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The Possible Effects of Transatlantic Trade and Investment Partnership and Trans-Pacific Partnership on Chinese Economy

Author

Listed:
  • Aslan, Buhara
  • Mavuş, Merve
  • Oduncu, Arif

Abstract

The failure to advance the multilateral trade negotiations of the World Trade Organization (WTO) was a disruption for the international trading system. Alternatively, many countries have commenced to establish bilateral and regional Free Trade Agreements (FTA). Among those agreements the Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP) are agreements with members from across the Atlantic and the Pacific respectively. This note focuses on the impacts of these agreements on Chinese economy under three scenarios. The effects of various scenarios on Chinese GDP and export are studied by using the Global Trade Analysis Project (GTAP) database and a general equilibrium model. To the best of our knowledge, we are the first to analytically analyze the economic impacts of the TTIP on Chinese economy. In all of the scenarios the TTIP is realized and China never becomes a member of it. In the first scenario the TPP is not realized. In the second scenario the TPP is realized and China is excluded from it. In the last scenario the TPP is realized and China is included in the initiative. The results suggest that when only TTIP is realized, Chinese economic variables are negatively affected. When both TTIP and TPP are realized and China is excluded, the combined damage in Chinese economy is higher than the damage of TTIP alone. On the other hand, inclusion of China in the TPP affects its economic variables positively despite the negative effects of the TTIP. In other words, positive impacts of participation of China in the TPP compensate for the negative impacts of the TTIP.

Suggested Citation

  • Aslan, Buhara & Mavuş, Merve & Oduncu, Arif, 2014. "The Possible Effects of Transatlantic Trade and Investment Partnership and Trans-Pacific Partnership on Chinese Economy," MPRA Paper 53431, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:53431
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    References listed on IDEAS

    as
    1. Gemma Estrada & Donghyun Park & Innwon Park & Soonchan Park, 2012. "China's Free Trade Agreements with ASEAN, Japan and Korea: A Comparative Analysis," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 20(4), pages 108-126, July.
    2. Hiro Lee & David Roland-Holst & Dominique van der Mensbrugghe, 2004. "China's Emergence and the Implications of Prospective Free Trade Agreements in East Asia," Discussion Paper Series 156, Research Institute for Economics & Business Administration, Kobe University.
    3. Joseph Francois & Miriam Manchin & Hanna Norberg & Olga Pindyuk & Patrick Tomberger, 2013. "Reducing Transatlantic Barriers to Trade and Investment: An Economic Assessment," IIDE Discussion Papers 20130401, Institue for International and Development Economics.
    4. Fritz Breuss & Joseph F. Francois, 2011. "EU-South Korea FTA – Economic Impact for the EU and Austria," FIW Policy Brief series 010, FIW.
    5. Kenichi Kawasaki, 2003. "The Impact of Free Trade Agreements in Asia," Discussion papers 03018, Research Institute of Economy, Trade and Industry (RIETI).
    6. Walmsley, Terrie & Angel Aguiar & Badri Narayanan, 2012. "Introduction to the Global Trade Analysis Project and the GTAP Data Base," GTAP Working Papers 3965, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    7. Chunding Li & John Whalley, 2012. "China and the TPP: A Numerical Simulation Assessment of the Effects Involved," NBER Working Papers 18090, National Bureau of Economic Research, Inc.
    8. Walmsley, Terrie & Angel Aguiar & Badri Narayanan, 2012. "Introduction to the Global Trade Analysis Project and the GTAP Data Base," GTAP Working Papers 3965, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    9. Peter A. Petri & Michael G. Plummer & Fan Zhai, 2012. "The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6642, October.
    10. Mahinda Siriwardana & Jinmei Yang, 2006. "Economic Effects of the Proposed Australia-china Free Trade Agreement," EcoMod2006 272100084, EcoMod.
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    Cited by:

    1. Seda Ekmen Ozcelik, 2018. "The Potential Effects of TPP, TTIP and Trump's Tariffs on China's Competitiveness in the US Market," World Journal of Applied Economics, WERI-World Economic Research Institute, vol. 4(2), pages 95-115, December.
    2. Yuhong Sun & Yifei Mu & Yang Jun, 2016. "An Analysis of Interaction Effects of China–South Korea and China– Australia FTAs and the Expanding TPP," Naše gospodarstvo/Our economy, Sciendo, vol. 62(4), pages 12-22, December.
    3. Beckman, Jayson & Arita, Shawn & Mitchell, Lorraine, 2015. "The Transatlantic Trade and Investment Partnership and Agriculture: A Quantitative Analysis," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205056, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Free Trade Agreements; Transatlantic Trade and Investment Partnership; Trans-Pacific Partnership; China.;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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