A Trade and Welfare Analysis of Tariff Changes Within the TPP

Cheong, Juyoung and Takayama, Shino (2015) A Trade and Welfare Analysis of Tariff Changes Within the TPP. The B.E. Journal of Economic Analysis & Policy, 16 1: 477-511. doi:10.1515/bejeap-2014-0119

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Author Cheong, Juyoung
Takayama, Shino
Title A Trade and Welfare Analysis of Tariff Changes Within the TPP
Journal name The B.E. Journal of Economic Analysis & Policy   Check publisher's open access policy
ISSN 1935-1682
Publication date 2015-10-29
Year available 2015
Sub-type Article (original research)
DOI 10.1515/bejeap-2014-0119
Open Access Status Not yet assessed
Volume 16
Issue 1
Start page 477
End page 511
Total pages 35
Place of publication Berlin, Germany
Publisher Walter de Gruyter GmbH
Collection year 2016
Language eng
Abstract This paper examines the effects of the Trans-Pacific Partnership (TPP) tariff reductions on trade flows and welfare of the TPP members and nonmembers following the Caliendo and Parro (2015) method. We use comprehensive sectoral data on 39 countries and the rest of the world, including those in the Association of Southeast Asian Nations (ASEAN) and the Organization for Economic Co-operation and Development (OECD). Our results show that many TPP nonmembers along with the TPP members gain from the TPP tariff reductions, suggesting the existence of a positive externality, with the welfare gains mainly arising from the changes in the terms of trade. Our analysis also shows that the TPP members increase their imports from other TPP members and decrease from non-TPP members, but the trade creation effects exceed the trade diversion effects. Our calibration results under various assumptions of the model emphasize the role of multiple sectors and sectoral linkages in the welfare analysis of the TPP tariff reductions.
Keyword preferential trade agreeements
Trans-pacific partnership
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2016 Collection
School of Economics Publications
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Created: Mon, 02 Nov 2015, 09:31:53 EST by Alys Hohnen on behalf of School of Economics