Comparing alternative China and the US arrangements with CPTPP

Abstract Following China's formal application to join the Comprehensive and Progressive Trans‐Pacific Partnership (CPTPP), the US' intention to rejoin the trade agreement has obviously strengthened. This article develops a numerical general equilibrium model encompassing 29 countries, incorporating the concept of inside money and trade costs. The aim is to simulate and compare the impacts of China and the US participating in the CPTPP. Comparison results indicate that China entering the CPTPP would yield greater benefits for remember countries in terms of trade, GDP and manufacturing employment compared to the US. Moreover, China's participation can also positively impact GDP and manufacturing employment in most non‐member countries. Additionally, our simulation results unveil that the US would be more favoured among CPTPP members and globally concerning welfare considerations.