Economic Transformation and Sustainable Development through Multilateral Free Trade Agreements

Abstract

For sustainable economic development, a continuous and successful economic transformation is critical, and supporting economic transformation requires a better understanding of the close interaction between technology and skill at the micro- and macro-levels. The technology-skill links should especially be important in today’s globalized world. This paper develops a large-scale global Computable General Equilibrium (CGE) model by incorporating recent theoretical advances in international trade: Heterogeneous workers endogenously sort into different technologies based on their comparative advantage, and aggregate productivity is determined by skill-technology assignment in equilibrium. We then calibrate our model to a real-world data set, and investigate how multilateral free trade agreements affect individual member states, as well as outside countries and regions in the case of the Regional Comprehensive Economic Partnership (RCEP). Overall, the results show considerable real productivity gains and economic transformation effects, due to technology-upgrading mechanisms.

The role of trade liberalization in promoting regional integration and sustainability: The case of regional comprehensive economic partnership

“…Hence, the China-Japan-Korea Free Trade Area began planning in 2002 since the geopolitical conflict had been on hold for a long time (e.g., References [ 51 – 55 ]). Concurrently, the international situation has also undergone significant changes with the U.S. President Donald Trump taking office in 2016, unilateralism once again rose in the United States, so the United States withdrew from the TPP to protect its interests (e.g., References [ 56 ]). The RCEP and TPP agreement have substantial overlaps, but RCEP hadn’t stopped by CPTPP (e.g., References [ 60 , 61 ]).…”

Ventajas y desventajas de la firma de tratados de libre comercio

“…La teoría señala que el libre comercio evita la pérdida de eficiencia relacionada al proteccionismo, ya que este tipo de mercados fragmentan la producción internacional y atraen a demasiadas empresas a la industria protegida por la reducción de la competencia (Krugman, Obstfeld y Melitz 2012). La liberalización del comercio asigna recursos de empresas menos productivas a empresas más productivas; además, como los trabajadores están asociados con tecnologías más avanzadas, la productividad agregada de toda la economía aumenta (Jung 2021).…”

New Globalization and Multipolarity: A Critical Review and the Regional Comprehensive Economic Partnership Case

“…c. No regional agreement can be stable and sustainable unless it contributes to diminished geopolitical tensions, enhanced democracy, and strengthened human rights for all parties (Bartels, 2015;Jung, 2021).…”