A Political Economy Analysis To Bilateral Free Trade Area "Hot"

When multilateral trade negotiations reach an impasse in WTO frameworks, more and more countries are being fascinated at the establishment of bilateral free trade area, as a period of two-way trade is coming. This thesis, the theoretical model of which is in the basis of cournot equilibrium, illustrates that big countries, active in building up bilateral free trade zone, is for the sake of more weighted words in multilateral negotiations in the future, that is, to increase chips in multilateral frameworks. Then, the use of trade gravity model, linking up with American statistics related, plays an important part in testing and verifying the correctness of the theoretical model. A conclusion can be obtained from theoretical and empirical analysis: the future multilateral negotiations will be battles among a few of interest groups. Therefore, China, as a big county, should make adequate arrangements in minds, and at the same time catch the chances in making strategy arrangement all over the word.This paper also indicates that the establishment of bilateral free trade areas is helpful to economic globalization. Therefore, author is optimistic about the bilateral free trade area hot.In order to describe the complex process of the bilateral free trade area negotiations, the paper constructs a model named negotiation game model, according to the principle of Nash Equilibrium which is used for game of two persons. On purpose of further discussion of negotiation model which is built in the above, this paper chooses Japan-Singapore bilateral free trade area as a typical case. This section wants to give a theoretical support about how to choose an appropriate partner as a counterpart in bilateral free trade area negotiations.At last, there is a special analysis aiming at China. On the basis of comparison between security dilemma and harmonious development, author expects China to adopt policy of harmonious development. And a number of candidate countries are arranged for the next stage of bilateral free trade area establishment of China. This thesis also gives some suggestions for Chinese government in the future negotiations of bilateral free trade areas.