Record Detail

The Trans Pacifc Partnership was set to be the world’s largest and most comprehensive
FTA linking 12 countries on both sides of the Pacifc. In a major turnaround, late January
2017, USA-one of the major trading partners to the region announced its decision to
withdraw from it. Four of the ASEAN members under the TPP, namely Brunei, Malaysia,
Singapore and Vietnam, have a number of existing FTAs with some major TPP members
and hold a signifcant trade share with them. However, these countries do not have
any agreements with Canada and Mexico and except Singapore, have no other trade
negotiation with the USA, though the USA absorbs a signifcant share of the exports of
the TPP-ASEAN nations, particularly of Vietnam. Given this background, withdrawal of
the USA seems to be a major setback for the TPP-ASEAN countries as these economies
are expected to be the largest benefciaries of the agreement. This study investigates
how far the non-participation of the USA would afect the overall growth and welfare
of each of the TPP-ASEAN countries. For this purpose, the study separately evaluates
the impact of the TPP on each of the TPP-ASEAN countries. As an analytical framework,
the paper uses a global CGE model and attempts a number of simulations by calibrating
various trade integration scenarios, such as tarif reduction and input-augmenting
technological change. Results of the study show that all of the TPP-ASEAN members
enjoy a welfare gain and positive growth in total output and trade when the USA is a
member. Vietnam and Malaysia, in particular are the largest benefciaries. When the
USA is omitted, these countries continue to have positive growth rates but the rates fall
considerably