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Petri and Plummer projected that real income of Vietnam would grow by 2. The corresponding growth rates for Malaysia are projected as 1. However, all these studies were conducted considering the USA as a significant member of the agreement. The present paper aims to address this issue. For analytical purpose, the paper resorts to a global CGE framework.
The analysis includes the impact of the agreement on several economic variables like total output, export, import, labour employment, welfare, household income, etc. The present study uses the latest version of the GTAP database with the base year for the analysis. The paper is structured in the following order: Methodology, data and scenario development will be discussed in Sect. Summary and conclusion of the study will be presented in Sect. The CGE modelling framework has been chosen to undertake the present analysis. It is a comparative static multi-commodity multi-regional CGE model.
The basic structure of the GTAP model includes: industrial sectors, households, Governments and global sectors across countries. Countries and regions in the world economy are linked together through trade. Prices and quantities are simultaneously determined in both factor markets and commodity markets. The five main factors of production included in the model are skilled, unskilled labour, capital, natural resources and land.
The total supply of labour and land is fixed in the model, while capital is allowed to be mobile across country depending on its rate of return.
Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis
In the model, the firms minimize costs of inputs given their level of output and fixed technology. Producers operate under constant return to scale, where the technology is described by the Leontief production function. This means that the relationship between intermediate inputs is fixed. Similarly, the relationship between the amount of intermediate inputs and outputs is also fixed. Primary factors of production are assumed to substitute for one another according to constant elasticity of substitution. The overall elasticity of substitution among the primary factors determines the ability of the economy to change its output mix in response to changes in relative prices or changes in the endowment of the factors.
Firms can purchase intermediate inputs locally or import them from other countries. It is also assumed that domestically produced goods and imports are imperfectly substituted. This is modelled using the Armington structure.
Why The Trans-Pacific Partnership is about more than trade
Household behaviour in the model is determined from an aggregate utility function. The aggregate utility is modelled using a Cobb—Douglas function with constant expenditure shares. This utility function includes private consumption, Government consumption and savings. Private household consumption is explained by a constant difference elasticity CDE expenditure functions. Current Government expenditures are covered by the regional household utility function as a proxy for Government provision of public goods and services. Domestic support and trade policy tariff and non-tariff barriers are modelled as ad valorem equivalents.
These policies have a direct impact on the production and consumption sectors in the model. Changes in these policies have an impact on the production and consumption decisions of sectors in the model. There are two global sectors in the model: transportation and banking. The transportation sector takes into account the difference in the price of a commodity as a result of the transportation of the good between countries.
The global banking sector brings the savings and investment into equilibrium in the model. Closure plays a very important role in GTAP modelling. Closure is the classification of the variables in the model as either endogenous or exogenous variables. Endogenous variables are determined by the model, and exogenous variables are predetermined outside the model and can therefore be changed from the outside or shocked.
Closure can be used to capture policy regimes and structural rigidities. The closure elements of GTAP can include population growth; capital accumulation, including FDI; industrial capacity; technical change; and policy variables taxes and subsidies.
A standard GTAP closure considers full employment in the factor markets. It is a neoclassical approach whereby the endowments of the factors of production are fixed allowing the market prices to adjust so as to maintain full employment. This is done by swapping the fixed endowment of unskilled labour with fixed real wage of unskilled labour. In equilibrium, all firms have zero real profit, all households are on their budget constraint and global investment is equal to global savings. The number of endogenous variables has to equal the number of equations.
This is a necessary but not sufficient condition for a solution.
Trans-pacific Trading Partnership | Economics Online
It may be general equilibrium GE or partial equilibrium PE depending on the choice of the exogenous variables. The standard GTAP closure has the following characteristics: All markets are in equilibrium, all firms earn zero profits and regional household expenditures are on budget constraint. Details of this framework is given in supplementary file Additional file 1. The GTAP framework has strength because of theoretical regards, ability to represent the direct and indirect interactions among all sectors of the economy and precise detailed quantitative results Thierfelder et al.
