Working Paper: NBER ID: w26877
Authors: Chunding Li; Xin Lin; John Whalley
Abstract: This paper builds a 29-country numerical general equilibrium model with inside money and trade cost to simulate and compare the effects of China and the US taking part in the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), which is a high standard mega regional trade agreement. Comparison results show that China will benefit CPTPP member countries more than the US on trade, GDP, and manufacturing employment. China’s entering the CPTPP can also benefit most non-member countries on GDP and manufacturing employment. By joining, the US will benefit the whole world more, as the US economic scale is larger than that of China. Our simulation results reveal that China will be more welcomed to the CPTPP by member countries.
Keywords: Comprehensive and Progressive Agreement for Transpacific Partnership; Numerical General Equilibrium; China; United States
JEL Codes: F53; C68
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| China's accession to the CPTPP (F15) | GDP increases for member countries (O52) |
| China's accession to the CPTPP (F15) | trade increases for member countries (F15) |
| China's accession to the CPTPP (F15) | manufacturing employment increases for member countries (L60) |
| US's accession to the CPTPP (F15) | GDP increases for member countries (O52) |
| US's accession to the CPTPP (F15) | welfare gains for member countries (D60) |
| China's accession to the CPTPP (F15) | world manufacturing employment increases (O14) |
| US's accession to the CPTPP (F15) | world manufacturing employment increases (O14) |
| China's accession to the CPTPP (F15) | reduced losses for non-member countries (F13) |