Asia Economics Blog


Moderator:  Calla Wiemer (

Estimating the Effects of Mega-Regional Trade Agreements in a General Equilibrium Framework with Global Value Chains

Co-Author: Ken Itakura

In recent years we have witnessed increasing prominence of trade in intermediate goods and services. The fragmentation of global value chains (GVCs) has been motivated by sourcing intermediate inputs from more cost-efficient producers in order to enhance efficiency. In estimating welfare and sectoral effects of mega-regional trade agreements (MRTAs), such as the Trans-Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), it is necessary to construct a global dynamic computable general equilibrium (CGE) model that incorporates the GVC structure.

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