Effects of tariff reduction by regional comprehensive economic partnership (RCEP) on global value chains based on simulation

Hui Wen, Yu You and Yue Zhang

Applied Economics Letters, 2022, vol. 29, issue 20, 1906-1920

Abstract: We estimate the effects of tariff reduction by regional comprehensive economic partnership (RCEP) on global value chains based on simulation. We find that tariff reduction by RCEP has an effect of strengthening signatories’ GVC positions and participation both in the short run and long run. The long-run effects are larger than the short-run effects. Australia, New Zealand, ASEAN countries and Japan have a potential to move towards the top of GVCs in sectors with comparative advantages in the long run. Overall, Korea’s GVC positions improve more than Japan and China, and both Korea and Japan benefit more in GVC participation than China in the long run. In contrast, USA and Europe’s GVC positions and participation tend to slightly drop.

Date: 2022
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DOI: 10.1080/13504851.2021.1966361

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