Research On Economic Effects Of Establishing The BRICs' Free Trade Area Under The Perspective Of Global Value Chain

With the accelerated development of the world economy,The problems of uneven distribution of benefits,worldwide unemployment and trade protectionism are becoming more and more prominent.Economic globalization has entered the "Crossroads" and the voice of anti-globalization has been rising.A handful of developed economies,led by the United States,have adopted a series of trade protection policies that have greatly increased the uncertainty risk of the international economic order.At the same time,emerging economies,represented by the BRICS countries,have risen rapidly,adapting to the new trend of globalization-regional economic integration,and striving to reshape the new international economic order by strengthening regional cooperation.BRICS leaders met in Xiamen in September 2017 to reach a consensus on deepening economic and trade cooperation.On this basis,China proposed the establishment of the BRICS FTA to deepen the BRICS partnership and better promote the development of the BRICS countries themselves.Based on the above background,this paper takes the BRICS free trade area as the research object to analyzes and discusses the expected economic effects of its establishment.First of all.the trade status of BRICS countries are sorted out,and compared with the developed countries ' FTA,the paper establishes the realistic background of the BRICS countries to strengthen cooperation from the two levels inside and outside.Then,based on the value added,the paper calculates the extent and position of BRICS participating in global value chain,and compares the trade advantages and trade complementarities of BRICS countries,which provides the economic foundation for BRICS countries to establish free trade area.Finally,using the computable general equilibrium model——the Global Trade Analysis model(GTAP),this paper simulates the economic effects of the BRICS countries' establishment of free trade zones.The results show that the BRICS countries have close trade relations and maintain good trade partnership for a long time,and the establishment of the BRICs,FTA accords with the strategic development goal of the free Trade area.Because BRICS countries have different positions in the global value chain,each country has a strong competitive comparative advantage,so the BRICS countries have significant trade complementarities with each other.By reducing tariff barriers and technical barriers to trade,combined with the exception sector program,the GTAP simulation shows that the establishment of the BRICs' FTA will promote the BRICS gross domestic product(gross domestic product,GDP),the growth of welfare and the improvement of terms of trade.At the same time,trade liberalization will also stimulate the BRICS countries to expand exports of comparative advantage industries,but in the short term will have a certain impact on the lack of advantages of the industry,only those sectors as an exception to support the sector can be conducive to the overall growth of the industry.In addition,because of the BRICS countries ' own economic and technological development,it is not advisable for the BRICS countries to cut down the technical trade barriers.