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When Regional Comprehensive Economic Partnership Agreement(RCEP) Meets Comprehensive and Progressive Trans-Pacific Partnership Agreement(CPTPP): Considering the “Spaghetti Bowl” Effect

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  • Chunding Li
  • Donglin Li

Abstract

This paper constructs a large-scale computable general equilibrium model with 26 countries and regions. The model is embedded in the global value chain, trade costs are introduced, and the trade effects of the Regional Comprehensive Economic Partnership Agreement (RCEP) and the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) under three different scenarios are simulated and analyzed. The simulation results show that in the context of superimposed consideration of the global value chain and the “spaghetti bowl” effect, the trade promotion effect of RCEP and CPTPP on member states has declined. The trade effect of some members may still be impaired, but at the same time, the trade agreement’s “exclusive effect” will also decline. Becoming a joint member of RCEP and CPTPP will result in greater benefits than joining only one trade agreement or not joining a trade agreement. Therefore, it is valuable to speed up the construction of a trade agreement network. When the spaghetti bowl effect is not taken into consideration, the trade promotion effects of RCEP and CPTPP are more prominent than when the spaghetti bowl effect is considered. For nonmembers, regardless of the situation, joining a trade agreement can result in greater benefits.

Suggested Citation

  • Chunding Li & Donglin Li, 2022. "When Regional Comprehensive Economic Partnership Agreement(RCEP) Meets Comprehensive and Progressive Trans-Pacific Partnership Agreement(CPTPP): Considering the “Spaghetti Bowl” Effect," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(7), pages 1988-2003, May.
    • Handle: RePEc:mes:emfitr:v:58:y:2022:i:7:p:1988-2003
    DOI: 10.1080/1540496X.2021.1949284
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    Cited by:

    1. Wang, Mengjiao & Liu, Jianxu & Yang, Bing, 2024. "Does the strength of the US dollar affect the interdependence among currency exchange rates of RCEP and CPTPP countries?," Finance Research Letters, Elsevier, vol. 62(PA).

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