the relative significance of epas in asia-pacific · 2015. 11. 24. · india’s contribution in...

29 October 2011

The Relative Significance of EPAs

in Asia-Pacific

10 November 2015

Kenichi Kawasaki

GRIPS/JIIA/RIETI

• TPP and RCEP are shown to complement each other rather than be competitors toward the establishment of FTAAP.

• Trade diversion effects will deteriorate the economic welfare of the non-member economies of regional EPAs.

• Larger economic benefits are expected from NTMs reductions in addition to tariff removals.

• ASEAN countries and others will primarily benefit from their own EPA policy measures.

• East Asian economies would remain benefit largely from future trade liberalization.

1

OverviewThe relative significance of EPAs in Asia-Pacific

Estimated impacts of EPAsEstimated economic impacts of trade liberalization are compared with business as usual without liberalization at some time in the future.Those will be achieved over medium-term, after around 10 years.

Economic impacts of trade liberalization

2

Trade liberalization Future

Withoit trade liberalization

With trade liberalization

GDP

Impacts (%)

_______________Source: Author

Regional integration in Asia-Pacific Negotiations on the Regional Comprehensive Economic Partnership (RCEP) began in 2013.The members of the Trans-Pacific Partnership (TPP) have increased.

Framework of EPAs in Asia-Pacific

3

_______________Source: Author’s compilation

Hong Kong, China

Chinese Taipei China

Russia Korea

US Japan India

Canada Australia

Mexico New Zealand

Chile

Peru Burunei

Malaysia

Singapore

Viet Nam

Papua New Guinea Indonesia Cambodia

Philippines Laos

Thailand Myanmar

APEC

RCEP

TPP

ASEAN

Impacts of Asia-Pacific EPAs: JapanHigher levels of achievement in TPP including NTMs reductions.Larger gains from RCEP by growing and large Asian markets.Complementary benefits from FTAAP participating in TPP and RCEP.

Japan’s income gains from the Asia-Pacific EPAs

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

TPP12 RCEP FTAAP

% of GDP

Tariff removals

Tariff removals and NTMs reductions

4

________________Sources: Kawasaki (2015), “The Relative Significance of EPAs in Asia-Pacific”, Journal of Asian Economics 39

Japan’s source of economic benefitsJapan’s own contribution will be relatively large in TPP.China’s contribution will be major in RCEP.Japan’s gains from FTAAP will largely be given by Japan an China.

Contributions to Japan’s income gains by economies

0

20

40

60

80

100

TPP

Tariff +NTMs

RCEP

Tariff +NTMs

FTAAP

Tariff +NTMs

%

Malaysia US Russia China Japan

5


Impacts of Asia-Pacific EPAs: USIncome gains from TPP mainly from NTMs reductions.Income losses from RCEP due to trade diversion effectsMuch larger economic benefits from FTAAP than from TPP.

US’ income gains from the Asia-Pacific EPAs

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

TPP12 RCEP FTAAP

% of GDP

Tariff removals


6


US’ source of economic benefitsJapan’s contribution to tariff removals will be large in TPP.Meanwhile, the US’s own NTMs reductions will be significant.Income gains from FTAAP will firstly be influenced by China.

Contributions to US’ income gains by economies

-20

0

20

40

60

80

100

TPP

Tariff +NTMs

RCEP

Tariff +NTMs

FTAAP

Tariff +NTMs

%

Japan Mexico Russia US China

7


Impacts of Asia-Pacific EPAs: ChinaIncome losses from TPP due to trade diversion effects.Large gains from RCEP, in which tariff removals remain important.Further income gains from FTAAP expanding the members of EPAs.

China’s income gains from the Asia-Pacific EPAs

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

TPP12 RCEP FTAAP

% of GDP

Tariff removals


8


China’s source of economic benefitsIncome gains from FTAAP will primarily be driven by own measures.India’s contribution in RCEP and Russia’s contribution in FTAAP will be noted.

Contributions to China’s income gains by economies

0

20

40

60

80

100

TPP

Tariff +NTMs

RCEP

Tariff +NTMs

FTAAP

Tariff +NTMs

%

Japan India US Russia China

9


Impacts of Asia-Pacific EPAs: Chinese TaipeiIncome losses from TPP due to trade diversion effects.Much larger income losses from RCEP.Significant economic benefits from FTAAP.

Chinese Taipei’s income gains from the Asia-Pacific EPAs

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

TPP12 RCEP FTAAP

% of GDP

Tariff removals


10


Impacts of Asia-Pacific EPAs: EUMay benefit from the spill-over effects of NTMs reductions.However, income losses from FTAAP will be sizable compared with expected gains from TTIP and EU-Japan EPA.

EU’s income losses from the Asia-Pacific EPAs

-0.8

-0.6

-0.4

-0.2

0.0

0.2

TPP12 RCEP FTAAP

% of GDP

Tariff removals


11


Significance of domestic reforms in FTAAPIn ASEAN countries and others, contributions through their own initiatives will be much larger than those by partners in FTAAP.

Contributions to income gains from FTAAP by own policies

0

20

40

60

80

100

%

Tariff removals

Tariff removals and NTMs

reductions

12


Tariff concessions in East AsiaTariff concessions in East Asian EPAs have not substantially been high enough in effect.

Comparison of tariff concessions

0

20

40

60

80

100

%Numbers of commodoties Average tariff rates

13

________________Sources: Authors’ estimates

the relative significance of epas in asia-pacific · 2015. 11. 24. · india’s contribution in...

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