Mega-Regional Trade Agreements: Costly Distractions for Developing Countries?

Sangeeta Khorana and Badri G. Narayan
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Badri G. Narayan: School of Environmental and Forestry Sciences, University of Washington-Seattle, USA

No BAFES09, BAFES Working Papers from Department of Accounting, Finance & Economic, Bournemouth University

Abstract: This paper examines how new trade rules under mega-regional agreements (in the Asia Pacific and the Atlantic) aim to liberalise ‘substantially all trade and investment’ but commitments undertaken by member countries could potentially impact on the health of the public in these countries. The mechanism of impact that the paper examines is through tariff elimination and the requirements of stronger intellectual property commitments for partner countries. We analyse two interlinked policy concerns: first, how tariff reduction/elimination under mega regional agreements impact on prices of tobacco and tobacco products as well as sugar and sugary beverages. Second, how mega regional agreements with Trade-Related Aspects of Intellectual Property Rights (TRIPS) like and TRIPS-plus commitments could modify intellectual property rules among partner countries and impact on developing countries’ access to life saving drugs and access to medicines. Using dynamic-GTAP model we find that there are significant health consequences of commitments undertaken by developing countries. Simulation results reveal: first, production of sugar increases under trade agreements with potential detrimental health effects. Second, stricter intellectual property rules under mega trade agreements lead to net global gains but developing countries suffer in terms of adverse health impact and from regulatory chill effect.

Keywords: Economic Integration; Trade Policy; Government policy (search for similar items in EconPapers)
JEL-codes: F13 F15 I18 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2017-03
New Economics Papers: this item is included in nep-cmp, nep-int, nep-ipr and nep-sea
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Journal Article: Mega-regional trade Agreements: Costly distractions for developing countries? (2017)
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