Quantitative impacts of alternative East Asia Free Trade Areas: A Computable General Equilibrium (CGE) assessment

Kitwiwattanachai, Anyarath; Nelson, Doug; Reed, Geoffrey

doi:10.1016/j.jpolmod.2009.07.002

Cited by 33 publications

(18 citation statements)

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“…Studies that assume fixed government revenues usually account for any decline in collected tariffs by presuming compensating taxation changes such as a lump‐sum consumption tax (Devarajan and Rodrik, ; Hosoe, ; Konan and Maskus, ; Taylor and Von Arnim, ; Thurlow and van Seventer, ). Other studies assume balanced budgets in which any tariff or tax revenue in excess of the fixed expenditure are transferred to households (Ballard and Cheong, ; Diao et al ., ; Kitwiwattanachai et al ., ).…”

Section: Theoretical Literaturementioning

confidence: 97%

Trade Liberalization and Fiscal Stability in Developing Countries: What Does the Evidence Tell Us?

2020

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This paper evaluates the evidence as regards the extent to which trade liberalization has led to a decline in tariff revenue, total tax revenue, government expenditure, and government debt. Conventional theory generally predicts that when tariff losses do occur, they may be recouped through better forms of taxationthough a more sophisticated body of theory suggests otherwise. The empirical evidence is also mixed. Theory driven ex-ante models of trade liberalization assume that trade agreements are revenue neutral. Ex-post studies suggest that theory may hold in advanced and upper middle-income economies. However, the consequences for lower income countries are a matter for concern. The majority of the evidence finds that low income countries lose trade tax revenue and are unable to recoup much of that lost revenue. At a time when fresh bilateral trade and investment treaties are being negotiated and WTO reform is on the global policy agenda, this paper highlights the need to design a treaty regime that enhances the ability of poorer nations to mobilize domestic resources without jeopardizing fiscal and financial stability.

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Section: Theoretical Literaturementioning

confidence: 97%

Trade Liberalization and Fiscal Stability in Developing Countries: What Does the Evidence Tell Us?

2020

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“…The key conclusion from this research is that the AFTA common effective preferential tariff (CEPT) utilization rates (based on the shares of export values enjoying preferences) are extremely low, and that AFTA is not particularly effective (see McKinsey and Company 2003;Baldwin 2006;and Avila and Manzano 2007). 4 1 For a recent selection of CGE studies, see Francois and Wignaraja (2008); Kawai and Wignaraja (2009); Kitwiwattanachai et al (2010);Petri, Plummer, and Zhai (2011);and Estrada et al (2012).…”

Section: The Regional Trade Agreement Debate In Relation To Southeastmentioning

confidence: 99%

Regional Trade Agreements and Enterprises in Southeast Asia

Wignaraja

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Ganeshan Wignaraja is director of research, Asian Development Bank Institute.The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, the ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, JapanTel:+81-3-3593-5500 Fax:+81-3-3593-5571 URL:www.adbi.org E-mail: info@adbi.org AbstractThe spread of regional trade agreements (RTAs) in Southeast Asia has ignited a debate about their impact on business, and ways to avoid raising the business costs from the Asian 'noodle bowl' effect. This paper undertakes a comparative and firm-level analysis of the impact of RTAs in Indonesia, Malaysia, and the Philippines including: a descriptive analysis of patterns of RTA use at the firm level and econometric analysis of factors affecting firmlevel RTA use. The paper finds that firm-heterogeneity matters in RTA use. Acquiring knowledge about RTAs through in-house efforts and actively forging links with RTA support institutions, building technological capabilities, and membership of industrial clusters show up as significant factors affecting the likelihood of firm-level RTA use. A lack of information about RTAs and the absence of RTAs with major trading partners are the main reasons for non-use of RTAs. Key policy implications include the need to improve business support for RTAs, to conclude RTAs with major trading partners, and to create a database on preference use in RTAs.

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“…Comparing the impacts between the ASEAN-China FTA and the ASEAN+3 FTA, estimates by Cheong (2003), Ando and Urata (2006) and Kawai and Wignaraja (2008) database, studies undertaken by Cheong (2003) and Kawasaki (2003) on China's bilateral FTAs find that China is expected to gain more in terms of output or welfare changes from a bilateral FTA with Japan than with ASEAN or Korea. Using version 6 of the GTAP database, Kitwiwattanachai et al (2010) examine various FTAs among ASEAN, China, Japan and Korea, not only in terms of trade, GDP and welfare effects, but also in terms of real wage and unemployment impacts. They find that China, Japan and Korea are better off with the ASEAN+3 FTA than under individual bilateral agreements with ASEAN.…”

Section: Brief Overview Of Computable General Equilibrium Model and Amentioning

confidence: 99%

China's Free Trade Agreements with ASEAN, Japan and Korea: A Comparative Analysis

Estrada¹,

Park²,

Park³

et al. 2012

China and World Economy

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The role of China in East Asia's recovery from the recent global financial and economic crisis highlights China's position as an engine of growth for this region. From the viewpoint of China, there are many potential gains from entering into free trade agreements (FTAs) with its neighbors, who collectively form a large and fast-growing market. In this paper, we qualitatively and quantitatively assess the four main permutations of China's FTAs with East Asian major economiesWe compare the effects of these FTAs on China's output and welfare. Our comparative analysis shows that China will gain from all three bilateral FTAs, while gaining the most from the ASEAN+3. Because forming a region-wide FTA, such as the ASEAN+3, is expected to be gradual and difficult, China should continue to engage in bilateral FTAs as a mediumterm and alternative strategy. However, in the long term, China should pursue a regionwide FTA.

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Quantitative impacts of alternative East Asia Free Trade Areas: A Computable General Equilibrium (CGE) assessment

Cited by 33 publications

References 10 publications

Trade Liberalization and Fiscal Stability in Developing Countries: What Does the Evidence Tell Us?

Trade Liberalization and Fiscal Stability in Developing Countries: What Does the Evidence Tell Us?

Regional Trade Agreements and Enterprises in Southeast Asia

China's Free Trade Agreements with ASEAN, Japan and Korea: A Comparative Analysis

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