Impact Of China-chile Free Trade Agreement On Trade Between The Two Countries

In the wave of global economic integration,each country is exploring and stabilizing its position and level in the world entire economy and market.Since the reform and opening up in 1978,China has been actively participated in international market trade and playing an increasingly important role.From the initial learning from the West,we import advanced products and technologies to attract foreign investment.Then,we go outside to explore,including export products,services,technology,and do foreign investment.In this process,we play the roles from a learner to a mature leader.Along the way,China has accumulated more and more practical experience,including promoting multilateral and bilateral cooperation with other countries,and leading the “One Belt,One Road” regional development strategy,which is promoting China's import and export trade,services and culture and education,etc.further development in deeper levels of areas.China has actively participated in the international division of labor.Establishing free trade zone between two countries now is as an efficient way to promote and expand the bilateral cooperation.The China-Chile Free Trade Agreement was officially signed and implemented on October 1,2006.This is the first free trade agreement signed between China and one of Latin American countries.It is a historical and important of exploration that is how to develop the economy path between China and Latin America.In 2017,Chile and China signed an agreement on upgrading of the FTA,which upgraded the four areas:Market access,Services trade,Origin principles,Technological cooperation.In October 2018,China-Chile Free Trade Zone Upgrade Agreement was approved by the Intellectual Council.It has been 12 years since the establishment of the Free Trade Zone.As the saying goes,"practice is the only criterion for testing truth." We need to use some scientific methods to analyze the trend of the economic and trade exchanges between the two countries in the process of gradually reducing the tariffs for most commodities to zero after establishing the Free Trade Zone.What is the trend of general sales volume? How is the structure of traded goods?What is the proportion of the main classified products? What extent do these classified products affect the trade volume and development direction?Whether there are different economic effects for the free trade zone's two sides,whether there is a trade creation effect,or a trade transfer effect? What are the trade development potentials of Mechanical and electrical products and Agricultural products as the main trade goods? The changes in the welfare levels of two countries are all subjects of our research.Therefore,the paper is divided into five chapters,the first and the second chapter are the theoretical research on the Free Trade Zone and on these bases of different period.The third chapter introduces the general timetable and process of signing the China-Chile Free Trade Agreement,and offer a detailed introduction about the time,plan and mode of tariff reduction and the rules of origin.The fourth chapter analyzes the impact of Trade Agreements on trade between two countries by introducing trade data from 2000 to 2017,comparing the trade scale,the growth rate and trend,and the proportion of total imports and exports.We use the Balassa model to analyze the total trade effect of both parties,we found that: on the Chinese side,China has a trade transfer effect mainly after implementing the China-Chile trade agreement.On the Chilean side,Chile has created a trade creation effect mainly after the implementation of the China-Chile trade agreement.And we also focused on the trade potential analysis of China's Mechanical and Electrical products in Chile,and the trade potential of Chilean agricultural products in China.Finally,we conclude that the China-Chile Free Trade Agreement has had a positive and good impact on trade between two countries.