Journal of Korea Trade

Korea Trade Research Association (한국무역학회)
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Is the RCEP a Cornerstone or Just Collaboration? Regional General Equilibrium Model Based on GAMS

  • Ahmed, Yosri Nasr (Institute of Agricultural Economics and Development, Chinese Academy of Agriculture Science, Faculty of Agriculture, Cairo University) ;
  • Delin, Huang (Institute of Agricultural Economics and Development, Chinese Academy of Agriculture Science) ;
  • Reeberg, Benito Giovanni (Institute of Agricultural Economics and Development, Chinese Academy of Agriculture Science) ;
  • Shaker, Victor (Faculty of Agriculture, Cairo University)
  • Received : 2019.06.25
  • Accepted : 2019.10.18
  • Published : 2020.02.28
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Abstract

Purpose - This paper investigates the potential effect of the Regional Comprehensive Economic Partnership (RCEP) on trade liberalization among member countries in order to answer key questions in our research on whether the RCEP will be a cornerstone or just collaboration. Furthermore, it aims to measure the likely magnitude of the economic impact it has on its members. Design/methodology - Toward achieving research objectives, we developed a regional CGE model based on the GTAP 9 database. Findings - The simulation results show Korea, Australia, India, and Japan ranked the top countries with an average growth in GDP of 0.38 %, 0.36%, 0.29%, and 0.23%, respectively. Moreover, China and New Zealand followed with a percentage of 0.12% each. The lower economic performing group is the ASEAN group due to a contraction in GDP by 0.13%. Accordingly, there was a positive impact of the RCEP agreement on all member states, as empirically demonstrated. Furthermore, Korea is one of the countries that will benefit most from joining this agreement. Finally, this agreement is important; it has many economic benefits to member states, but it is not a cornerstone. Originality/value - The examination of the quantitative effects of tariff removal among the RCEP's countries is its value. We will address all member countries of the convention simultaneously using a regional CGE model GAMS language, where we employed a Mathematical Programming System for General Equilibrium (MPSGE) to establish a Regional CGE model. This study is directed to policymakers looking at evaluating RCEP agreement.

Keywords

Acknowledgement

The research is financed by project of "Open Laboratory of national agricultural policy analysis and decision support system-The platform Construction of the agricultural strategic analysis and its expansion, opening and communication for "Belt and Road Initiative". Y2018PT31, 2018"; "Construction of Portal and Platform of Agricultural Economic Theory, Policy Analysis and remote Scientific Research Environment. 161005201902-1 2019".

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