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No trans-pacific partnership? Good or bad for Mexico?

No trans-pacific partnership? Good or bad for Mexico? PurposeThe purpose of this paper is as follows: first, it aims to explain the overall economic implications of the trans-pacific partnership (TPP). Second, it aims to provide an in-depth analysis of the TPP’s quantitative impact on an upper-middle economy such as Mexico, as well as on the USA.Design/methodology/approachThe analysis is performed using a computable general equilibrium (CGE) model.FindingsThe results suggest that in the short run, both Mexico and the USA would slightly benefit from the TPP. Tariff reductions would lead to less bilateral trade between Mexico and the USA and the stronger integration of both countries with the rest of the TPP members. The opposite is true after a decrease in non-tariff barriers (NTBs). Overall, in terms of the impact on Mexico, trade integration with the rest of the TPP members prevails. This suggests that a TPP without the USA could still be beneficial.Originality/valuePrevious studies on the TPP have mainly focused on its impact for the USA, which is also analysed in the present study. The effects of the TPP are estimated for a broad set of micro and macroeconomic variables, paying particular attention to the reductions of NTBs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of International Trade Law and Policy Emerald Publishing

No trans-pacific partnership? Good or bad for Mexico?

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1477-0024
DOI
10.1108/JITLP-10-2016-0027
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is as follows: first, it aims to explain the overall economic implications of the trans-pacific partnership (TPP). Second, it aims to provide an in-depth analysis of the TPP’s quantitative impact on an upper-middle economy such as Mexico, as well as on the USA.Design/methodology/approachThe analysis is performed using a computable general equilibrium (CGE) model.FindingsThe results suggest that in the short run, both Mexico and the USA would slightly benefit from the TPP. Tariff reductions would lead to less bilateral trade between Mexico and the USA and the stronger integration of both countries with the rest of the TPP members. The opposite is true after a decrease in non-tariff barriers (NTBs). Overall, in terms of the impact on Mexico, trade integration with the rest of the TPP members prevails. This suggests that a TPP without the USA could still be beneficial.Originality/valuePrevious studies on the TPP have mainly focused on its impact for the USA, which is also analysed in the present study. The effects of the TPP are estimated for a broad set of micro and macroeconomic variables, paying particular attention to the reductions of NTBs.

Journal

Journal of International Trade Law and PolicyEmerald Publishing

Published: Jun 19, 2017

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