Abstract
This paper investigates the potential economic effect of ‘Indo-Pacific’ regional economic cooperation and compares with the extended CPTPP. The Computable General Equilibrium (CGE) results show that the quadrilateral alliance between the United States, Japan, Australia, and India shows although a substantial economic gain whilst South and East Asia join with the Indo-Pacific cooperation, the economic benefit would be enormous. The findings also indicate that South and East Asian improved trade facilitation could bring huge gain as a large part of Indo-Pacific trade has remained unrealized. The trade transaction cost is one of the major trading barriers prohibiting the growth of Indo-Pacific intra-regional trade. The study reinforces that improvement in infrastructure and connectivity that leads to less trade transportation costs should be a necessary step to realise Indo-Pacific trade potential.
Highlights
The regional dynamics in the Asia–Pacific region are changing rapidly
The USA has withdrawn from the Trans-Pacific Partnership (TPP) Agreement and TPP11, which is called Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) and has been signed on 8 March 2018 in Chile
The results indicate that trade-related transaction cost is one of the major trading barriers prohibiting the growth of Indo-Pacific intra-regional trade
Summary
The regional dynamics in the Asia–Pacific region are changing rapidly. China’s “Belt and Road Initiative” has gained enormous attention. The trilateral free trade agreement (FTA) between China, Japan, and South Korea, the USA and the EU free trade agreement (FTA) (Transatlantic Trade and Investment Partnership—TTIP), and other regional trade agreements have been emerging due to the deadlock of the WTO’s Doha Round. Against this backdrop, a new regional bloc called ‘Indo-Pacific’ has gained high prominence. A new regional bloc called ‘Indo-Pacific’ has gained high prominence This regional cooperation was aimed to foster a quadrilateral alliance ( known as Quad) between
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