Abstract
The Trans-Pacific Partnership (TPP) is a landmark agreement for the United States and the global trading system. In a paper included in the Peterson Institute’s submission for these Hearings (Petri & Plummer, 2016), we estimated that the TPP will increase US real incomes substantially and establish new, market-oriented rules in a host of rapidly changing areas of international commerce.
We use a comprehensive, state-of-the-art computable general equilibrium (CGE) model to analyze the TPP. The model is based on the GTAP database, but also includes new theoretical features and information on tariffs, non-tariff barriers, trade agreements and other variables. It covers trade among 29 countries and regions and is documented on asiapacifictrade.org. Over the last three decades the granular microeconomic structure of CGE models has made them the tool of choice for trade policy analysis. They enable researchers to study changes in specific trade barriers and to trace effects on output, productivity and wages across countries. CGE models have been extensively tested and refined, and are now ubiquitous in policy analysis in fields ranging from trade to agriculture, energy and the environment.