Working Paper: CEPR ID: DP1605
Authors: Kym Anderson; Betina Dimaranan; Tom Hertel; Will Martin
Abstract: This paper examines the impacts of key trade reforms likely to affect the APEC region over the next decade. It does so by taking an economy-wide perspective using projections to the year 2005, based on the global CGE model known as GTAP. The paper begins by showing that the empirical impact of implementing the Uruguay Round depends significantly on how China and Taiwan are treated. It then explores the market implications of increased economic growth in China, as well as several policy shocks. It is shown that increased industrial growth in China ? due to China integrating more into the global economy ? would be beneficial to the world, since it would boost industrialization in other Asian countries. Failure to honour Uruguay Round obligations to open textile and clothing markets in OECD countries, on the other hand, is shown to reduce East Asia?s industrialization and thereby slow the growth in this region?s net imports. Further MFN trade liberalization by APEC members, however, could add substantially to the growth and structural changes expected in the region and beyond over the next decade. The latter benefits are shown, though, to depend heavily on the inclusion of agriculture in the APEC reform, something that Northeast Asian countries have been reluctant to do.
Keywords: Asia-Pacific; APEC; Uruguay Round; Global CGE Modelling; Economic Projections
JEL Codes: F13; F17; O53; O17; R13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Uruguay Round inclusion of China and Taiwan (F13) | global economic welfare (D69) |
| increased industrial growth in China (O14) | industrialization in other Asian countries (O14) |
| failure to honor Uruguay Round obligations (F13) | East Asia's industrialization (O14) |
| failure to honor Uruguay Round obligations (F13) | East Asia's net imports (F14) |
| further MFN trade liberalization by APEC members (F13) | growth and structural changes in the region (R11) |
| all goods markets liberalized (F19) | welfare benefits (I38) |