Analysis On The Implementation Status And Trade Effect Of China-New Zealand FTA

In the context of global trade negotiations blocked,many countries prefer to set up or join the free trade area(FTA)to reduce barriers to economic and trade activities with other countries and enhance the competitiveness of their industries.Living in the wave of regional economic integration,China has attached great importance to the development of free trade zone strategy.Till now,China has signed 13 free trade agreements.The FTA,which was signed with New Zealand,was the first free trade agreement in China covering a number of other areas including trade in goods,trade in services,investment and intellectual property.The agreement was implemented on 1 October 2008.China-New Zealand FTA stipulates that by 2016 New Zealand canceled all tariffs on Chinese imports,the Chinese side canceled 97.2%of the tariffs on imported products by 2019.This shows that the coverage rate of new FTA is very high,but the utilization rate of Chinese enterprises which is calculated with the amount of the certificate of origin is only 2%.In the current situation of trade and investment between the two sides,we can see that the role of the China-New Zealand FTA on China's exports to New Zealand is not as strong as China's imports from New Zealand.The effect on the two-way FDI traffic promotion is very clear.To take a reasonable science empirical research on the trade effect of FTA,which means the effect of the implementation of China-New Zealand FTA on the bilateral trade volume,is the focus of many scholars and this paper.This paper uses the synthetic control method which is gradually started to be used in the field of foreign policy research to study the impact of the signing of the China-New Zealand FTA on bilateral trade.Specifically,the signing of the China-New Zealand FTA is regarded as a natural experiment,and New Zealand is used as the processing group.A "synthetic control state" is constructed using a suitable linear combination of several other countries as a control group,using the data-driven approach to estimate the weight of the control group,and then comparing "real New Zealand" with "synthetic New Zealand".In this paper,29 countries are selected in consideration of regional concentration and economic disparity.None of these 29 countries signed FTA with China from 2003 to 2013,and the explanatory variable is the total amount of bilateral trade between China and other 30 countries.The selected forecast variables for the 30 countries include the total GDP,per capita income and geographical distance between China.Stata simulation results show that Ireland,Uruguay and Lebanon are positive in the weight of synthetic New Zealand,and the synthetic New Zealand of these three countries are closer to the real New Zealand before the implementation of the policy in 2008.The growth path of the bilateral trade is also very close,indicating that we can take synthetic control method in the study of China and New Zealand policy effects.In comparison with the bilateral trade gap of the real New Zealand and synthetic New Zealand between 2009 and 2013,we can see that synthetic New Zealand's average bilateral trade volume with China is only 50%of real New Zealand's average bilateral trade volume with China.Meanwhile,this paper uses DID model to analyze the trade effect with "Synthetic New Zealand" and"Real New Zealand" as control group and treat group.DID analysis can draw the same conclusion as synthetic control method.It can be concluded that as China and New Zealand FTA signed,a significant increase in trade facilitation occurred between the two countries.As trade barriers have been greatly reduced,the free trade agreement policy on the growth of trade between two countries is very significant.In view of the significant impact of the China-New Zealand FTA on the trade between the two countries and the low utilization rate of FTA in Chinese enterprises,this paper argues that our government should continue to upgrade and deepen the existing free trade agreements.The government departments and chambers of commerce at all levels should strengthen FTA publicity.Meanwhile,the government should strengthen the use of the network platform,so that FTA policy benefits both the country and our people.