A Positive Study On Trade Effects Of CAFTA

The Regional Doctrine is an important phenomenon after World War II. From 1950's, developing countries have set up more than 100 Regional Economy Integration Organization successively. But theoretical research and practical experience showed that they were unsuccessful. Developing country's regional economy integration is a perplexity to international economics all the time.China plus ASEAN Free Trade Area (shorted for CAFTA) is the first regional economic integration organization that China joined formally, which is also a regional organization consisting mainly of developing countries (except Singapore). Its trade effects and prospects are the objective we care about very much and the target this paper will study. The focus problems needed to be solved are as following: 1, From the angle of trade, whether there is complementarity in the trades between China and ASEAN countries, whether both sides can offer supports to the reciprocal markets; 2, How about the economic and trade influence on China after CAFTA has set up; 3, How about the influence on the trade between China and member countries, and the trade between China and main non-member trading partnersOn theoretical frame and realistic foundation, we have an empirical study on the trade effect of CAFTA. The paper can be divided into four sections including six chapters.Section One, including Chapter One, is the openness of this paper. It introduces research background, research objective, research train of thoughts and logic frame, its weak points and the possible theory innovations etc.Section Two, including Chapter Two and Three, is the theoretical frame realistic foundation of CAFTA, which makes essential foreshadowing for the following study.In order to explore the trade effect of CAFTA in an all-round way, we have constructed the theoretical frame in Chapter Two, including the Customs Union Theories with partial equilibrium or general equilibrium, the FTA Welfare Theories with one-country model or two-countries model, and the Intra-Industry Theories.Chapter Three analyzed the realistic foundation of CAFTA, focusing on probing into mutual benefit and complementarity. We classify a large amount of primitive trade data in the past 20 years and sum up the whole trends of China's and ASEAN countries' trade patterns from total amount characteristic to country classification and to staple structure. In addition, the trade structure between China and ASEAN countries, according to our calculations, reveals increasing complementarity in FTA and competitive tendency of export structure outside AFT. The structure characteristic reflects that both sides have chosen the similar evolution route during the process of participating in international division and international industry's gradient to shift. The long-term dynamic change on the comparative advantage and competitive advantage of China and ASEAN countries can explain above-mentioned conclusions well.Section Three, including Chapter Four and Five, carries on the empirical study on the influence after the setup of CAFTA from two aspects.Chapter Four analyzes how the setup of CAFTA has influence on Chinese economic and trade. They are as following: (1) GL index demonstrates that China and ASEAN countries have obvious tendency from traditional trade among industries to Intra-Industry trade. Among these factors influencing the Intra-Industry trade between China and ASEAN countries: the enlargement of market capacity and the improvement of per capita GDP will have much facilitation, while distances and customs tariff can weaken intra-industry. These factors may have different change after the setup of CAFTA, thus influence the development of Chinese intra-industry trade in the future;(2) These exists high similarity and competitiveness between China and ASEAN countries in agricultural products. With the implement of " the Scheme of Quickening the Reaping of Agricultural Products in Early Days ", this situation will be sharpened further, which will certainly produce certain negative effect and impact...