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GTAP Resource #3907

"Welfare and Structural Adjustment Implications of Asian Track and Trans-Pacific Track Sequencings of FTA"
by Itakura, Ken and Hiro Lee

In recent years, a growing number of bilateral and plurilateral free-trade agreements (FTAs) involving Asia-Pacific countries have been signed, ratified, or under negotiations. Although there have been studies on sequencing of real and monetary integration, studies on optimal sequencing of FTAs are extremely scarce. However, the magnitudes of sectoral output and employment adjustments resulting from trade accords are great concern to policy makers. Using the Dynamic GTAP model, the relationship between sequencing of FTAs in the Asia-Pacific region and the magnitudes of welfare effects and industrial adjustments of the member countries is examined.

The baseline scenario includes all the FTAs that are currently being implemented, including the ASEAN-China, ASEAN-Korea, ASEAN-Japan, ASEAN-Australia-New Zealand, and ASEAN-India FTAs. In each policy scenario, a different sequencing of FTAs, including but not limited to Trans-Pacific Partnership (TPP), enlarged TPP, ASEAN+3 FTA, ASEAN+6 FTA, and Free Trade Area of the Asia-Pacific (FTAAP), is considered. If a TPP agreement under one sequencing and an East Asian FTA (EAFTA) under another sequencing will enter into force at the same time, followed by more enlarged FTAs, then a larger number of countries are expected to realize greater welfare gains under the Asia-track sequencing. However, given the uncertainty about the establishment of an Asia-wide FTA in the near future, the TPP-track sequencing appears to be an attractive option for most countries in the Asia-Pacific region. With respect to sectoral adjustments, there seem to be no significant differences among the alternative sequencings considered in this study.

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Lee, H. (4/30/2012)
Updated: Lee, H. (5/18/2012)
Visits: 1,716
- Preferential trading arrangements
- Asia (East)
- Asia (Southeast)

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