Finn & Huong, Pham Lan & Thanh, Vo Tri, 2003. "Dragon by the Tail, Dragon by the Head, Bilateralism and Globalism in East Asia," MPRA Paper 29423, University Library of Munich, Germany.

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