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Who Gains the Most in Preferential Trade Agreements?

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Abstract

Using recent extensive data of bilateral trade in manufacturing, we study the relations between trade flows, each country’s technological levels, and geographic barriers. Then, we calibrate the equilibrium of a general equilibrium model to explore how a Trans-Pacific Partnership affects each country’s welfare and trade flows. We decompose the total change of trade flows from member countries into income effects and substitution effects, and investigate the factors that affect trade flows. We demonstrate that a positive coalition externality could exist in that some nonmember countries could gain more than member countries and further investigate under which circumstances it arises.

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  • Juyoung Cheong & Shino Takayama, 2013. "Who Gains the Most in Preferential Trade Agreements?," Discussion Papers Series 475, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:475
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    Cited by:

    1. Juyoung Cheong & Shino Takayama & Terence Yeo, 2013. "Preferential Trade Agreements and Welfare: General Equilibrium Analysis," Discussion Papers Series 482, School of Economics, University of Queensland, Australia.

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