Future development prospects for countries after signing the RCEP Agreement based on the GTAP Model

Abstract

Subject. The article addresses impact factors for signing the RCEP Agreement (Regional Comprehensive Economic Partnership) on the macro- and microeconomic environment and economic consequences of India's refusal to sign the said Agreement. Objectives. The purpose is to assess the possible impact of signing the RCEP Agreement on the world economy. Methods. The study employs the GTAP Model from the perspective of tariffs. I created two scenarios to simulate and analyze the impact of signing the RCEP Agreement on GDP, changes in human well-being, import and export trade, and specific industries. Results. The study shows that import and export trade and changes in the welfare of RCEP member countries have increased, and the economies of Japan, South Korea, China, Australia and New Zealand have boosted production and improved terms of trade, while the economies of India and ASEAN have experienced a certain negative impact and deterioration in terms of trade. The economies of non-RCEP countries have experienced a negative effect in all aspects. Conclusions. The signing of the RCEP Agreement has a significant positive impact on the economic interests of the participating countries, especially on the developed economies (Japan, Korea and Australia). At the same time, negative values of China, India and ASEAN in terms of GDP and terms of trade may indicate that developing economies will have negative consequences at the initial stage of free trade. However, from the point of view of changing imports and exports, the signing of the RCEP Agreement may increase the overall level of well-being.