Asia's changing role in world trade : prospects for South-South trade growth to 2030

Developing Asias rapid economic growth has been shifting the global economic and industrial centers of gravity away from the North Atlantic, raising the importance of Asia in world trade, and boosting SouthSouth trade. How will trade patterns change over the next 2 decades in the course of economic growth and structural changes in developing Asia and the rest of the world? In particular, what can be expected of developing Asias intraregional trade and its trade with other developing country regions? This paper addresses these questions by projecting a core baseline for the world economy from 2004 to 2030 and comparing it with alternative scenarios for 2030. We employ the global economywide GTAP model and Version 7.1 of the GTAP database, and assume for the core projection that trade-related policies do not change over the next 2 decades. Alternative scenarios explore (i) slower economic growth rates in the Northʺ, (ii) slower productivity growth in primary sectors, and (iii) various trade policy reforms in developing Asia without and with policy reforms also in the Northʺ and in SouthSouth trade. Projected impacts on international prices, sectoral shares of regional gross domestic product and trade, opennessʺ to trade, and welfare gains from trade reforms are highlighted, in addition to their effects on regional shares of global gross domestic product and trade. The paper concludes by drawing out implications for regional and multilateral trade policy.