| Limao’s(2016)study points to a puzzle that has seen trade agreements grow by leaps and bounds in recent years-why are trade agreements growing despite countries already enjoying progressively lower most-favored-nation tariffs under the WTO framework?It is evident that countries have negotiated trade agreements with other interests in addition to tariff reduction.In fact,the world is currently in the third wave of regionalism,and the deep integration of regional economies has become the backbone of global economic governance.The external manifestation of deep regional economic integration is the deepening of regional trade agreements,and the endogenous impetus is that with the formation of the international division of labor pattern,there is an objective need to break geographical border restrictions and establish a new generation of international economic and trade rules to achieve transnational allocation of resources and unified coordination of market rules.Therefore,most countries or regions in the world have participated in deep trade agreements to integrate into deep regional economic integration.Although the global economy is currently facing the double impact of trade protectionism and the new epidemic,the signing of deep regional trade agreements is still regarded as a symbol of a country’s positive openness and commitment to regional cooperation in the period of "Slowbalization" where global trade openness is generally declining."The 14th Five-Year Plan outlines that China will implement a free trade zone upgrading strategy and build a global network of high-standard free trade zones.The FTA upgrading strategy is an important measure to improve China’s openness to the outside world and accelerate the construction of a new system of open economy,which has played an important role in building a new system of open economy.Especially against the backdrop of stagnant global trade growth,China’s foreign trade has bucked the trend and shown strong growth momentum,which cannot be achieved without the stable FTA partnership between China and its partner countries.In the context of deepening development of global regional trade agreements,actively integrating into deep regional economic integration and enhancing the level of China’s deep FTA integration will,on the one hand,help China strive for a stable external development environment,especially to seize the right to speak on the platform of regional trade agreements and actively participate in the reconstruction of international economic and trade rules;on the other hand,it is also conducive to China’s docking to international high-standard rules to push back the reform of deep water domestic areas.It is also conducive to China’s deep integration into regional production networks and global value chains.However,the existing studies on the trade effects of deep FTA integration and its impact mechanism have not reached a fully consistent conclusion,and the existing studies mainly focus on the trade effects of FTA on goods,and the research on the impact of service trade is still in the initial stage.Meanwhile,the measurement of FTA deep integration is still in the process of development,and the existing research on FTA deep integration is still focused on developed countries such as the United States and Europe,and the attention to developing countries is still insufficient;in addition,with the acceleration of global economic and trade rules reconstruction,and the gradual participation of developing countries,new issues and new rules are emerging,and FTA deep integration has developed rapidly in recent years.Therefore,the issues related to the level of FTA deep integration and its trade effects still need further research.Based on this,this paper intends to conduct a study on the level of deep FTA integration and its impact on trade in goods and services.Specifically,it includes the following aspects.One is to analyze the theoretical mechanism of FTA deep integration affecting trade in goods and services from the theories of regional integration,new institutional economics,global value chain,etc.Secondly,according to the World Bank’s deep trade agreement evaluation system,an indicator system is constructed which is in line with the practice and development level of China’s FTAs,and the deep integration level of China’s FTAs is assessed.The third is to empirically test the impact of the level of deep integration of China’s FTAs that have come into effect on the trade in goods and services.The specific research contents and findings of this paper include as follows.First,based on the basic theory that regional economic integration affects trade,this paper analyzes the direct and indirect mechanisms through which deep FTA integration affects trade in goods and trade in services,respectively.For goods trade,on the one hand,deep FTA integration generates value chain effect and technology spillover effect by further promoting the free flow of production factors in the region,which in turn directly promotes the growth of goods trade;on the other hand,deep FTA integration generates regulatory convergence effect and signaling effect by improving the intra-regional trade environment,which reduces the trade cost and risk expectation of enterprises,which in turn indirectly Promotes the growth of goods trade.For service trade,on the one hand,deep FTA integration generates value chain effect and technology spillover effect by liberalizing market access for service trade and further promoting free flow of production factors such as people and data,which directly promotes the growth of service trade;on the other hand,deep FTA integration reduces enterprises’ service trade costs and risk expectations by improving trade environment,generating regulatory convergence effect and signaling effect,which indirectly promotes the growth of trade in goods.On the other hand,deep FTA integration improves the trade environment,reduces enterprises’ service trade costs and risk expectations,generates regulatory convergence effect and signaling effect,and indirectly promotes service trade growth.This paper will analyze the direct and indirect mechanisms in detail.Second,relying on the evaluation system of deep trade agreements published by the World Bank in 2020,this paper constructs an evaluation system to evaluate the level of deep integration of China’s FTAs by combining the connotation of China’s high level of opening up and the practice of FTA development,and assesses the level of deep integration in various fields in China’s FTAs that have come into force.The