Outline

1. Introduction
2. Model and Data
   • Global Trade Analysis Project (GTAP)
3. Policy Shock
4. Graphical Results
5. Future Work

• Note
  • The full paper will be coming out soon. Stay tune! https://jeffjkuo.github.io/research
  • Any question or comment, please email to jeffkuo@gwu.edu
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Introduction

• Main Question
  • If Taiwan joins RCEP (Regional Comprehensive Economic Partnership), how does it affect China, the U.S., and the rest of world?
• Relating Literature
  1. Precarious Triangle (2000~)
     • Murray Weidenbaum 2000. “United States-China-Taiwan: A Precarious Triangle.” Challenge, Vol. 43, No. 5, pp. 92-106
  2. China Syndrome (2010~)
     • Autor, David H., David Dorn, and Gordon H. Hanson. 2013. “The China Syndrome: Local Labor Market Effects of Import Competition in the United States.” American Economic Review, 103 (6): 2121-68.
• Taiwan’s Role?
  • If Taiwan joins RCEP, will the U.S. hurt? Will China benefit?
  • If Taiwan is invited to join RCEP, should we discontinue ECFA?
• Contributions
  • We single out Taiwan, China, and the U.S.
  • We analyze the interaction between Preferential Trade Agreements

GTAP

• Global Trade Analysis Project (GTAP)

  • GTAP Book (Thomas Hertel, 1997)

  • GTAP Data Base

• Data
  • People affiliated with GTAP upload each country’s Input-Output (I-O) Tables
• CGE Model
  • General Equilibrium (Walrasian Equilibrium)
    • Definition: G.E. how supply and demand interact and tend toward a balance in an economy of multiple markets working at once.
  • CGE -> Computational General Equilibrium -> Using computers to solve GE
  • We use the default model in the GTAP

RunGTAP

GTAP System

RunGTAP

RunGTAP is a simulator of the (trade) world.

Rehoboam (Westworld III, HBO)

RunGTAP Interface

RunGTAP Setting

• Regional Aggregation

  

GTAP Model Setting - Shock Experiment

Policy Shock - Set Target Import Tariff = 0

GTAP Model Simulation Results

GDP Change

Welfare Change (Millions)

Exporting Volume Change

Result of Joining RCEP

• We only shock the tms (import tarriff) between Taiwan and RCEP

• We show EV and \(\Delta\)GDP after the experimental shocks

  

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Result of Joining RCEP

• Now we switch to \(\Delta\)GDP after the experimental shocks

Conclusion & Future Work & Thank You

• Primary Conclusions
  • RCEP might be a good option for Taiwan.
  • Taiwan is blocked, not because of pure politcal reasons.
  • But if the U.S. was excluded, the U.S. will hurt the most.
• Future Work
  • Apply Heterogeneous Shocks in different production sectors.
  • Explore more possible shocks in policy tools.
  • Expand the analysis to see the synergy of multiple PTAs, i.e., CPTPP and EFCA.
• Thank You!
  • It’s really nice to see you, and welcome to D.C!
  • Comments and questions, please send to jeffkuo@gwu.edu