The TPP, China and the FTAAP: The Case for Convergence

Tang, Guoqiang and Peter A. Petri, eds. New Directions in Asia-Pacific Economic Integration. Honolulu: East-West Center. 2014.

9 Pages Posted: 21 May 2014 Last revised: 17 Nov 2014

Peter A. Petri

Brandeis University - Brandeis International Business School; Brandeis University - Department of Economics; East-West Center

Michael G. Plummer

Johns Hopkins University

Fan Zhai

China Investment Corporation

Date Written: May 19, 2014

Abstract

While the Trans-Pacific Partnership (TPP) and Regional Comprehensive Economic Partnership (RCEP) negotiations are progressing slowly, China’s interest in regional trade agreements has intensified. This paper brings together our computable general equilibrium model estimates of the benefits of various regional initiatives and adds a new set of estimates for the enlargement of the TPP to include China. This scenario would benefit all TPP members, and especially China and the United States, producing gains nearly as large as a region-wide Free Trade Area of the Asia Pacific. Several pathways to a consolidated regional agreement are examined, including the enlargement of the TPP or RCEP, and the negotiation of a new umbrella agreement that provides general and progressively higher region-wide standards. Still, a region-wide agreement poses very difficult challenges in terms of negotiations, politics and adjustment; China and the United States, as the countries expected to benefit the most, will have to cooperate intensively to make it a reality.

Keywords: Trans-Pacific Partnership, China, FTAAP, trade policy, free trade areas, regional economic integration

JEL Classification: F12, F13, F14, F15, F17

Suggested Citation

Petri, Peter A. and Plummer, Michael G. and Zhai, Fan, The TPP, China and the FTAAP: The Case for Convergence (May 19, 2014). Tang, Guoqiang and Peter A. Petri, eds. New Directions in Asia-Pacific Economic Integration. Honolulu: East-West Center. 2014.. Available at SSRN: https://ssrn.com/abstract=2438725 or http://dx.doi.org/10.2139/ssrn.2438725

Peter A. Petri (Contact Author)

Brandeis University - Brandeis International Business School ( email )

Mailstop 32
Waltham, MA 02454-9110
United States

HOME PAGE: http://ppetri.com/

Brandeis University - Department of Economics

Waltham, MA 02454-9110
United States

HOME PAGE: http://ppetri.com/

East-West Center

1601 East-West Road
Honolulu, HI 96848
United States

HOME PAGE: http://ppetri.com/

Michael G. Plummer

Johns Hopkins University ( email )

Via Belmeloro 11
40126 Bologna
Italy

Fan Zhai

China Investment Corporation ( email )

New Poly Plaza, No.1 Chaoyangmen
Beidajie, Dongcheng
Beijing, 100010
China

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