| With the world economic environment and international relations becoming increasingly complex,China continues to seek new ideas in the development and regional economic integration strategy has been put as an essential development strategy.C hina-Korea Free Trade Agreement has been signed in such situation and it has own the largest trade volume,the widest range and the highest degree of freedom for specific country so far.This paper will study the economic effects of China-Korea FTA.First it analyzes the current situation of bilateral trade development between China and Korea,and shows the tightness of trade links between the two countries as well as the foundation and necessity of establishing the FTA.Then after analyzing the main contents of the agreement in the field of trade in goods,trade in services and investment and rules,the paper points out the possible impact of the development of C hina-Korea FTA and its direction of development in the future.Next,it will make a theoretical analysis and empirical analysis on the economic effects of China-Korea FTA by means of C ustoms Union Theory and GTAP model.For the theoretical analysis,the paper will study Trade Diversion Effects,Trade Creation Effects,Scale Economies Effects and Competitive Effects brought by China-Korea FTA.As for empirical analysis,through the GTAP model,the macroeconomic,trade situation and industrial structure will be predicted and compared for the time of Agreement signing for 5 years,10 years and 20 years respectively.Besides using commodity tariff as the impact variable,the technical trade barrier is also used as the variable to further elaborate the economic effects brought by the establishment of C hina-Korea FTA.To draw the conclusion,the establishment of China-Korea FTA can lead the common development and win-win result of the economies for the two countries.It can also provide experience for the establishment of future regional economy integration and international trade system of China. |
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