Analysis Of Eu-china T Rade Prospects And P Roblems Based On Complementarity And Assessment Of Tariff Reduction Free Trade Assumptions

Based on the development of diplomatic relations and bilateral trade framework,as well as on the promotion and complementarity of their trade,in the last decades,the EU and China have become as one of the world's largest traders,with the possibility of competing internationally with the USA in a medium-long term.Generally,the research on international trade focuses on analyzing large commercial operations and not on how international business operations are carried out from an institutional and regulatory point of view and what trade problems and obstacles international agents face.That is why the purpose of this paper is to analyze the development of the EU-China international trade,as well as to analyze the main trade issues and carry out a prospect analysis of the trade between both two economies in the medium-long term.The thesis consists of three parts.In the first part,based on economic data I carry out an economic overview of the EU and China,their main macroeconomic figures during the last years are analyzed,such as the gross domestic product growth,its decomposition in the three productive sectors and the most important industries,and also perform a comparison of economic growth rates,such as GDP and GDP per capita,as well as a comparison of their population and unemployment rates.On the other hand,I analyze how trade relations have been from 1978 up to the present and the EU-China bilateral trade framework that they have developed through the study of bilateral trade agreements,summits,and initiatives.In the second part,it is analyzed the trade scale and structure.For this,I examine in what position globally the EU and China are,the main reasons why EU have goods trade deficit with China,and what type of trade is carried out between them from three perspectives: by the type of company that exports and imports;by the type of customs regime which the goods are exported and imported;and by the type of product that is exported and imported to China.The results show that it is the machinery,vehicles and other manufactured products that originate the goods trade deficit with China.Besides,in order to analyze the EUChina trade complementarity and assess tariff reduction and free trade assumptions in the medium and long term,I use several types of statistical indexes,such as Trade Intensity Index,Trade Integration Index,Revealed Comparative Advantage Index,Trade Complementarity Index or IntraIndustry Trade Index,and also suppose a case where EU and China adopt a Free Trade Agreement eliminating any type of export and import tariff,so that using the Ordinary Least Squares regression method I can measure how much the bilateral trade could increase.The results show how in both cases,trade tariffs reductions would increase both Chinese exports and imports.However,Chinese exports would increase,while EU exports would do so at a very low rate,further increasing the current goods trade deficit.In the third and last part,I examine the most common international trade problems that occur between both economies,such as the lack of new agreements,the tariff and non-tariff barriers or the cultural differences,and make suggestions to correct them and also to improve international trade relationships.The thesis concludes by discussing some implications of the results for EU-China international trade.