The Trade Effect Of CAFTA

Observing the orbit of world economic development, trade protectionism was proposed again in the process of globalization. However, Globalization remains an irreversible trend. Since China joined WTO in2001, there has been still many constraints on free trade. Cooperating with ASEAN is China’s best choice. The regional cooperation among FTAs is the beginning of the process of globalization. Following NAFTA and the EU, China is seeking strategic partners in the worldwide actively. China and ASEAN’s bilateral cooperation relationship has been established over20years.The bilateral trade developed rapidly in just one year. At the same time, it proved the correctness of China’s strategic choice.From the China’s Perspective, this article summarized CAFTA’s process of development. Meanwhile, the article summarized the theoretical basis and the causes about CAFTA’s Construction. Through data description and the trade gravity model, the article studied the influencing factors about the overall trade effect. We draw a conclusion that CAFTA is a win-win between china and ASEAN. After the analysis, the paper makes recommendations on the CAFTA’s construction.Among the existing regional cooperative effect on Chinese studies, there are mostly about bilateral trade between China and other countries. Specialized research on CAFTA’s trade effect is rare. With CAFTA’s rapid development in just one year, studies in this area become the hot topic. Except the latest authoritative data, there is new point about the causes of CAFTA’s construction. Besides, the article adds different variables into gravity model of trade and tries to look for more factors which could influence the CAFTA’s overall trade effect.