The paper
This article uses structural gravity to compare the trade, welfare, and value-chain implications of alternative mega-regional integration scenarios in Asia. The simulations cover goods and services and distinguish intermediate from final products.
Research findings
- The scenarios generate substantial potential export gains but much smaller increases in real GDP, with broader agreements generally producing larger gains.
- The RCEP and FTAAP scenarios increase the share of intermediates in trade, while the CPTPP scenarios have much smaller value-chain effects.
Policy takeaways
- Evaluate agreements using welfare and adjustment effects alongside headline export gains.
- Consider the reach of an agreement’s membership and its effects on intermediate inputs when assessing opportunities for regional value chains.