A CGE Study of Economic Impact of Accession of Hong Kong to ASEAN-China Free Trade Agreement
We conduct a set of global computable general equilibrium (CGE) simulations to evaluate economic effects of Hong Kong's accession to the ASEAN-China FTA (HK-ACFTA) by implementing tariff elimination, logistics enhancement, and reduction in service trade barriers. All the participating countries can benefit from the accession, resulted in higher real GDP and economic welfare. The welfare gain becomes the largest when HK-ACFTA improves the existing agreement and trade facilitation programs between ASEAN and China. The simulation results indicate that such trade facilitation could generate considerable export volume increases for both ASEAN and China.