Potential economic implications of a U.S. – ASEAN FTA on agriculture
Date
2023
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Abstract
The Association of Southeast Asian Nations (ASEAN) is both an agricultural trade partner of the U.S. and a key contributor to the global agricultural market. The implementation of a free trade agreement (FTA) between the U.S. and ASEAN has the potential to reduce or eliminate tariffs on agricultural commodities. This research employs a computable general equilibrium modeling framework to simulate the economic implications of agricultural trade liberalization between the U.S. and ASEAN. Results focus on simulated changes in import quantities and prices, agricultural export sales, production, GDP, and welfare in the U.S. and ASEAN given the full elimination of tariffs on agricultural trade between the two partners. Results show that the U.S. is expected to generate a net welfare gain of $1.9 billion, while the ASEAN region is likely to have a net welfare loss of $415 million.