Effects Of The CAP Reforms And Enlargement On China-EU Agricultural Trade

This thesis attempts to systematically describe the reform measures of EU common agricultural policy and to analysize the characteristics of agricultural trade between China and EU using a series of indicators. The potential effects of the CAP reforms and EU enlargement on bilateral agricultural trade are then assessed qulitatively.It is found that, during 1995-2003, China's competitiveness in products of animal origin, edible vegetables, roots, tubers and tobacco products tended to decline, while the contrary was true for tea, preparations of vegetables, fruits and aquiculture products. Trade Complementarity Index shows that trade complementarity between China and EU tends to enhance, although fluctuations have occured. China and EU have different export structure as revealed by Export Similarity Index. Trade Intensity Index indicates that there exist great potential for further expanding bilateral agricutural trade.It is concluded that the reductions in support prices to major agricultural products and transformation of policy support from coupled direct subsidies to decoupled measures under the 2003 CAP reforms are conducive to leveling the field of competition in world agricultural market, which may allow China to expand agricultural export to EU. On the other hand, EU's new policies place greater emphsis on rural development, the 'cross compliance' criteria on enviromental practices, food safety and animal standards. As a result, China will face more strict requirements imposed by EU for imported agricultural products. China will certainly benefit from acceding to the enlarged EU market. However, it means that the CAP is applied to the new member states, which may provide incentives for raising agricultural production in these countries. Considering the facts that the new EU member states have similar export structure with China and they enjoy the advantages of low labor costs, geographical closeness and preferential access to the old EU market, China will surely face enhanced competition with them.Based on findings from the analysis, the thesis put forwords that China needs to use WTO rules to protect herself and to rationalize agricultural trade through improving quality of the produce, increasing export of high valued products and targetting consumers in order to confront enhanced competition in the EU market.