Sino-australian Free Trade Area Of ​​china's Agricultural Trade And Measures

Since it entered WTO, China has gradually emphasis on the active role of bilateral Free Trade Agreements (FTA). Following the China-ASEAN FTA establishment, China-Australia FTA is also under negotiation. In recent years, China and Australia have experienced a rapid growth of bilateral trade and a strong mutual economic complementarity, which indicates that the establishment of China-Australia FTA will future enhance the economic development and welfare of both countries, and will play a important strategic significance on both countries. However, the China-Australia FTA negotiation undergoes a very low process because of its complexity. Among all influence factors, whether the establishment of China-Australia FTA will have a tremendous passive impact on China's agriculture and agricultural products is the main controversial and most sensitive issue.China has the largest agricultural population in world. Properly solve the issue of "agriculture, the rural areas and the farmers" is the key mission in china's harmonious socialist society constructions. Compared with Australia, China is obviously at a disadvantage position and a long-term statue in the trade deficit. The establishment of China-Australia FTA will inevitably have a passive impact on China's Agricultural products and trade. But the questions that how much it will impact and which specific kinds of products will be impacted are still ambiguous. Currently, this issue has only been discussed at the macro level by using description and qualitative analysis, and is lack of a systematic and quantitative analysis of scientific prediction and simulation. Thus, the introduction of quantitative model analysis, the in-depth and systematic study on testing the impact of building a free trade zone on China's agricultural products, as well as the corresponding trade policy and agricultural policy, are not only highly related to the process of China-Australian FTA negotiation, but also to the China's national economic security and harmonious society construction.Based on the Computable General Equilibrium (CGE) theory and the Global Trade Analysis Project (GTAP), we build a dynamic simulation on China-Australia FTA. By setting two different Tax-Reduction programs, zero custom tariff and retaining customs tariff in a certain lower extent, we achieved two simulation results, under complete liberalization and partial liberalization, both in a short term and long term. Meanwhile, based on the results above and combined with the features of the China-Australia economy and trade and their trade policies, we compared these two results with the benchmark we set at the beginning respectively, and then systematically analyzed the specific impact of FTA on China's various agricultural outputs. As the results reflected, China's wool, sugar, dairy products and cattle, sheep and their meats have very strong sensitivity on FTA and will experience a significant shock after FTA to some extent. However, grains, cotton, vegetables and fruits are comparative advantage products, and will not only experience much smaller impact, but also enjoy the benefits of FTA. At the same time, this paper advices a series of corresponding policies and recommendations according to the research results. We suggested that firstly China should set out a category of sensitive products, remain certain custom tariff for this category and arrange five to ten years transition period for it; secondly China fully take the comparative advantages, and strive to open up their international markets, enhance the support on those impacted industries; and finally research and develop a system of trade adjustment assistance to improve the FTA trade dispute settlement mechanism.The main innovations of this paper are: 1) the research on the China- Australia FTA are mostly scattered in a variety of macro-description studies. Few scholars specifically systematically study on China's agricultural products in-depth discussion. In this paper, the study fills a gap in the field, the results and conclusion of the study could recommend a very valuable reference for the China-Australia free trade area negotiations; 2) In GTAP model, when applying simulation, most scholars use more static mode, only forecasting short-term analysis of simulation results. In this paper, capital factors are employed in through the dynamic model in order to obtain the short-term and long-term simulation results. 3) In an analysis of a free trade zone, most scholars often ideally simulate the complete liberalization of trade. In this paper, besides the simulation complete trade liberalization, it also designs a partial trade liberalization program for simulation analysis.