Competition or complementarity? Assessing the interaction effects of RCEP and CPTPP on agricultural and non-agricultural trade flows

Qingtun Kong, Masaaki Yamada, Chengcheng Yang and Haisong Nie ()
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Qingtun Kong: Tokyo University of Agriculture and Technology
Masaaki Yamada: Tokyo University of Agriculture and Technology
Chengcheng Yang: Tongling University
Haisong Nie: Tokyo University of Agriculture and Technology

International Economics and Economic Policy, 2025, vol. 22, issue 1, No 7, 31 pages

Abstract: Abstract As a central hub for global commodity trade, the Asia-Pacific region has increasingly contributed to global economic growth. This study examines the impact of recently enacted mega Free Trade Agreements (FTAs) in the region, namely, the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Employing the Poisson pseudo-maximum likelihood (PPML) estimator and Poisson generalized estimating equations (GEE) within an Augmented Gravity Model with four-way fixed effects, this study analyzes trade data from 2003 to 2023 across 19 member countries and conducts endogeneity and robustness tests on the results. The empirical findings are unable to demonstrate that the main effects of RCEP and CPTPP have statistically significant impact on trade flows. However, the interaction effects of RCEP and CPTPP significantly boosted the bilateral trade flows (excluding non-agricultural exports) of overlapping member countries, particularly in agricultural exports, which increased by 21.81%. These results underscore the critical role of Asia-Pacific economic integration in facilitating trade cooperation and highlight the complexities that mega FTAs encounter in facing geopolitical issues. Despite political challenges, the RCEP and CPTPP positively affect trade relations and economic development.

Keywords: Economic integration; RCEP and CPTPP; Endogeneity; Poisson generalized estimating equations; Interaction effects (search for similar items in EconPapers)
JEL-codes: C23 F14 Q17 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s10368-024-00628-6

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