paper assesses that the current FTAs signed by China mainly promote the liberalization of commodities and factors,and the development cooperation-related fields have been enriched and developed in recent years due to their less constraints and more targeted needs,while the deep integration level of the regulation-related fields is still insufficient.Although China has incorporated environment,labor,competition policy,government procurement and other issues into FTAs,on the whole,China is still relatively cautious about these issues,and most of them are only general,principle-based provisions or relatively broad expressions,with declaratory provisions such as strengthening cooperation and exchange,and most of them are not applicable to dispute settlement mechanism and lack of mandatory binding force.Third,this paper conducts an empirical analysis on the effcts of China’s FTA deep integration level on trade in goods and services.The analysis concludes that the level of deep FTA integration has a significant positive effect on China’s import and export of goods and services trade,and the positive effect on China’s imports is greater than that on exports.In the robustness test section,this conclusion still holds after excluding the Hong Kong and Macao samples,considering the financial crisis shock and replacing the explanatory and explanatory variables.The finding still holds after applying PSM and entropy balance analysis to deal with the endogeneity problem.From the partner country perspective,this positive contribution comes mainly from the "South-South" FTAs signed by China with developing countries rather than the"North-South" FTAs signed with developed countries.The main innovations and contributions of this paper include the following.First,this paper expands the research on the economic consequences of deep FTA integration and provides empirical evidence on the effects of deep FTA integration from the perspective of trade in goods and trade in services.Previous research methods on the economic consequences of FTA mainly introduced the dummy variable of whether to sign FTA to carry out the analysis.With the continuous improvement of measurement methods,especially the development of research on deep FTA integration in recent years,existing studies have measured the deep integration of FTA through various methods,and then analyzed its economic consequences such as trade effects.However,relevant studies still have not reached a fully consistent conclusion.Based on the existing studies,this paper analyzes and studies the trade effects of deep integration of FTA in China to further verify the relevant conclusions.Second,this paper enriches the literature related to the analysis of the theoretical mechanism of FTA impact on trade and provides the analysis of the specific impact paths of FTA deep integration level affecting trade in goods and trade in services.Previous studies are mainly based on the traditional regional economic integration theory to analyze the trade effect of FTA,and most of them are centered on the effect of goods trade.Based on the new features and connotations in the development process of FTA deep integration,this paper analyzes the theoretical mechanism of FTA deep integration affecting trade from two dimensions:trade in goods and trade in services,and proposes two different paths of direct and indirect effects,based on the traditional and emerging regional economic integration theories,combined with the new institutional economics and global value chain theories.Third,this paper constructs a system of indicators for measuring the deep integration of China’s foreign FTAs,and provides a continuous variable measure of the level of deep integration of FTAs.The existing measures of deep FTA integration are mainly based on the HMS(2010)method,which is constructed based on the sample of foreign trade agreements signed between the EU and the US before 2010,but the construction of its depth indicators lacks applicability to a wide range of developing members and emerging issues.This paper,however,combines the World Bank’s 2020 in-depth trade agreement database and other internationally recognized evaluation systems,and relies on theories of China’s open development and contracting practices of FTA construction to construct a system of indicators to measure the depth of integration of China’s foreign FTAs in force and further analyze their impact on China’s trade in goods and services.Fourth,this paper complements the limitations of the existing research on deep integration of FTAs,which mainly focuses on developed countries,from the perspective of developing countries.Previous studies on deep FTA integration mainly focus on FTAs concluded by developed countries such as the United States and Europe,and there are certain objective reasons why the research object is constrained,namely,the limited rule discourse of developing countries and the insufficient level and capacity of FTA construction.However,with the accelerated reconstruction of international economic and trade rules in recent years,developing countries actively participate in the deep integration of FTAs,and gradually change from rule acceptors to rule makers.Among them,China’s FTA construction is developing rapidly and has achieved great results.Therefore,this paper takes the FTAs signed by China as the research object and studies the deep integration of FTAs and their trade effects from the perspective of developing countries.Finally,the findings of this paper have some practical implications for the implementation of FTA enhancement strategy in China during the 14th Five-Year Plan period.The existing in-depth studies on FTA rules are mainly fragmented analyses of single areas and individual provisions,lacking systematic analyses starting from the macro development direction of FTA construction.At the same time,there is a time lag in the trade effect of FTA,which suggests us that the long-term tracking research in related fields has certain research value and practical significance.At present,China has identified the FTA upgrading strategy as an important task to build a high level of opening up to the outside world.This study evaluates the current situation of FTA development in China based on the index system of China’s FTA deep integration level,and proposes systematic policy recommendations for the implementation of FTA upgrading strategy and promotion of FTA deep integration level in the 14th Five-Year Plan period.Systematic policy recommendations. |
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