How close is Asia already to being a trade bloc?

Chunding Li () and John Whalley

Journal of Comparative Economics, 2017, vol. 45, issue 4, 847-864

Abstract: FTA bilateral and regional negotiations in Asia have developed quickly in the past decade moving Asia ever closer to an economic union. This paper uses a fifteen-country global general equilibrium model with trade costs to numerically calculate Debreu distance measures between the present situation and potential full Asia integration in the form of a trade bloc. Our results reveal that these large Asia economies can be close to full integration if they act timely in agreements through negotiation. All Asia countries will gain from Asia trade bloc arrangements except when the Asia FTA can only eliminate tariffs. These countries’ gain will increase as bilateral non-tariff elimination deepens. Larger countries will gain more than small countries. Asia FTA, Asia Union and RCEP will benefit member countries more than ASEAN+3. Global free trade will benefit all countries the most.

Keywords: Asia trade bloc; Debreu distance; Trade cost; Simulation (search for similar items in EconPapers)
JEL-codes: D58 D61 F15 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:45:y:2017:i:4:p:847-864

DOI: 10.1016/j.jce.2016.08.001

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