7 Important economy-wide benefits of multilateral trade agreements for Asian-Pacific countries include more coherent trade rules to facilitate international business operations in the region; trade, income and output creation; productivity and welfare gains, as well spillover effects from reductions in non-tariff barriers (NTMs) and regulatory harmonization.<sup>5</sup> Quantitative studies on economic impacts of multiregional free trade agreements employ global CGE models that estimate effects of different multilateral integration scenarios on their member countries. Integration scenarios are differentiated in the number of participants, as well as the scope and coverage of multilateral agreements (more or less ambitious provisions), including TPP with different number of potential members (such as CPTPP, TPP12 or TPP16), as well as RCEP and potential FTAAP. Simulations also differ by incorporating different set of trade barriers (tariff and non-tariff) and by the use of different assumptions about the size of NTM reductions, economic growth projections, incorporating positive “spillover” effects for non-member countries from the liberalization of nontariff barriers under TPP, etc. Although the results of simulations may differ in average gains and relative position of some countries, overall projections of expected impacts of Asia-Pacific multilateral agreements are rather consistent.

Petri and Plummer (2016) mapped provisions of the TPP12 via projected changes in tariffs, NTMs on goods and services, and barriers on Foreign Direct Investment (FDI). They estimated that TPP12 would have increased total member countries’ real income by $465 billion or 1.1 percent over baseline scenario by 2030, while their exports are expected to grow by $1,025 billion or 11.5 percent. TPP12 would have generated considerable benefits for all members, with the most substantial gains for Vietnam and Malaysia – their annual real incomes would have increased by 8.1 and 7.6 percent of GDP, respectively, over baseline scenario estimates by 2030. The United States was projected to be the largest beneficiary in absolute terms – its real income will grow by $131 billion, or 0.5 percent of GDP.

These estimates coincide with World Bank (2016a) projections of the impacts of TPP12, projecting an increase of GDP in members states by an average of 1.1 percent by 2030, as well as member countries’ trade by 11 percent by 2030. It also highlights that the benefits of the TPP12 would mostly be derived from reduction in non-tariff measures in goods and services (accounting for 69% and 16% of the total increase in GDP) rather than from decreased tariffs (explains 15% of GDP increase).

In Petri et al. (2017), simulations are expanded by including more integration alternatives such as TPP12, CPTPP, TPP16, US-Japan FTA and RCEP. When comparing projected effects of these integration options, it is concluded that in general ‘wide-membership’ and ‘high-quality’ TPP-like multiregional agreements are usually expected to provide Asia-Pacific countries with greater benefits compared to other integration alternatives. For example, the highest benefits among the considered options can come from TPP16 (adding five more countries to CPTPP – Indonesia; Korea; Philippines; Taiwan, China; and Thailand), with real income increasing by 2.2 percent over baseline scenario estimates by 2030 – vs 1.1% for TPP12, 1% for CPTPP and 0.4% for RCEP. In absolute terms, expected benefits for members from CPTPP (without the United States) are only about one-third as large as those expected from the TPP12 – $465 billion vs $157 billion of real income gains (Petri et al., 2017). Moreover, multilateral options would yield benefits greater than bilateral agreements between individual

> 5 Due to the nature of most regulation, it may be difficult or costly for one country to discriminate among trading partners.  Thus, benefits from liberalization of NTMs or regulatory coherence agreed in a regional trade agreement can be multilateralized and accrue to non-members.