Research On Economies Of Scale Of Free Trade Area

Since the late 90s of the 20th century, a new round regainoal economic integration wave the world. As exemplary role in Europe and the United States, the developing countries through the two ways of South-South cooperation and North-South cooperation to actively participate in bilateral, multilateral and regional cooperation. It forms a global network of FTA (Free Trade Area)development. Recent theoretical study of regional economic integration is the economies of scale and improved terms of trade effect theory. Economies of scale, imperfect competition, product differentiation has leapt to the dominant factor in modern trade patterns. In the region, the role of economies of scale even exceeds the conventional comparative advantage. As economic integration affect long-term economic growth through the size effect of Increasing returns to scale sector. So the study of the economies of scale effects for Free Trade Area will do benefit for regional domestic economy healthy and stable development.In this context, the paper starts from the perspective offree trade areas and explores economies of scale. First of all, sums up the economies of scale classification system to determine the point of this study. In the theoretical analysis, analysis a general mechanism of economies of scale created by the free trade area, and in-depth analysis of the economies of scale generated by the free trade zone and other effects. Since then, the empirical part, the paper takes China-ASEAN Free Trade Area (CAFTA) for example, using the comparative analysis of China-ASEAN Free Trade Area to prove the existence of economies of scale and economies of scale. At the end hope to enrich and develop other free trade zone development, especially for China's active participation in free trade zones to promote economic development, provide useful lessons and reference.