Research On Trade Effects Of Establishing China-Korea Free Trade Zone In China’s Agricultural Products Exported To Korea

With the accelerating process of global economic integration and trade liberalization, establishing free trade zone has become the global trend. As the most economically dynamic countries in the East Asia-Pacific region, establishing China-Korea Free Trade Agreement, and realizing the trade liberalization of agricultural products has a major impact not only for our country, but also for the whole development of East Asia-Pacific region. Establishment of China-Korea FTA will greatly stimulate bilateral trade, because it provides a new opportunity for our agricultural products trade with Korea. But as an important and sensitive area,Korea applies over protection policy for agricultural products; therefore, there will be huge shocks on China’s agricultural products with comparative disadvantage,affecting their supply and demand. In the face of both opportunities and challenges,studying the actual impact of tariff reduction on export of agricultural products can help provide theoretical support for policy-making about foreign trade in agricultural products with the effective use of comparative competitive advantage.Through the literature research method, the related theory frontier were summarized and sorted out. Then, three dimensions are selected as the research object, which is Chinese agricultural export tariffs, export prices and export scale,in this part, partial equilibrium theory was applied to normatively analyze the effects of China-Korea FTA on China’s trade with Korea in agricultural products,which providing a theoretical basis for empirical research. To further investigate the trade effects of the China-Korea FTA on Chinese agricultural products exported to South Korea, linear regression equation and extended gravity model were adopted to verify the effects of tariff concessions on export prices and export volumes.According to the detailed empirical study, the paper drew the following main conclusions: tariffs level and agricultural prices are positively correlated, tariff concessions to some extent will affect the price of Chinese agricultural production,but the tariff is not the only factor in the impact of the price of agricultural products,but the result of various factors combined effect. Tariffs and export scale of Chinese agricultural products is negatively correlated, and the relationship between tariff level and agricultural products trade is deep, tariff rate reduce by 1%, the agricultural products trade will increase by 5.22%,so the regulation of tariffs onagricultural trade between the two sides is strong. Thirdly, according to the analysis of China’s and Korea’s tax concussion pattern, a prediction is conducted about the impact of China-Korea FTA entering into force on agricultural trade. The exports of agricultural products with comparative advantages such as aquatic products and fruits and vegetables will benefit a lot; but Chinese high-value agricultural products and processed agricultural products will receive a huge impact, resulting in a serious deficit situation. Finally, in order to achieve the promotion of China’s agricultural; improve our international competitiveness of agricultural products.This paper provides four policy recommendations for our future agricultural trade policy strategy, which are to improve agricultural ecological environment of our country, to promote the industrial management of agriculture to adjust the agricultural structure, and to establish the risk prevention mechanism.