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2. East Asia decouples from the United States: Trade war, COVID-19, and East Asia's new trade blocs
- Author:
- Peter A. Petri and Michael G. Plummer
- Publication Date:
- 06-2020
- Content Type:
- Working Paper
- Institution:
- Peterson Institute for International Economics
- Abstract:
- he deepening US-China trade war and nationalist reactions to the COVID-19 pandemic are reshaping global economic relationships. Alongside these developments, two new megaregional trade agreements, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP), will refocus East Asia’s economic ties in the region itself. The new accords are moving forward without the United States and India, once seen as critical partners in the CPTPP and RCEP, respectively. Using a computable general equilibrium model, we show that the agreements will raise global national incomes in 2030 by an annual $147 billion and $186 billion, respectively. They will yield especially large benefits for China, Japan, and South Korea and losses for the United States and India. These effects are simulated both in a business-as-before-Trump environment and in the context of a sustained US-China trade war. The effects were simulated before the COVID-19 shock but seem increasingly likely in the wake of the pandemic. Compared with business as before, the trade war generates large global losses rising to $301 billion annually by 2030. The new agreements offset the effects of the trade war globally, but not for the United States and China. The trade war makes RCEP especially valuable because it strengthens East Asian interdependence, raising trade among members by $428 billion and reducing trade among nonmembers by $48 billion. These shifts bring regional ties closer to institutional arrangements proposed in the 1990s and incentivize greater cooperation among China, Japan, and South Korea.
- Topic:
- Treaties and Agreements, Trade Wars, Trans-Pacific Partnership, Free Trade, COVID-19, and Protectionism
- Political Geography:
- China, Asia, North America, and United States of America
3. Advancing the U.S.-Korea Economic Agenda
- Author:
- Wendy Cutler and Hyemin Lee
- Publication Date:
- 01-2019
- Content Type:
- Working Paper
- Institution:
- Asia Society
- Abstract:
- For nearly 70 years, the United States-Republic of Korea alliance has remained strong, built mainly on shared strategic and national security interests. While the North Korean nuclear threat has long dominated political discussions and media headlines, the economic pillar of the relationship is no less important. With amendments to the U.S.-Korea Free Trade Agreement (KORUS) now in place, it is an opportune time for both countries to look beyond KORUS and expand their bilateral economic engagement to new and evolving areas. This closer cooperation can serve as an engine for growth in a slowing Korean economy, as an opportunity for job creation in the United States, and as a vehicle for jointly writing the rules for the technologies of the Fourth Industrial Revolution. As policymakers in Washington and Seoul look to the future, the Asia Society Policy Institute (ASPI) charts a possible path forward in its newest issue paper, Advancing the U.S.-Korea Economic Agenda. This paper presents a range of concrete actions that the United States and South Korea can take to advance and strengthen their bilateral economic relationship in the areas of trade and investment, energy, digital economy and advanced technologies, infrastructure, and women’s economic empowerment. The recommendations included in this paper are based partly on two roundtables ASPI organized with South Korean and American experts in Seoul in June 2018, with support from the Korea Institute for International Economic Policy, and in Washington, D.C., in October 2018. The ideas are also based on discussions with government officials, business leaders, and think tank experts.
- Topic:
- National Security, Treaties and Agreements, Bilateral Relations, Alliance, and Trade
- Political Geography:
- Asia, South Korea, North America, and United States of America
4. Domestic Politics Force India's Withdrawal from RCEP and Broader Trade Disengagement
- Author:
- Amitendu Palit
- Publication Date:
- 11-2019
- Content Type:
- Working Paper
- Institution:
- East-West Center
- Abstract:
- The Regional Comprehensive Economic Partnership (RCEP) negotiations concluded at the ASEAN Summit in Bangkok on November 4, 2019. Fifteen RCEP members, including the ten-ASEAN countries, and Australia, China, Japan, Korea and New Zealand, agreed to commence preparation of the legal text of the agreement for signing in 2020. India was the only member to opt out, citing significant unresolved outstanding issues. India’s decision was surprising as it actively participated in the negotiations that lasted for 29 rounds and went on for more than six years since beginning in 2013. Domestic pressures forced Prime Minister Modi to withdraw India from RCEP at the last minute. It also points to disengagement becoming the prominent character of India’s trade policy as domestic protectionist interests successfully undermine outward-oriented economic visions.
- Topic:
- Politics, Treaties and Agreements, Economy, Trade, and ASEAN
- Political Geography:
- China, India, and Asia