Empirical Methods And Assessment On The Agricultural Trade Effect Of Free Trade Area

Under the background of economic globalization, multilateral and bilateral trade liberalization process accelerated markedly, in the case of the stalled Doha Round of WTO negotiations, free trade area has been of particular concern. FTA will promote the establishment of regional trade growth, and the resulting gains from trade is to promote the economic integration of the momentum. Establishment of a free trade area will also generate trade creation and trade diversion effect, which is a key indicator of FTA benefits analysis and evaluation of the effect, the effect of which dominant will directly determine its construction valuation, and how to measure the key. To investigate the impact of CAFTA agricultural trade and agriculture from research-based perspective, it will have an important significance for itself and other FTA involved. Therefore, this text analyses and discuss method the FTA calculation methodology from method level, and empirically estimates agricultural trade effects of CAFTA and makes subsequent evaluation based on the empirical level, designed to provide policy information for the future construction of China’s FTA. The text mainly includes following four parts:(1) Build calculation methodology of trade effects. Based on the gravity model and import demand regression models, it discuss trade model-set and variables. For endogeneity, using three fixed effects dimensions (countries, import year and export year) is to control the FTA’s endogeneity, and to solve the bias from basic gravity model for FTA trade effects. The constructed calculation method has three advantages:First, the introduction of trade relations of two countries (cross-section) and annual significance(period) two-way fixed effects, and effectively solve the problem of FTA’s endogeneity; Second, the model can be used for measuring classified products, and is conducive to further reveal the reasons of trade effect produced; Third, to decompose trade creation and trade diversion effect by two-step method, to distinguish the effects of trade flows between the FTA and non-FTA factors factors, and to know empirical measurement is more closely match with theoretical concepts.(2) Measure and evaluate CAFTA’s agricultural trade effects empirically. CAFTA boosts bilateral trade in agricultural products is clear, and trade volume growth is mainly from trade creation. With a clear structural character, the impact of trade liberalization on the domestic industry is limited, it should be viewed rationally. CAFTA makes China and ASEAN both obtained benefits. China as a whole gets larger trade creation effect, but limited impact on the domestic industry, so, from the perspective of resource allocation, it is in favor of China. Meanwhile, ASEAN vs China under CAFTA actual transferring space is relatively limited, and ASEAN makes huge export interests, from the perspective of agricultural trade, it is in favor of ASEAN.(3) Test CAFTA trade relations and consistency of trade effects. China’s agricultural import is highly consistent with ASEAN’s export, while there are some differences between China’s export and ASEAN’s import, so, the bilateral complementary relation is weak. Consistency exists in CAFTA agricultural trade creation and trade diversion effects from the aspects of distribution patterns and trade relations, resulting in the establishment of the China-ASEAN free trade area larger trade creation rather than trade diversion effect, and because the bilateral industrial structure is complementary bring the benefits to the region, while a lower impact on domestic industries and markets outside the region, bilateral cooperation in economic integration is carried out in a mutually beneficial and win-win model.(4) Analyse the impact of CAFTA on China litchi industry based on industry-level. Before and after the entry into force of CAFTA, worries about litchi industrial development from scholars is not fully become a reality, effects of trade liberalization on Litchi industry in China is limited, impact of characteristics of lichee industry development in the country is more obvious.Finally, the full text is summarized, and gives policy recommendations and ideas for further research.