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East Asia tariff concession: A CGE analysis

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  • Kawasaki, Kenichi
  • Narayanan, Badri
  • Guimbard, Houssein
  • Kuno, Arata

Abstract

While there are many studies focusing on the impacts of various trade policy agreements across the world in the recent years, there is not much focus in the literature on the extent to which these agreements are implemented later, in terms of the aspects agreed upon therein. In this paper, we identify the past achievements of the Economic Partnership Agreements (EPAs) in the East Asian regions in terms of tariff removals and suggest future rooms for further economic benefits from trade liberalization in the region. Secondly, we provide the tariff concession dataset in the GTAP database, which distinguishes the tariff removals agreed in these EPAs in East Asia but not implemented yet, from the existing overall tariffs in the benchmark year. The standard GTAP Data Base incorporates all tariff reductions that have been included in the agreements that are in force; however not all of them are implemented in reality. We have quantified the actual tariff removals in the East Asia EPAs at HS6 levels. These will be aggregated to GTAP sectoral level, to arrive at a GTAP-consistent tariff dataset that contains actually implemented tariffs in East Asia. This is suggested to be taken as the actual baseline for policy simulations in the future. Based on this dataset, we compare the economic impacts of partial versus complete implementation of the trade liberalization agreed in the East Asia EPAs. This is accomplished in two steps: firstly, we prepare simulations (using the Altertax tool, documented in Malcolm (1998), GTAP Technical Paper No: 12) to switch from the GTAP tariffs to the levels implied by our new tariff dataset; secondly, we evaluate the impacts of reducing the tariffs from the modified levels to those included in the standard GTAP Data Base. The second step gives the difference between completely implementing all tariff reductions included in the agreements and partial implementation that has been done in reality....

Suggested Citation

  • Kawasaki, Kenichi & Narayanan, Badri & Guimbard, Houssein & Kuno, Arata, 2015. "East Asia tariff concession: A CGE analysis," Conference papers 332629, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332629
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    References listed on IDEAS

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    1. Peter A. Petri & Michael G. Plummer & Fan Zhai, 2012. "The Trans-Pacific Partnership and Asia-Pacific Integration: A Quantitative Assessment," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 6642, April.
    2. Ken Itakura & Hiro Lee, 2012. "Welfare Changes And Sectoral Adjustments Of Asia-Pacific Countries Under Alternative Sequencings Of Free Trade Agreements," Global Journal of Economics (GJE), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 1-22.
    3. Petri, Peter A., 2012. "The Trans-Pacific Partnership and Asia-Pacific Integration," 2012: New Rules of Trade? December 2012, San Diego, California 143184, International Agricultural Trade Research Consortium.
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