Going It Alone in the Asia-Pacific: Regional Trade Agreements without the United States

17 Pages Posted: 5 Oct 2017

See all articles by Peter A. Petri

Peter A. Petri

Brandeis University - Brandeis International Business School; Brookings Institution; Brandeis University - Department of Economics

Michael G. Plummer

Johns Hopkins University

Shujiro Urata

Waseda University-Graduate School of Asia-Pacific Studies

Fan Zhai

China Investment Corporation

Date Written: October 4, 2017

Abstract

The withdrawal of the United States from the Trans-Pacific Partnership (TPP) in early 2017 led the remaining 11 countries in that trade and investment agreement to explore alternative ways to sustain economic integration in the Asia-Pacific region. This Working Paper shows that, without the United States, these 11 countries can achieve significant gains from high-quality, TPP-like agreements among themselves and from what might have to be a less rigorous but wider agreement in a separate, 16-member Asian trade negotiation, the Regional Comprehensive Economic Partnership (RCEP). Either of these multilateral options would yield benefits greater than those that would flow from bilateral agreements between individual countries and the United States alone, and gains from such accords could grow over time. For example, expanding the TPP without the United States to five other Asia-Pacific economies, all of which have expressed interest in the TPP in the past, would yield global income gains that rival those expected from the original TPP that included the United States, and the gains are even larger for some members. The United States, meanwhile, would suffer losses from such arrangements in two ways: first, because it would forego the benefits that would otherwise accrue from the relatively large TPP agreement, and second, because the new Asia-Pacific agreements would reduce US exports to the region as countries shift their trade to competitors of the United States. In the longer run, a new Asia-Pacific agreement or agreements would keep trade liberalization on the global agenda and likely attract further interest from large partners, including Europe. Eventually, the United States might observe that it is losing out and change its mind about joining these larger trade blocs.

Keywords: Trade, TPP, RCEP, Asia-Pacific

JEL Classification: F15, F14, F13, F17

Suggested Citation

Petri, Peter A. and Plummer, Michael G. and Urata, Shujiro and Zhai, Fan, Going It Alone in the Asia-Pacific: Regional Trade Agreements without the United States (October 4, 2017). Peterson Institute for International Economics Working Paper No. 17-10. Available at SSRN: https://ssrn.com/abstract=3047895 or http://dx.doi.org/10.2139/ssrn.3047895

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/

Brookings Institution ( email )

1775 Massachusetts Ave, NW
Washington, DC 20036
United States

Brandeis University - Department of Economics

Waltham, MA 02454-9110
United States

HOME PAGE: http://ppetri.com/

Michael G. Plummer

Johns Hopkins University ( email )

Via Belmeloro 11
40126 Bologna
Italy

Shujiro Urata

Waseda University-Graduate School of Asia-Pacific Studies ( email )

1-21-1 Nishiwaseda
Shinjuku-ku, Tokyo 169-8050
Japan

Fan Zhai

China Investment Corporation ( email )

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

Register to save articles to
your library

Register

Paper statistics

Downloads
164
Abstract Views
669
rank
185,560
PlumX Metrics