Potential impacts of TPP on feasibility and constructional path of China-Japan-South Korea FTA: study based on GTAP model

LIU Pengchun1 XIN Huan1 CHEN Cheng1

(1.School of Finance and Statistics, East China Normal University 200241)

【Abstract】Based on the simulation results of the GTAP model, this paper first examines what are the feasible paths to lead to the multilateral free trade (MFT) between China, Japan and South Korea, and then considers TPP's potential impacts on the feasible paths of China-Japan–South Korea FTA in a dynamic game model. The main conclusions are as follows: the establishment of TPP will exert negative influences on China's economy, and the negative influence will expand with the increase of TPP numbers. Although TPP will have some impacts on the feasible paths of China-Japan–South Korea FTA, it will only restrict the paths, not block them. Whether TPP is established smoothly or not, China, Japan and South Korea can always achieve multilateral free trade through hub-and-spoke free trade agreements.

【Keywords】 TPP; China–Japan–South Korea FTA; constructional path; GTAP model;

【DOI】

【Funds】 2015 Subject Program of Center for Japanese Studies and Exchange in Shanghai Planned Project for Innovation Activities of Shanghai University Students(201410269113)

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(Translated by KUANG Zhanxin)

    Footnote

    [1]. 1 Singapore, Malaysia, Vietnam and Brunei are included. Since the data of Brunei has not been listed in GTAP database separately, other three countries are only chosen into one group. Due to a smaller size of the economy in Brunei, the fundamental impact has not been caused by the analysis results. [^Back]

    [2]. 2 Australia, New Zealand, Canada, Mexico, Peru and Chile are included. [^Back]

    [3]. 3 After 2007, the FTAs of China, Japan and South Korea that have been signed with other countries or taken into effect were many, but the bilateral trade volume for the target countries and China, Japan and South Korea has been lower in the proportion of the total trade. The FTA that may produce the larger potential impacts from the trade of Japan and South Korea has been considered. [^Back]

    [4]. 4 This paper is deemed as the FTA, without distinguishing the specific content of negotiations. [^Back]

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This Article

ISSN:1002-4670

CN: 11-1692/F

Vol , No. 11, Pages 96-108

November 2015

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Article Outline

Abstract

  • Introduction
  • 1 Literature review
  • 2 Model framework, methods and data
  • 3 Analysis for the impacts of TPP’s negotiation outcomes on the feasible paths to China–Japan–South Korea FTA
  • 4 Conclusion and implications for China
  • Footnote

    References