A Study Of The Economic Effects In Free Trade Zone

Economic globalization and regional economic integration is the world's two major trends of economic development. Now that it was difficult to come to an agreement under the multilateral framework of the Word Trade Organization, countries were actively exploring the Free Trade Zone, a more efficient form of organization. It was proved that the Free Trade Zone was a good way to improve the regional economic integration and economic development. The establishment of the Free Trade Zone may be in accordance with political or security purpose, but the primary goal it should be obtaining a positive economic effects, regional prosperity and high-speed development. Therefore, researchers turned to focus on the study about the economic effect of the regional economic integration. Since 1980s, international direct investment played more and more important role in promoting the development of international and regional economic integration. But most studies on the investment effects were launched from a trade perspective, they regarded the investment effect as a secondary effect and derived effect. Thus, it was impossible for them to give an appropriate interpretation of the investment effect of the Free Trade Zone.Countries take part in the corporation in the Free Trade Zone, but it is the TNC who executive the direct international investment. So the changes of countries caused by the establishment of the Free Trade Zone must via the influence on the decisions of the TNC. By changing these factors, in turn affect investment decisions of TNC, and ultimately affect the flow of multinational investment in the region and investment in distribution. According to Deng Ning's international investment theory, we can improve the interpretation of the investment effect of the Free Trade Zone by study the relationship between the TNC's investment decision and countries' status change on Comparative Advantage.The investment effect of Free Trade Zone will achieved by improving terms of trade and the investment environment, but previous studies neglected the new international direct investment in the region, the uneven distribution among the members caused the dispute. Thus, in order to maintain the stability of the positive investment effect, we should find a good solution to the dispute. Therefore, theoretically analyze the cooperation and conflict of interest under the investment effect of the Free Trade Zone will be practical significance.After several decades of development, NAFTA, as the pioneer of north-south-type Free Trade Zone, has made enormous achievements. Analyzing the overall investment effect of the NAFTA and the investment effect of the member countries will accumulate more experience.