PBOC Chief Economist: Exclusion from TPP Could Cost 2.2% of GDP

iFeng: 央行首席经济学家：不加入“大TPP” 会因此损失2.2%的GDP

Simulation results show that, with China's accession ("big TPP") compared to the scenario of China not joining, China will lose 2.2 percent of GDP. TPP is assumed that the transitional period of four years, the average annual opportunity cost in this stage of slightly more than 0.5 percent of GDP. If China does not join a number of other countries will also result in the loss of opportunity cost. For example, South Korea, Japan and other countries with close trade China will bear the equivalent of 1.5 percent of GDP and 0.6% of the GDP of the opportunity cost, while the European Union, Singapore, Vietnam and other countries and regions will benefit because the Chinese do not join.

...If the 16 potential member states have joined the Trans-Pacific Partnership Agreement, the Agreement (the "big TPP") implementation will boost GDP by most member states, which benefit from Korea's GDP accumulated 2.2%, Vietnam 2.1%, China 2.0 %, Japan 1.3%, Australia 1.2%, US 0.3%. Instead of "big TPP" countries will suffer some negative impact, which will also involve non "big TPP" countries in the corresponding free trade negotiations. On the industry level, the main beneficiaries of TPP, including Vietnam, Thailand and China's textile and garment industry, Australia's food processing industry, as well as China and South Korea's electronics industry. Japan and South Korea in the agricultural sector, the United States and Australia textile, garment industry will suffer a greater negative impact.

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The ultimate containment strategy for the U.S. and regional partners (who all have access to U.S. markets) then, is an economic strategy. Yes, these nations will suffer slower growth, but they will retain their sovereignty.