Emergent Trilateralism in the Pacific Basin: How Should China, Japan, and the United States Respond to Regional Trade Initiatives?

Hiro Lee, David Roland-Holst and Dominique van der Mensbrugghe

No 331060, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: China’s accession to WTO and accelerated global emergence will dramatically change trade patterns with the Pacific region and exert important influence on its trilateral relationship with Japan and the United States. Because of its size and stage of development, China will play two roles in the region with unusual prominence. First, it will stiffen regional export competition in a broad spectrum of products. Second, the size of China’s growing internal market will make it, by 2015, the largest trading nation in East Asia. Thus China interposes itself between the rest of East Asia and the U.S.-Japan market as an export competitor and magnet for imports. The objective of this paper is to evaluate this phenomenon empirically and elucidate the regional and domestic adjustments that might ensue. Our basic finding is that the United States, Japan, and China would gain substantially from a trilateral free trade agreement and, indeed, they could realize most of the residual gains from globalization thereby. We contrast this with the many suggestions for China’s involvement in less inclusive East Asian FTAs, and we find this would benefit smaller member economies (e.g., ASEAN countries), but not China itself.

Keywords: International Relations/Trade; International Relations/Trade (search for similar items in EconPapers)
Pages: 24
Date: 2002
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Working Paper: Emergent trilateralism in the Pacific Basin: How should China, Japan, and the United States respond to regional trade initiatives? (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:331060

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