Research On The Trade Implication Of A Potential Free Trade Agreement Between China And Japan

In this context, the paper first theoretical analysis the FTA Effect of trade in services. Trade in services according to the impact effect way could make into the indirect effects of trade in services and direct service trade effects. Indirect effects resulting from the mechanism that trade in goods could promote trade in services were analyzed from both the supply and demand side. The analysing result shows that after the establishment of a free trade area, with reduction of tariffs and non-tariff barriers of trade in goods, the increasing trade in goods is bound to increase the regional services trade. Direct services trade effect is extended from the theory of free trade zone to service sector, introducing of service trade creation and service trade transferration for analysis. It analyzed and summarized the factors affecting the FTA service trade effect:services trade barriers and the cost.Based on the above theoretical analysis, correspondingly, we analyzes the realistic foundation of FTA service trade effect of Sino-Japanese in two ways. On the one hand, by using bilateral trade in services between China and Japan during the year of 2000-2012, direct effect of services trade was analizd by the co-integration test.On the other hand, the direct effect of trade in services are also two ways to analyze, including revealed comparative advantage index, complementation index and service trade barriers comparison between China and Japan.After analyzing the realistic foundation of FTA service trade effect between China and Japan,we use GTAP model to predict the FTA service trade effects of Sino-Japanese. Taking into account that the negotiations of trade in goods is prior to trade in services, the first simulation is to reduce the tariffs of trade in goods to measure the indirect effects,and then reduce of the Sino-Japanese bilateral barriers to services trade by 15% in order to predict the direct effects of trade in services. There are the conclusions:First, to establish Sino-Japanese FTA, with bilateral agricultural sector’s tariffs reducing by 50%, Industrial sector zero tariff, it will promote the service trade import and export in China and Japan, and the promotion effect of Japan is more greater than China.Second, to establish Sino-Japanese FTA, with bilateral agricultural sector’s tariffs reducing by 50%, Industrial sector zero tariff, services sectors by 15% to expand bilateral trade in services between China and Japan, it will incease the bilateral services trade beween Japan and China, and the increasing amount of Japan’s exports to China is greater than China’s exports to Japan. Third, to establish Sino-Japanese FTA, with bilateral agricultural sector’s tariffs reducing by 50%, Industrial sector zero tariff, services sectors by 15%, China’s services trade diversion is bigger than Japan’. Fourth, to establish Sino-Japanese FTA, with bilateral agricultural sector’s tariffs reducing by 50%, Industrial sector zero tariff, services sectors by 15%, it will benifit both Japan and China in services trade, and the net effect on Japan’s trade in services is greater than the net effect on China’s trade in services.At last, according to findings presented, paper proposed some policy suggestions: seizing the opportunity to pick up the Sino-Japanese political relations, multi-channel should be taken to strengthen bilateral services trade cooperation; government should actively play a guiding role to improve service trade legal system; acceleratting the development of new trade in services in order to optimization services between the two countries’ trade structure; seizing the opportunity of cross-border transfer of service industry to positivly develop the service industry; continuing to promote Sino-Japanese FTA process, and exploring new ways for Sino-Japanese cooperation.