Assessing Regional Trading Arrangements in the Asia-Pacific

Using both a gravity model to consider the natural trading bloc hypothesis and simulation using a computer generated equilibrium (CGE) model to make welfare estimates, this publication examines the potential effect of a subset of the new regional trading arrangement (RTA) proposal in the Asia Pacific Economic Cooperation region.

The objective of this paper is to see to what extent the predictions from these two disparate techniques can be correlated in the context of the new Asia-Pacific proposals.