Study On Sino-Australia Agricultural Products Trade Relationship On The Basis Of ACFTA

Since the early 1990s, globalization entered a brand new era, and one of the impressive phenomenons is the accelerated development of regional integration. As a supplement to the multilateral negotiation, bilateral trade agreements are significant for the realization of free trade. Under such circumstances, most developing countries are seeking for broader market by signing preferential regional agreements with other economies. Among the merging FTAs, those agreements signed between southern and northern countries stand out with the vertical labor division and the complementarities between the members. It could solve the problems caused by surplus capitals and narrowed market in developed countries. At the same time, it helps developing countries dealing with employment and economic growth issues. China realized multilateral liberalization framework under the GATT/WTO is not sufficient in removing tariffs. Bilateral trade agreements have become an important way for China to expand exports and avoid artificial trade barriers. ACFTA is a break through for China in the sense of establishing FTAs with developed countries. And the critical part in the negotiations is the agricultural trade agreement. This paper analyzes the current Sino-Australia agricultural products trade and the bilateral relationship under the ACFTA background.The introduction part concludes some detailed background information and some relevant questions. Also it gave a general idea about the objective, scale, content and framework of the paper. The relevant theory is summarized and shows the cut in point of the study.The main part of the paper is based on the current Sino-Australia agricultural trade, and uses empirical approach to analyze trade structure between the two countries. The intra-industry trade index accounted in this section shows the trade pattern. Meanwhile, use Product and Market Similarity Index, IT, RTA and OBC to analyze the general agricultural trade relationship. Also, the paper lists the competitive and complementary products in bilateral trade.The study shows that the exports from Australia to China could basically satisfy the demand of China's domestic market. ACFTA will have a positive impact on most agricultural products, while some products made in China might suffer a blow. China has a complemented relationship with Australia. From my perspective, because of such a relationship, the tariff cut could give rise to trade creation and will further promote bilateral trade ties. It could also rearrange industry structure in both countries and deepen labor division and coordination according to market demand and relative advantages. Besides, trade cooperation between China and Australia will make the manufacture process more economical.