Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach
Abstract The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is one of the recently negotiated multilateral free trade agreements which aims to establish a free trade agreement between 11 economies (after US exit) on both sides of the Pacific. The formation and implemen...
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| Format: | Article |
| Language: | English |
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SpringerOpen
2018-01-01
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| Series: | Journal of Economic Structures |
| Subjects: | |
| Online Access: | http://link.springer.com/article/10.1186/s40008-017-0103-x |
| _version_ | 1811278286549942272 |
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| author | Muhammad Aamir Khan Naseeb Zada Kakali Mukhopadhyay |
| author_facet | Muhammad Aamir Khan Naseeb Zada Kakali Mukhopadhyay |
| author_sort | Muhammad Aamir Khan |
| collection | DOAJ |
| description | Abstract The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is one of the recently negotiated multilateral free trade agreements which aims to establish a free trade agreement between 11 economies (after US exit) on both sides of the Pacific. The formation and implementation of this proposed partnership is a valid threat for other economies, particularly for Pakistan. Pakistan will likely to suffer from this agreement due to trade diversion of textile and apparels in favor of the CPTPP members. The reason can be extended in terms of the likely ‘yarn forward rule,’ according to which, it is obligatory for the CPTPP member economies to import all the components of manufactured products from other CPTPP member economies. So, the implementation of the CPTPP will have an impact on global supply chain of textile and apparels. With this backdrop, this study evaluates the likely impacts of the CPTPP on the regional trade flows and other macroeconomic aggregates of Pakistan using a global computable general equilibrium model. The economy-wide results show the proposed CPTPP will have a negative impact on Pakistan’s real GDP, sectoral exports and imports and at household level. However, if Pakistan joins CPTPP, there is an overall positive impact on Pakistan’s economy. Thus, keeping in view Pakistan’s ideal geographical and strategic location and its potential to be a transit economy with a junction of south Asia, west Asia and central Asia, this study suggests that Pakistan’s proposed entry to CPTPP will not only yield a wide gain to the region but will reduce the gap between poor and rich in Pakistan and hence will have a positive impact on overall income inequality in Pakistan. |
| first_indexed | 2024-04-13T00:33:10Z |
| format | Article |
| id | doaj.art-378a7b9c4bc449dfb658af9f0825da4f |
| institution | Directory Open Access Journal |
| issn | 2193-2409 |
| language | English |
| last_indexed | 2024-04-13T00:33:10Z |
| publishDate | 2018-01-01 |
| publisher | SpringerOpen |
| record_format | Article |
| series | Journal of Economic Structures |
| spelling | doaj.art-378a7b9c4bc449dfb658af9f0825da4f2022-12-22T03:10:25ZengSpringerOpenJournal of Economic Structures2193-24092018-01-017112010.1186/s40008-017-0103-xEconomic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approachMuhammad Aamir Khan0Naseeb Zada1Kakali Mukhopadhyay2Department of Economics, COMSATS Institute of Information Technology (CIIT)Quaid-I-Azam University IslamabadGokhale Institute of Politics and EconomicsAbstract The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is one of the recently negotiated multilateral free trade agreements which aims to establish a free trade agreement between 11 economies (after US exit) on both sides of the Pacific. The formation and implementation of this proposed partnership is a valid threat for other economies, particularly for Pakistan. Pakistan will likely to suffer from this agreement due to trade diversion of textile and apparels in favor of the CPTPP members. The reason can be extended in terms of the likely ‘yarn forward rule,’ according to which, it is obligatory for the CPTPP member economies to import all the components of manufactured products from other CPTPP member economies. So, the implementation of the CPTPP will have an impact on global supply chain of textile and apparels. With this backdrop, this study evaluates the likely impacts of the CPTPP on the regional trade flows and other macroeconomic aggregates of Pakistan using a global computable general equilibrium model. The economy-wide results show the proposed CPTPP will have a negative impact on Pakistan’s real GDP, sectoral exports and imports and at household level. However, if Pakistan joins CPTPP, there is an overall positive impact on Pakistan’s economy. Thus, keeping in view Pakistan’s ideal geographical and strategic location and its potential to be a transit economy with a junction of south Asia, west Asia and central Asia, this study suggests that Pakistan’s proposed entry to CPTPP will not only yield a wide gain to the region but will reduce the gap between poor and rich in Pakistan and hence will have a positive impact on overall income inequality in Pakistan.http://link.springer.com/article/10.1186/s40008-017-0103-xTrans-Pacific partnershipGrowthInequalityEconomy-wide framework |
| spellingShingle | Muhammad Aamir Khan Naseeb Zada Kakali Mukhopadhyay Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach Journal of Economic Structures Trans-Pacific partnership Growth Inequality Economy-wide framework |
| title | Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach |
| title_full | Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach |
| title_fullStr | Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach |
| title_full_unstemmed | Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach |
| title_short | Economic implications of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on Pakistan: a CGE approach |
| title_sort | economic implications of the comprehensive and progressive agreement for trans pacific partnership cptpp on pakistan a cge approach |
| topic | Trans-Pacific partnership Growth Inequality Economy-wide framework |
| url | http://link.springer.com/article/10.1186/s40008-017-0103-x |
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