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Estimating the Economic and Distributional Impacts of the Regional Comprehensive Economic Partnership

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  • Estrades Pineyrua,Carmen
  • Maliszewska,Maryla
  • Osorio-Rodarte,Israel
  • Seara E Pereira,Maria Filipa
Abstract
This paper applies a top-down, macro-micro modeling framework that links a computablegeneral equilibrium model with the survey-based global income distribution dynamics model to assess the economicand distributional effects of the implementation of theRegional Comprehensive Economic Partnership (RCEP). Reductions of tariffs and non-tariff measures,implementation of a rule of origin, together with productivity gains stemming from trade cost reductions canstrengthen regional trade and value chains among Regional Comprehensive Economic Partnership members. The results ofthe analysis indicate that in an already deeply integrated region, tariff liberalization alone brings little benefit,with estimated real income gains of 0.21 percent relative to the baseline (without the RCEP) in 2035. With liberal rulesof origin, the gains in real income could double to 0.49 percent. The biggest benefits accrue when the productivitygains are considered, increasing real income by as much as 2.5 percent for the trade bloc. In this scenario, tradeamong RCEP members increases by 12.3 percent in 2035 relative to the baseline. The RCEP also has the potential tolift 27 million additional people to middle-class status by 2035. It will also boost wages, with faster gains in sectorsthat employ larger shares of women. The aggregate effects mask large variety of outcomes across countries, withVietnam expected to register the highest trade and income gains. Implementation of the RCEP help partially mitigatethe negative economic impacts of COVID-19 in the East Asia and the Pacific region.

Suggested Citation

  • Estrades Pineyrua,Carmen & Maliszewska,Maryla & Osorio-Rodarte,Israel & Seara E Pereira,Maria Filipa, 2022. "Estimating the Economic and Distributional Impacts of the Regional Comprehensive Economic Partnership," Policy Research Working Paper Series 9939, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9939
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    References listed on IDEAS

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    3. Chul Chung & Innwon Park & Soonchan Park, 2022. "Estimating the Impact of Cumulative Rules of Origin on Trade Costs: An Application to Mega-regional Free Trade Agreements in the Asia-Pacific Region," Asian Economic Papers, MIT Press, vol. 21(1), pages 92-109, Winter/Sp.
    4. Tarr, David G., 2013. "Putting Services and Foreign Direct Investment with Endogenous Productivity Effects in Computable General Equilibrium Models," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 303-377, Elsevier.
    5. Petia Topalova & Amit Khandelwal, 2011. "Trade Liberalization and Firm Productivity: The Case of India," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 995-1009, August.
    6. Angel Aguiar & Maksym Chepeliev & Erwin L. Corong & Robert McDougall & Dominique van der Mensbrugghe, 2019. "The GTAP Data Base: Version 10," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 4(1), pages 1-27, June.
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    Cited by:

    1. Nazatul Faizah Haron & Suraya Mahmood & Mahirah Kamaludin & Aminu Hassan Jakada & Omar Mohammad Abad Alkasasbeha, 2023. "Creating an Economic Recovery After COVID-19: Does Regional Comprehensive Economic Partnership (RCEP) is a Booster on Asian Pacific Region?," Journal of Public Administration and Governance, Macrothink Institute, vol. 13(1), pages 1729-1729, December.
    2. World Bank, 2022. "Cambodia Economic Update - Weathering the Oil Price Shock," World Bank Publications - Reports 37680, The World Bank Group.

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