Long-run Effects of APEC Trade Liberalisation: An Applied General Equilibrium Analysis

This paper reports work in which an established multi-country computable general equilibrium model is used to estimate the effects on the industrial and regional structures of trade liberalization proposed as part of the Asia-Pacific Economic Co-operation (APEC) Forum. In setting up the model long-run assumptions are made. The liberalization is assumed not to affect aggregate employment in each region, and the only effects on rates of return come from a small uniform percentage change required to fix the worldwide capital stock. Real investment in each region is forced to respond at the same rate as the capital stock. Results for each region's microeconomic variables, and for output by broad sector groupings are reported.