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GTAP Resources: Resource Display

GTAP Resource #6229

"International Responses to US Protectionism: Trade Diversion and Continued Regional and Global Integration without the US "
by Robinson, Sherman and Karen Thierfelder


Abstract
The last half of the twentieth century was characterized by greatly expanded trade and the evolution of globalized value chains and regional integration. Currently, international trade is dominated by three interconnected regional economies (ICREs): Europe, East and Southeast (E&SE) Asia, and North America. They each account for about a quarter of global GDP but differ in their shares of global exports. Europe has the largest share (37%), followed by E&SE Asia (28%) and North America (14%). The implication is that the US is no longer hegemonic in the world trading system and that the world can continue regional integration and globalization within the WTO system without the US.

We use a multi-region, multi-sector global computable general equilibrium (CGE) model (GLOBE) with GTAP 10 data to analyze changes in trade and production patterns that may result from US protectionist policies and the emergence of new regional agreements such as CPTPP and RCEP. We consider several scenarios of US policies and response by trading partners, including continuing or increasing US protectionism. We find that adjustment to US disengagement is feasible—the changes in trade shares as countries divert trade are modest and achievable, with little impact on the volume of global trade. If US protectionism leads to retaliation by major trading partners (or voluntary withdrawal from US supply chains), other countries should be able to gain markets from global trade diversion around the US. We also consider scenarios of different engagement by China and India, with implications for global trade and the E&SE Asia regional economy.



Resource Details (Export Citation) GTAP Keywords
Category: 2021 Conference Paper
Status: Not published
By/In: Presented during the 24th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2021
Version:
Created: Thierfelder, K. (4/11/2021)
Updated: Thierfelder, K. (4/11/2021)
Visits: 28
- Multilateral trade negotiations
- Preferential trading arrangements
- North America


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