COMPUTATIONAL ANALYSIS OF THE ECONOMIC-EFFECTS OF AN EAST-ASIAN PREFERENTIAL TRADING BLOC

The Michigan CGE trade model is used to analyze the possible economic consequences of the formation of an East Asian trading bloc (EATB) com posed of the four major trading countries in the region, namely Japan, South Korea, Taiwan, and Singapore. We also analyze the effects of an EATB that includes the United States. We find for the most part that economic welfare increases for all bloc members as well as nonmembers, the real returns to both labor and capital rise due to scale effects, and the sectoral employment impacts appear broadly representative of the comparative advantage of the member countries. (C) 1996 Academic P ress, Inc.