2016 Fiscal Year Annual Research Report
Do Global Value Chains Enlarge the Economic Effects of the TPP? A Multi-country CGE Analysis
| Project/Area Number |
16H03616
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| Research Institution | Osaka University |
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Principal Investigator |
利 博友 大阪大学, 国際公共政策研究科, 教授 (40283460)
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| Co-Investigator(Kenkyū-buntansha) |
大槻 恒裕 大阪大学, 国際公共政策研究科, 教授 (40397633)
板倉 健 名古屋市立大学, 大学院経済学研究科, 教授 (90405217)
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| Project Period (FY) |
2016-04-01 – 2019-03-31
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| Keywords | 経済政策 / TPP / CGE / global value chains |
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| Outline of Annual Research Achievements |
During FY2016, Lee, Itakura and Oyamada met with van der Mensbrugghe, overseas research collaborator of the project, during the 19th Annual Conference on Global Economic Analysis, which was held in June 2016 at the World Bank, Washing- ton, DC. We obtained valuable advice from van der Mensbrugghe concerning the construction of world input-output table. From July 2016 to March 2017, Lee, Itakura and Oyamada first constructed a matrix of intermediate inputs by origin and destination countries/regions, then a world input-output table consisting of 22 regions and 29 sectors.
Otsuki and Lee started collecting the firm-level data of Japan in order to analyze firms' production and export
decisions and their roles in global value chains. Due to some econometric issues, such as the possibility of omitted variable bias, we have not completed the econometric analysis.
Since we did not complete the construction of the world input-output table until March 2017, we first constructed a dynamic CGE model that aggregated imported intermediate inputs from all origin countries. Using this dynamic CGE model, we examined the economic effects of the TPP and how Japan's agricultural policy reforms and productivity changes would affect the results. First, we found that when Japan's agricultural policy reforms would significantly reduce the extent of output contraction of agricultural and processed food sectors in Japan. Second, when productivity increases through an increase in competition, the magnitudes of welfare gains for the member countries would increase considerably.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
We feel that we made satisfactory progress during FY2016 for the following reasons. First, concerning constructions of a matrix of intermediate inputs by origin and destination countries/regions and a world input-output table, we achieved what we had planned during the first year of this project. Second, we made a satisfactory progress on the econometric analysis of firms' production and export decisions and their roles in global value chains. Third, we con- structed a dynamic CGE model with aggregated imported intermediate inputs, conducted several policy experiments, and obtained preliminary results.
With the U.S. withdrawal from the TPP in January 2017, however, we needed to modify our policy scenarios. It became necessary to consider alternative sequencings of mega-regional trade agreements for the Asia-Pacific countries. A pre- liminary paper examining the effects of alternative trade integration scenarios in the Asia-Pacific was presented at the International Conference on Economic Integration and Economic Growth, which was held at the University of Washingtonin March 2017. In addition, Lee, Itakura, Otsuki and Oyamada presented their preliminary papers and findings at eight international conferences and two domestic conferences during FY2016.
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| Strategy for Future Research Activity |
From FY2017, following the U.S. withdrawal from the TPP, we will consider more realistic policy scenarios, including the realization of the Regional Comprehensive Economic Partnership (RCEP), which will eventually lead to a Free Trade Area of the Asia-Pacific (FTAAP) before 2030. In addition, we will consider a scenario in which the TPP signatories other than the United States will agree on a similar deal to that signed in February 2016.
We plan to construct a global CGE model that incorporates the world input-output table that we completed in March 2017. Using this new model, we will be able to analyze the effects of global value chains in mega-regional trade agree- ments such as the RCEP, TPP sans the US, and FTAAP. We plan to complete several papers and present them at the 20th Annual Conference on Global Economic Analysis at Purdue University, at the International Conference on Economic Modeling(EcoMod) in Ljubljana, Slovenia, and at the Asia-Pacific Economic Association Conference in Korea. The presented papers will be revised, and we will try to submit them in refereed international journals.
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