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Impacts of the Free Trade Area of the Pacific (FTAAP) on Production, Consumption, and Trade of the Philippines

Author

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  • U-Primo E. Rodriguez

    (PIDS)

Abstract

This paper examines the economy-wide impacts of a Free Trade Area of the Asia Pacific (FTAAP) on the Philippine economy. In particular, it uses an applied general equilibrium model to determine the effects of alternative scenarios on aggregate and sectoral outputs, consumption, and international trade. The paper also compares the FTAAP to reforms which are confined to the ASEAN plus 3 and to a broader set of tariff changes that covers all the trading partners of the Philippines. The findings of the paper are as follows. First, the FTAAP is likely to benefit the Philippines in the form of higher aggregate output and employment. However, such gains are not projected for all industries as the simulation results indicate declines in the outputs of activities related to rice and corn. Second, the benefits from the FTAAP are likely to come more from the removal of tariffs on nonagriculture products. Finally, the aggregate gains from the FTAAP are larger than an arrangement which is limited to ASEAN plus 3 countries. However, the differences in the impacts do not appear to be very large.

Suggested Citation

  • U-Primo E. Rodriguez, 2008. "Impacts of the Free Trade Area of the Pacific (FTAAP) on Production, Consumption, and Trade of the Philippines," Development Economics Working Papers 22694, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:develo:22694
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    References listed on IDEAS

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    1. Cororaton, Caesar B. & Cockburn, John & Corong, Erwin, 2005. "Doha scenarios, trade reforms, and poverty in the Philippines: a CGE analysis," MTID discussion papers 86, International Food Policy Research Institute (IFPRI).
    2. Cororaton, Caesar B. & Cockburn, John & Corong, Erwin, 2005. "Doha scenarios, trade reforms, and poverty in the Philippines: a CGE analysis," MTID discussion papers 86, International Food Policy Research Institute (IFPRI).
    3. Lewis, Jeffrey D. & Robinson, Sherman & Wang, Zhi, 1995. "Beyond the Uruguay Round: The implications of an Asian free trade area," China Economic Review, Elsevier, vol. 6(1), pages 35-90.
    4. Cororaton, Caesar B., 2003. "Analysis of Trade Reforms, Income Inequality and Poverty Using Microsimulation Approach: The Case of the Philippines," Discussion Papers DP 2003-09, Philippine Institute for Development Studies.
    5. Cabanilla, Liborio S. & Rodriguez, U-Primo E., 2006. "The Impact of a Philippine-US FTA: The Case of Philippine Agriculture," Discussion Papers DP 2006-06, Philippine Institute for Development Studies.
    6. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, November.
    7. Warwick. J. McKibbin, "undated". "Quantifying APEC Trade Liberalization: A Dynamic Analysis," Discussion Papers 122, Brookings Institution International Economics.
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    9. Cabalu, Helen & Rodriguez, U-Primo, 2007. "Trade-offs in Trade Liberalization: Evidence from the Philippine 2005 Tariff Changes," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 22, pages 637-663.
    10. U-Primo E. Rodriguez & Liborio S. Cabanilla, 2006. "The Impact of a Philippine-US FTA : The Case of Philippine Agriculture," Development Economics Working Papers 22693, East Asian Bureau of Economic Research.
    11. Ramon C. Clarete, 1989. "The Economic Effects of Trade Liberalization on Philippine Agriculture," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 26(2), pages 208-235, December.
    12. repec:phd:dpaper:pn_2005-05 is not listed on IDEAS
    13. Cororaton, Caesar B., 2004. "Philippine-Japan Bilateral Agreements: Analysis of Possible Effects on Unemployment, Distribution and Poverty in the Philippines Using CGE-Microsimulation Approach," Discussion Papers DP 2004-01, Philippine Institute for Development Studies.
    14. Caesar B. Cororaton, 2006. "The Impact of Trade Reform in the 1990s on Welfare and Poverty in the Philippines," Working Papers MPIA 2006-11, PEP-MPIA.
    15. Cororaton, Caesar B., 1994. "Structural Adjustment Policy Experiments: The Use of Philippine CGE Models," Discussion Papers DP 1994-03, Philippine Institute for Development Studies.
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    Cited by:

    1. Briones, Roehlano M. & David, Cristina C. & Inocencio, Arlene B. & Intal, Ponciano Jr. S. & Geron, Maria Piedad S. & Ballesteros, Marife M., 2012. "Monitoring and Evaluation of Agricultural Policy Indicators," Discussion Papers DP 2012-26, Philippine Institute for Development Studies.

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    More about this item

    Keywords

    applied general equilibrium models; Asia Pacific Economic Cooperation; free trade area; international trade; Philippines;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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