Effects of the comprehensive and progressive agreement for trans‐pacific partnership

Abstract

AbstractThis paper uses a numerical multi‐country and multi‐sector general equilibrium model with endogenous trade imbalance and trade cost to simulate the effects of the Comprehensive and Progressive Agreement for Trans‐Pacific Partnership (CPTPP) and its future member expansion. Simulation results show that most member countries will benefit from trade integration and that most non‐member countries will lose due to the exclusion effects of the regional trade agreement, but effects for specific countries differ. The entry of the US, China, India and the EU to the CPTPP will significantly increase member countries’ benefits, and their entry will decrease the losses of non‐member countries. The US withdrawal from the CPTPP has a negative effect on the US, which will increase as more countries join. The world as a whole will gain from the trade deal.