Study On The Trade Effect Of "China - ASEAN Free Trade Area" (CAFTA) "Early Harvest Plan"

Regional economic integration and trade liberalization based in Free Trade Area (FTA) are becoming important components of foreign trade policy of all countries, partly brought on by stalled WTO negotiations with the development of global economic integration since the1990s. Hence, a wave of building FTA is motivated around the world.However, the market of access and the trade liberalization of areas like agriculture in actual FTA negotiations are hard to achieve, which has become a serious obstacle to the smooth advancement of FTA negotiations owing to the each nation’s common practice of protecting its own agricultural trade. It is well known that the huge debate over market opens of agriculture product apart from some political factors impeded progress of the FTA negotiations among China, Japan and Korea, although the three countries have experienced a large number of talks before2002.On the contrary, China-ASEAN Free Trade Area (CAFTA), as the first and the largest FTA China has participated in until now, has realized the market open of primary products under the Early Harvest Program (EHP). Afterwards, import tariff of600kinds of agricultural are eliminated between China and main members of ASEAN, which resulted in rapid growth of bilateral primary products trade. What’s more, trading partnership between China and ASEAN has been enhanced continually.Then why Early Harvest Program of CAFTA can be performed successfully? What is the trade relationship of agricultural products between China and ASEAN? How does Early Harvest Program affect the agricultural trade of China and ASEAN (trade effect)? Researching on these issues can help us with implementing better institutional arrangement for CAFTA to continuously deepen bilateral economic and trade cooperation. On the other hand, answering these questions correctly has an important referential significance for China’s taking part in FTA negotiations of primary products open system with higher standard.For this purpose, this article will survey agricultural products trade between China and ASEAN before and after establishing CAFTA respectively. Finally, according to relevant conclusions above, this paper will provide the corresponding policy recommendations focusing on the future negotiations of primary products market open with other FTA for China.