Economic Effects Analysis Of Establishing China-japan-korea Free Trade Area Under RCEP

With the vigorous development of economic globalization,countries have gradually formed more dependent economic and trade cooperation relations.A large number of higher-level,more strategic and targeted integration organizations came into being all over the world.In recent years,the major economies in East Asia have been committed to actively negotiating free trade agreements.Multiple FTAs overlap each other in the region,but the complete unification of the region and the liberalization of trade have been delayed.RCEP is initiated by 10 ASEAN countries.By integrating its five "10 + 1" free trade agreements with China,Japan,South Korea,Australia and New Zealand,RCEP reconstructs a "10 + 5" model to establish new economic ties.Compared with other running free trade agreements in the world,RCEP is more inclusive and covers a number of new topics,which is of great benefit to promoting mutual trade and investment in the region,especially in terms of non-tariff barriers,and has achieved remarkable results in expanding the exports of Member States.RCEP has a far-reaching impact on China,Japan and South Korea,both Member States.The agreement fills the gap of reciprocal agreement between China,Japan and South Korea,and provides a good experience template for China-Japan-Korea FTA with slow negotiation process.In this context,China,Japan and South Korea can consider further refining and deepening the framework of RCEP agreement,build a higher-level trade mechanism by learning from the successful experience of RCEP negotiation,and actively promote the early establishment of China-Japan-Korea FTA.Firstly,this paper discusses the three theoretical bases,including customs union theory,big market theory and agreed international division of labor theory.Then,from the perspective of trade and investment,clarify the practical basis for the establishment of trilateral free trade area under the framework of RCEP agreement between China,Japan and South Korea,and find that China,Japan and South Korea still have the potential to further deepen cooperation;due to explores the advantages and difficulties of the three countries in establishing the FTA,finds that the three countries have significant advantages of close trade ties,high industrial relevance and clear division of labor in the value chain,but the protection of sensitive industries,restrictions on the investment environment and the continuous intervention of the United States are still the main factors hindering the establishment of the trilateral FTA.After clarifying the advantages and difficulties,the qualitative analysis is carried out according to the framework of RCEP agreement.It is found that important measures such as equalization of technical standards,facilitation of customs clearance,regional accumulation rules and investment liberalization have a positive impact on the development of FTA between China,Japan and South Korea,and will have positive economic effects on the three countries;The GTAP simulation method is used to carry out quantitative analysis to simulate the changes of economic effects of member countries under different establishment scenarios of China,Japan and South Korea FTA and RCEP.The results show that with the support of RCEP,when tariff and non-tariff barriers reach the maximum reduction,the real GDP increment of China,Japan and South Korea is 0.60%,2.60% and 1.97%;The increment of social welfare in China was US $33.173 billion,that in Japan was US $35.107 billion and that in South Korea was US $13.217 billion;The import increment of the three countries was 2.77%,4.45% and 2.13% respectively,and the export increment was2.10%,0.92% and 1.10% respectively.It is further concluded that RCEP can indeed drive the economic growth and social welfare level of the three countries,but the trade effect after the establishment of China Japan South Korea FTA can not be replaced by RCEP.Combining qualitative and quantitative analysis conclusions find that RCEP can drive the economic growth and social welfare level of the three countries,but after the establishment of China-Japan-Korea FTA,the trade effect of cannot be replaced by RCEP.Combined with the results of qualitative and quantitative analysis,in view of how to promote the construction process of ChinaJapan-Korea FTA and China’s future strategic choice,it is considered that the three countries should actively strive for a greater breakthrough in non-tariff barriers.At the same time,China should firmly grasp the new mode of supply-side structural reform provided by RCEP,and accelerate the application of new technologies and the upgrading of industrial structure in China.