Indo-Pacific cooperation: what do trade simulations indicate?

• Main Authors: Mohammad Masudur Rahman, Chanwahn Kim, Prabir De
• Format: Article
• Language: English
• Published: SpringerOpen 2020-07-01
• Series: Journal of Economic Structures
• Subjects: Indo-Pacific; Trade; Regional integration; Trade facilitation; CGE
• Online Access: http://link.springer.com/article/10.1186/s40008-020-00222-4

Abstract This paper investigates the potential economic effect of ‘Indo-Pacific’ regional economic cooperation and compares with the extended CPTPP. The Computable General Equilibrium (CGE) results show that the quadrilateral alliance between the United States, Japan, Australia, and India shows although a substantial economic gain whilst South and East Asia join with the Indo-Pacific cooperation, the economic benefit would be enormous. The findings also indicate that South and East Asian improved trade facilitation could bring huge gain as a large part of Indo-Pacific trade has remained unrealized. The trade transaction cost is one of the major trading barriers prohibiting the growth of Indo-Pacific intra-regional trade. The study reinforces that improvement in infrastructure and connectivity that leads to less trade transportation costs should be a necessary step to realise Indo-Pacific trade potential.