A Research Of The Effect Of China-peru Free Trade Agreement

It has been 8 years since the Free Trade Agreement between China and Peru took effect on march 1st,2010.The goods tariff of origin has a greatly cut between China and Peru compared to the lack of the FTA,Some of them are reduced to zero when the FTA came into force.In order to analyze the effect of the implementation of the FTA,on the one hand,this paper makes a calculation and analysis of the coverage and utilization of the FTA,which the way is used by the ADB.On the other hand,we design a control experiment between China-Pure and China-Ecuador,based on the trade flow from 2006 to 2015.The FTA's coverage rate of China's imports is 94.10%,greater than the coverage rate of China's exports,which is 83.05%.The FTA's utilization rate of China's exports is low overall,only 24.22%.What's more,we find five indicators after calculating the way of tariff concession:Class D means the tariff is not allowed to reduce,Class Ao means the tariff is zero under the condition of the Most-favored-nation treatment,Class A1 means the tariff is reduced to zero once the FTA takes effect,Class BKL means the tariff is reduced to zero before January 1st,2015,Class Else means the tariff is reduced to zero more than 8 years.Through the analysis,it is found that the difference of the FTA coverage and utilization rate of each industry due to the difference of the five indicators above,and it is also found that there is a certain correlation between the coverage rate and the utilization rate:the smaller proportion of D in the tariff reduction of an industry,the higher the coverage rate of the industry.The higher the proportion of A1 in the tariff reduction of an industry,and the smaller the proportion of BKL and Else,then The higher the utilization rate of the industry.The outcome of the empirical research is that:after the FTA took effect,the trade volume of China's imports from Peru is 16.7%higher than that from Ecuador annually,and the trade volume of China's exports to Peru is 11.4%higher than that to Ecuador annually.Thus,it proves the role in trade promotion of China-Peru's FTA.Finally,based on the low utilization rate of the FTA,this paper put forward four suggestions:The first is to enhance the enterprises' innovation ability in technology,in order to produce high value-added products.The second is to strengthen the publicity of the FTA policy in networks,making more middle and small-sized enterprises to use the policy.The third is to establish new think tank,through the production and research cooperation to provide a comprehensive FTA services.The last one is to build a two-way platform between government and company for exchanges about FTA,to guide them in international trade rules'making.