To undertake the analysis, the present study uses the version 9 of the GTAP model and database based on Narayanan et al. The 57 industrial sectors have been aggregated to 28 sectors. The countries have been aggregated into 13 regions, with an emphasis on the countries engaged in TPP agreement, including the USA. The paper focuses on 28 sectors for each of the 13 regions considered in the model. The simulation exercise includes the following four scenarios:. BAU remains same throughout the analysis and is the base from which other scenarios will be compared. In the last two scenarios, the actual tariff liberalization commitments that immediately apply i.
The TPP tariff commitments comprise more than , tariff lines and more than pages of tariff-rate quotas TRQs commitments for various products including agriculture, industry and manufacturing. These tariff lines and TRQs were carefully formulated to fit within the GTAP sector framework, and all of these data points were incorporated into our assessment.
Trade liberalization impacts output growth in two ways, by affecting demand in outputs and supply of inputs. Malaysia also marginally loses from non-participation of the USA.
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For Brunei, transport equipment, machinery equipments and chemicals, rubber and plastic register modest output growth whereas for Singapore, food products and petroleum and coal tar products perform well in terms of growth in output. For Vietnam and Malaysia, textiles and apparel sectors are expected to exhibit significant growth.
For Malaysia, wood products, electronic equipment, chemicals, rubber and plastic and machine equipments also show growth. Vietnam does the same in leather products, fishing, animal products and mineral products.
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However, the growth of output of these sectors greatly affected when the USA is considered a non-member. For instance, output growth rates of textiles and apparel in Malaysia and Vietnam are 26 and For Singapore, the top five sectors mostly constitute the services. In other TPP nations, construction, other services and transport and communication services are also likely to exhibit a positive output growth. See Budget Paper No. The authors have no other conflicts of interest to declare. Joel Lexchin, York University, Canada.
National Center for Biotechnology Information , U. Global Social Policy. Glob Soc Policy. Published online Oct Author information Copyright and License information Disclaimer. Email: ua. This article has been cited by other articles in PMC. Abstract The final text of the Trans Pacific Partnership Agreement TPP , agreed between the 12 negotiating countries in , included a suite of intellectual property provisions intended to expand and extend pharmaceutical company exclusivities on medicines.
Keywords: Access to medicines, developing countries, intellectual property, pharmaceuticals, Trans Pacific Partnership Agreement. As the negotiations wound up in October , MSF concluded that Although the text has improved over the initial demands, the TPP will still go down in history as the worst trade agreement for access to medicines in developing countries, which will be forced to change their laws to incorporate abusive intellectual property protections for pharmaceutical companies.
Method We examined the final TPP IP chapter Chapter Intellectual Property Trans Pacific Partnership, and identified those provisions which, based on analyses of previous trade agreements and of the TPP text, could be expected to have an impact on the scope and length of pharmaceutical monopolies and on the time to market entry of generic or biosimilar copies of biologic medicines.
For each of these provisions, we examined the following: Which of the TPP parties may need to implement legislative changes if the TPP were to come into force in the form agreed among the 12 participating nations in ; Whether a transition period would apply for particular countries, and if so, the length of the transition period; The likely effect of the provision on access to affordable medicines, based on a review of existing evidence in the literature regarding IP stringency. TPP IP provisions with implications for access to medicines Despite resistance by the majority of TPP countries to the US pharmaceutical industry agenda throughout the negotiations, many provisions remained in the final text of the IP chapter Trans Pacific Partnership, which extend or expand exclusivities on medicines and can be expected to affect affordable access, including the following: Secondary patents: patents for new uses, new methods or new processes of using an existing product Article Table 1.
Open in a separate window. Andean Community Decision No. TPP Chapter 18, Footnote 30 Secondary patenting is widely acknowledged to have a significant effect on the length of pharmaceutical monopolies and on the entry of generic medicines to the market Gleeson et al. Exclusivity of undisclosed test data biologics TPP Article Patent linkage Article Notes 1.
Journal of Generic Medicines 9 : 75— Amin T, Kesselheim AS. Health Affairs 31 : — Outcomes: Biologics. Baker B. PLoS Medicine 13 3 : e Baldwin R, Thornton P. London: Centre for Economic Policy Research. VhKIh8tViko accessed 2 August Northwestern Journal of Technology and Intellectual Property 8 : — Bradner E. CNN Politics.
Related Trans-Pacific Partnership (TPP) Countries: Comparative Trade and Economic Analysis
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