Research On The Economic Effects Of China-New Zealand Free Trade Agreement

Regional economic cooperation is an important way for a country or a region to embrace economic globalization.China-New Zealand Free Trade Agreement is China’s first free trade agreement signed with developed countries.From the perspective of merchandise trade, the paper first analyzes current situation of China- New Zealand FTA and applies Trade Combination Degree,Revealed Comparative Advantage Index,and Trade Complementarity Degree to judge the trade relationship between China and New Zealand. Then, the paper employs GTAP Model to explore the economic effect of China-New Zealand FTA on China,New Zealand and the rest of the world.The results show that:(1) China-New Zealand FTA effectively promoted the development of bilateral trade in goods. Therefore,China and New Zealand both benefit from the bilateral FTA agreement in the national economy,output and terms of trade.(2)China-New Zealand FTA significantly increased the traditional comparative advantage of New Zealand in international market. Meanwhile,the FTA contributed to the optimization of China’s industrial and export structure and China’s capital and technology-intensive products became more competitive.(3) China- New Zealand FTA promoted the division of labor based on specialization and intra-industry trade between member states.(4) Transportation equipment and automotive products are the potential trade products with China’s export and New Zealand’s import in the future.