Effects of tariff reduction by regional comprehensive economic partnership (RCEP) on global value chains based on simulation. Issue 20 (28th November 2022)

• Record Type: Journal Article
• Authors: Wen, Hui; You, Yu; Zhang, Yue
• Is Part Of: Applied economics letters. Volume 29:Issue 20(2022)
• Page Start: 1906
• Page End: 1920
• Publication Date: 2022-11-28
• Subjects: RCEP -- global value chain -- global value chain position -- global value chain participation; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2021.1966361
• Languages: English
• ISSNs: 1350-4851

Abstract

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.