International trade effects of a potentially revived Trans-Pacific partnership for North America

Baybars KARACAOVALI, Deveraux TALAGI

Abstract


Abstract. This paper analyzes the international trade relations of the United States, Canada, and Mexico with the now defunct Trans-Pacific Partnership (TPP12) member countries currently and historically in order to provide insights for potential future effects provided United States decides to join the new Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP or TPP11) with the remaining original TPP countries. Using a gravity model estimation, we find that the existing free trade agreements (FTAs) between TPP12 countries (intra-TPP) and FTAs between TPP12 members and other countries (extra-TPP) have positively impacted trade in the 1980-2015 period. A revived TPP12 agreement promises to boost trade further.

Keywords. International trade, Gravity model, Free trade agreements, Trans-Pacific partnership.

JEL. F10.


Keywords


International trade; Gravity model; Free trade agreements; Trans-Pacific partnership.

Full Text:


References


Anderson, J.A. (1979). A theoretical foundation for the gravity equation, American Economic Review, 69(1), 106-116.

Anderson, J.A. & van Wincoop, E. (2003). Gravity with gravitas: A solution to the Border Puzzle, American Economic Review, 93(1), 170-192. doi. 10.1257/000282803321455214

Anderson, J.A. & van Wincoop, E. (2004). Trade costs, Journal of Economic Literature, 42(3), 691-751. doi. 10.1257/0022051042177649

Baier, S., & Bergstrand, J.H. (2001). The growth of World trade: Tariffs, transport costs, and income similarity, Journal of International Economics, 53(1), 1-27. doi. 10.1016/S0022-1996(00)00060-X

Capaldo, J., & Izurieta, A. (2016). Trading down: Unemployment, inequality and other risks of the Trans-Pacific partnership agreement, Global Development and Environment Institute, Medford, MA: Tufts University,Working Paper, No.16-01. [Retrieved from].

Chaney, T. (2008). Distorted gravity: Heterogeneous firms, market structure and the geography of international trade, American Economic Review, 98(4), 1707-1721. doi. 10.1257/aer.98.4.1707

Davidson, R., & MacKinnon, J.G. (1993). Estimation and Inference in Econometrics, New York: Oxford University Press.

Eaton, J., & Kortum, S. (2002). Technology, geography, and trade, Econometrica, 70(5), 1741-1779. doi. 10.1111/1468-0262.00352

Head, K., Mayer, T., & Ries, J. (2010). The erosion of colonial trade linkages after independence, Journal of International Economics, 81(1), 1-14. doi. 10.1016/j.jinteco.2010.01.002

Karacaovali, B. (2016). Trade-diverting free trade agreements, external tariffs, and feasibility, Journal of International Trade and Economic Development, 25(1), 1-22. doi. 10.1080/09638199.2014.924657

Karacaovali, B., & Limao, N. (2008). The clash of liberalizations: Preferential vs. multilateral trade liberalization in the European Union, Journal of International Economics, 74(2), 299-327. doi. 10.1016/j.jinteco.2007.07.003

LaPorta, R., Lopez-de-Silanes, F., & Shleifer, A. (2008). The economic consequences of legal origins, Journal of Economic Literature, 46(2), 285-332. doi. 10.1257/jel.46.2.285

Li, C., & Whalley, J. (2014). China and the Trans-Pacific partnership: A numerical simulation assessment of the effects involved, World Economy, 37(2), 169-192. doi. 10.1111/twec.12123

Mayer, T., & Zignago, S. (2011). Notes on CEPII’s distances measures: The GeoDist database, CEPII, Working Paper, No.2011-25. [Retrieved from].

Petri, P., & Plummer, M. (2016). The economic effects of the Trans-Pacific partnership: New estimates, Washington, DC: Peterson Institute for International Economics, Working Paper Series, No.16-2. [Retrieved from].

Trefler, D. (2004). The long and short of the Canada-U.S. free trade agreement, American Economic Review, 94(4), 870-895. doi. 10.1257/0002828042002633

Tybout, J.R., & Westbrook, M.D. (1995). Trade liberalization and dimensions of efficiency change in Mexican manufacturing industries, Journal of International Economics, 39(1/2), 53-78. doi. 10.1016/0022-1996(94)01363-W

United States International Trade Commission (USITC), (2016). Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors.” Publication No.4607, Washington, DC: United States International Trade Commission. [Retrieved from].

World Bank, (2016). Potential Macroeconomic Implications of the Trans-Pacific Partnership,” Global Economic Prospects, January 2016, chapter 4: 219-255, Washington, DC. [Retrieved from].




DOI: http://dx.doi.org/10.1453/jepe.v5i3.1729

Refbacks

  • There are currently no refbacks.


Bookmark and Share


.......................................................................................................................................................................................................................................................................................................................................

Journal of Economics and Political Economy - J. Econ. Pol. Econ. - JEPE - www.kspjournals.org

ISSN: 2148-8347

Editor: [email protected]   Secretarial: [email protected]   Istanbul - Turkey.

Copyright © KSP Library