IDEAS home Printed from https://ideas.repec.org/p/qld/uq2004/509.html
   My bibliography  Save this paper

The Trade And Welfare Analysis Of The TPP

Author

Abstract

This paper studies the effects of Trans-Pacific Partnership (TPP) on trade flows and welfare in a general equilibrium framework following the Eaton and Kortum (2002) model. Using comprehensive data including prices, wages, output, and bilateral trade in manufacturing for 38 countries including ASEAN and OECD members, we estimate each country’s various parameters (e.g. openness, competitiveness, state of technology) and conduct calibrations. Our calibration results indicate that the TPP does not always improve all member countries’ welfare, while outside countries may gain from positive externalities. It is found that accession to the TPP is not welfare-enhancing to Japan when labor is internally mobile between manufacturing and non-manufacturing, while Japan is better off from the TPP membership under labor immobility. It is also shown that the TPP benefits more countries, including both members and non-members, if Japan joins the TPP.

Suggested Citation

  • Juyoung Cheong & Shino Takayama, 2014. "The Trade And Welfare Analysis Of The TPP," Discussion Papers Series 509, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:509
    as

    Download full text from publisher

    File URL: https://economics.uq.edu.au/files/45925/509.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Patrick J. Kehoe & Timothy J. Kehoe, 1994. "Capturing NAFTA's impact with applied general equilibrium models," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 18(Spr), pages 17-34.
    2. Jonathan Eaton & Samuel Kortum, 2012. "Putting Ricardo to Work," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 65-90, Spring.
    3. Burbidge, John B. & James A. DePater & Gordon M. Meyers & Abhijit Sengupta, 1997. "A Coalition-Formation Approach to Equilibrium Federations and Trading Blocs," American Economic Review, American Economic Association, vol. 87(5), pages 940-956, December.
    4. Kimberly A. Clausing, 2001. "Trade creation and trade diversion in the Canada - United States Free Trade Agreement," Canadian Journal of Economics, Canadian Economics Association, vol. 34(3), pages 677-696, August.
    5. Aghion, Philippe & Antras, Pol & Helpman, Elhanan, 2007. "Negotiating free trade," Journal of International Economics, Elsevier, vol. 73(1), pages 1-30, September.
    6. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 441-487.
    7. Kehoe, Timothy J., 2002. "An Evaluation of the Performance of Applied General Equilibrium Models of the Impact of NAFTA," Conference papers 331066, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    8. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
    9. Juyoung Cheong & Shino Takayama & Terence Yeo, 2013. "Preferential Trade Agreements and Welfare: General Equilibrium Analysis," Discussion Papers Series 482, School of Economics, University of Queensland, Australia.
    10. Wylie, Peter J., 1995. "Partial equilibrium estimates of manufacturing trade creation and diversion due to NAFTA," The North American Journal of Economics and Finance, Elsevier, vol. 6(1), pages 65-84.
    11. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Juyoung Cheong & Shino Takayama, 2013. "Who Gains the Most in Preferential Trade Agreements?," Discussion Papers Series 475, School of Economics, University of Queensland, Australia.
    2. Juyoung Cheong & Shino Takayama & Terence Yeo, 2013. "Preferential Trade Agreements and Welfare: General Equilibrium Analysis," Discussion Papers Series 482, School of Economics, University of Queensland, Australia.
    3. Lorenzo Caliendo & Fernando Parro, 2015. "Estimates of the Trade and Welfare Effects of NAFTA," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(1), pages 1-44.
    4. Shalah M. Mostashari, 2011. "Vertical specialization, intermediate tariffs, and the pattern of trade: assessing the role of tariff liberalization to U.S. bilateral trade 1989-2001," Globalization Institute Working Papers 71, Federal Reserve Bank of Dallas.
    5. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    6. Handley, Kyle, 2014. "Exporting under trade policy uncertainty: Theory and evidence," Journal of International Economics, Elsevier, vol. 94(1), pages 50-66.
    7. Anderson, James E. & Yotov, Yoto V., 2016. "Terms of trade and global efficiency effects of free trade agreements, 1990–2002," Journal of International Economics, Elsevier, vol. 99(C), pages 279-298.
    8. Aichele, Rahel & Heiland, Inga, 2018. "Where is the value added? Trade liberalization and production networks," Journal of International Economics, Elsevier, vol. 115(C), pages 130-144.
    9. Susanto, Dwi & Rosson, C. Parr & Adcock, Flynn J., 2007. "Trade Creation and Trade Diversion in the North American Free Trade Agreement: The Case of the Agricultural Sector," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(1), pages 121-134, April.
    10. Kyle Bagwell & Chad P. Bown & Robert W. Staiger, 2016. "Is the WTO Passé?," Journal of Economic Literature, American Economic Association, vol. 54(4), pages 1125-1231, December.
    11. Pol Antràs & Davin Chor, 2021. "Global Value Chains," NBER Working Papers 28549, National Bureau of Economic Research, Inc.
    12. Emmanuel Dhyne & Ayumu Ken Kikkawa & Magne Mogstad & Felix Tintelnot, 2021. "Trade and Domestic Production Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 643-668.
    13. Yoto Yotov & Mario Larch & James Anderson, 2015. "Growth and Trade: A Structural Estimation Framework," 2015 Meeting Papers 851, Society for Economic Dynamics.
    14. Bosker, Maarten & Westbrock, Bastian, 2024. "The network origins of the gains from trade," Journal of Economic Theory, Elsevier, vol. 216(C).
    15. Mahdi Ghodsi, 2020. "Is Austria’s economy locked-in in the CESEE region? Austria’s competitiveness at the micro-level," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 47(3), pages 669-693, August.
    16. Mario Larch & Yoto V. Yotov, 2016. "General Equilibrium Trade Policy Analysis with Structural Gravity," CESifo Working Paper Series 6020, CESifo.
    17. Patrick Alexander, 2016. "Producer Heterogeneity, Value-Added, and International Trade," Staff Working Papers 16-54, Bank of Canada.
    18. Hayakawa, Kazunobu & Kimura, Fukunari & Laksanapanyakul, Nuttawut, 2016. "Firm-level trade creation and diversion of regional trade agreements in Thailand," IDE Discussion Papers 621, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    19. Magee, Christopher S.P., 2008. "New measures of trade creation and trade diversion," Journal of International Economics, Elsevier, vol. 75(2), pages 349-362, July.
    20. Andrei A Levchenko & Jing Zhang, 2013. "The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 479-519, August.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:qld:uq2004:509. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SOE IT (email available below). General contact details of provider: https://edirc.repec.org/data/decuqau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.