The Trade Effect Of China, Japan And South Korea Free Trade Area And Impact Analysis

Economic globalization and regional economic integration is a hot topic in the field of today’s world economy. European Union (EU) and North American Free Trade Area (NAFTA),which are successful examples for countries all over the world, have made people realize the importance of international cooperation. These two regional economic cooperation organizations also let each participating country really enjoy the wide variety of economic benefits and political interests. In addition, due to the global financial and economic crisis, it is difficult for a single country to fight against the strong financial storm. European Union and North American Free Trade Area have offered good reference for other countries in the world. In fact, so far, most of the developed countries and the development countries have joined one or more of the regional economic cooperation organizations, and are enjoying economical and political interests brought by the regional economic cooperation organization. Joining the regional economic cooperation organization means a bigger market and more efficient allocation of resources, and can promote the country’s strength and place in the world.China, Japan and South Korea are the most likely to combine and establish a free trade zone in east Asia. This point can be proved by the adjacent geographical location, similar cultural background, Complementary economic structures among the three countries. If China, Japan and South Korea free trade area were built, it will become a large market with more than 1.5 billion people. The first round of talks about China, Japan and South Korea free trade area was organized on March 26,2013, held in Seoul, South Korea. The recent negotiation was the fourth round of talks, held in Seoul, South Korea on March 4,2014. China, Japan and South Korea free trade area once established, both for the whole of China’s foreign trade and foreign trade in the domestic each big provinces, will be a blessedness and opportunity.This paper starts with introducing the present trade situation and the complementary economic structures among China, Japan and South Korea. All of these have provided the foundation for the trade area. Secondly, the paper carries out specific analysis on the trade effect of China, Japan and South Korea free trade area, including the trade creation effect, the scale economy effect, the pro-competitive effect, etc. Thirdly, choose Shandong province as the research object, select trade size and trade structure as the research perspectives, then analyze the affect on the foreign trade in Shandong province brought by China, Japan and South Korea free trade area. Under the trade structure, the author subdivides it into two aspects, including the commodity structure and the way of trade structure. Finally, this paper summarizes the research contents, and aims at how to help Shandong province meet the opportunities and accept the challenges brought by China, Japan and South Korea free trade area and how to get better trade benefits with Japan and South Korea. The paper puts forward constructive countermeasures.