"Free Trade in the Pacific Rim: On What Basis?" by Linda M. Young and Karen M. Huff, Chapter 9 of "Global Trade Analysis: Modeling and Applications", Thomas W. Hertel (editor). Based on the README file prepared by Karen M. Huff. **************************************************************************** I. REGIONS AND COMMODITIES Regions: US, Canada and Mexico NAM Japan JPN Australia and New Zealand ANZ China and Hong Kong CHN_HKG South Korea SKOR Taiwan TWN Malaysia and Singapore MYS_SGP Thailand and the Philippines THA_PHL Indonesia IDN Rest of the World ROW Sectors: Food and agriculture food Resources and manufacturing r_mnfc Services services II. EXPERIMENT FILES: SHOCKS, CLOSURES AND SOLUTION METHOD There are three different experiments, distinguished only by the shocks applied: exp1 APEC Preferential Free Trade Area. Import protection within the nine APEC regions is removed (both tariffs and NTBs) but maintained between the rest of the world and APEC. exp2 APEC Trade Reform on a Most Favored Nation Basis (MFN); ROW does not reciprocate. The nine APEC regions remove import barriers for all regions including ROW: however ROW does not reciprocate. exp3 APEC Trade Reform on an MFN Basis; ROW reciprocates. Import barriers for all regions are removed, however they remain in place for ROW-ROW trade. The experiments are cumulative: all the exp1 shocks are included in exp2; in turn all the exp2 shocks are included in exp3. To replicate the experiments with RunGTAP go to the SOLVE page, click on "Load Experiment" and choose either EXP1, EXP2 or EXP3. This will automatically load the shocks, the closure and the solution method for the experiment of interest. CLOSURE The standard "Book" multiregional GE closure (MRGE) is used in all three experiments. SOLUTION METHOD An interesting feature of these experiments is that they demonstrate the non-linearity of the GTAP Model to a marked degree. This is shown by the variation in results as the solution algorithm breaks down the exogenous changes into more, smaller, steps. In case your computer is slow, the supplied experiment files specify the solution method as: method = Gragg; steps = 2 4 6 ; but many more steps are needed for reasonable accuracy. To obtain results similar to those reported in the GTAP book, try method = Euler; steps = 10 20 30 ; It turns out with hindsight that even this is insufficient. Go back to method = Gragg; steps = 2 4 6 ; but this time switch ON automatic accuracy. This will give better accuracy than the Euler solution, in less time. Test your RunGTAP knowledge ! In each experiment, the shock statement mentions a set APEC. Use the View..Subsets and Variables menu command to discover what regions are included in APEC. Notice that the APEC set is not defined either in the the SETS file (View..Sets) or in the main TAB file. Where is the APEC set defined?