The Effects of a China-US Free Trade and Investment Agreement

Forthcoming in Bergsten, C. F., Hufbauer, G. C., and Miner, S. Bridging the Pacific: Toward Free Trade Between China and the United States, Peterson Institute for International Economics

55 Pages Posted: 24 Oct 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: October 1, 2014

Abstract

Neither of the major negotiations underway in the Asia-Pacific region, the Regional Comprehensive Economic Partnership and the Trans-Pacific Partnership, includes both China and the United States. By failing to connect these economies, these agreements would leave much of the economic and political gains from Asia-Pacific economic integration unexploited. A China-US free trade and investment agreement, although not likely to be concluded soon, would address this gap and offers a range of policy options for the two economies. This paper uses a state-of-the-art computable general equilibrium model to estimate the benefits and adjustment implications of such an effort and compares them to the effects of the current smaller regional initiatives.

Keywords: China-US trade, US trade policy, free trade areas, Asia-Pacific economic integration

JEL Classification: F12, F13, F14, F15, F17, F53

Suggested Citation

Petri, Peter A. and Plummer, Michael G. and Zhai, Fan, The Effects of a China-US Free Trade and Investment Agreement (October 1, 2014). Forthcoming in Bergsten, C. F., Hufbauer, G. C., and Miner, S. Bridging the Pacific: Toward Free Trade Between China and the United States, Peterson Institute for International Economics . Available at SSRN: https://ssrn.com/abstract=2513839

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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