| Summary: | 碩士 === 淡江大學 === 國際事務與戰略研究所碩士班 === 102 === The Trans-Pacific Partnership (TPP) is a pioneering instrument regarding cross border liberalization of goods and service flows that transcends WTO disciplines and addresses many issues including regulation and border controls. Many pacific countries are negotiating members. The fact that China is not a member is noteworthy. This thesis paper is an assessment of the potential effects TPP may cause on the trade of China using numerical simulation. Initially a simple three country model including China, USA and Japan was designed. This very simple model cuts down to the very basic simultaneous causality between growth in exports and growth of income focusing on a reduction in non-tariff barriers. Once the model was calibrated and results were reasonable, two more groupings were included into what is now called the fully expanded model including China, USA, Japan, TPP-5 and ROW. TPP-5 is composed by Australia, Canada, Malaysia, Mexico and Singapore which together account for 80% of the trade with China after deducting the amount from USA and Japan while ROW, or rest of world, accounts for the remaining 20%. The results from running both models are congruent. The tendency observed from the most reasonable scenario is that TPP members will benefit modestly and China and ROW will suffer slight detriment. Notwithstanding, the findings indicate that as China’s relative cost of import raises as an inverse effect from a reduction of non-tariff barriers for TPP countries, TPP members will also feel the adverse effect. China plays a significant role in the world economy and consequently TPP negotiators cannot marginalize China without expecting to share in on the negative effects this will have. The three country model indicated that Japan would see better growth than USA, while the fully expanded model portrayed TPP-5 as the biggest winner. We attribute this to the inclusion of Mexico and Canada whom have already entered into a FTA with USA (NAFTA) and therefore TPP would further facilitate trade amongst them.
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