Review of Economic Impact of CPTPP

In the Asia-Pacific, free trade agreements (FTAs) and economic partnership agreements (EPAs) have been implemented intensively. However, a few major economies have been lagging behind that trend, and recent agreements have not always agreed on 100% tariff removals. This paper presents an overview of the development of EPAs in the Asia-Pacific and investigates quantitatively the relative significance of the impact of the expansion of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), using a Computable General Equilibrium (CGE) model based on the most recent trade database and tariff data. The results of model simulations suggest that the impact of China joining CPTPP would be larger than that of the United States (US) joining, in terms of macroeconomic benefits to the CPTPP economies on average. That said, the macroeconomic effects of the US and/or China joining CPTPP vary in terms of both magnitude and direction among the CPTPP economies. Meanwhile, the impact at the sector level would also vary among those scenarios. The impact estimated by model simulations would also be dependent on the structure of the CGE model used. The impacts of EPAs in alternative scenarios are worth simulating (using the same model version) and comparing.JEL classification Codes: C68, F13, F15, F17technical repor