The Impacts Of RTAs On Trade

Regional Trade Agreements (RTAs) had become an important characteristic in the process of globalization. Since the early 1990s, the number of RTAs had become increasingly prevalent. Since January 8th 2015,604 notifications of RTAs (counting goods, services and accessions separately) had been received by the GATT/WTO. Of these notifications,398 were in force. These WTO figures correspond to 446 physical RTAs (counting goods, services and accessions together), of which 259 were currently in force. As the number of RTAs rapidly increased, the integration of regional economy had been remolding the structure of the world economy.After China signed its first RTA, the Asia-Pacific Trade Agreement (APTA), in 2001, it had already made a great success in regional trade cooperation. Currently, China had 20 RTAs under construction, among which 10 Agreements had been signed and implemented already,7 Agreements were still in negotiation. On March 2015, China issued the Vision and Actions on Jointly Building Silk Road Economic Belt and 21st-Century Maritime Silk Road, aiming at enhancing the economic cooperation with these countries on "the Belt and Road".One of the important feature of China’s recent trade strategy was RTA. In particular RTA could make the trade relation between the members of RTA closer, so as to promote China’s foreign trade in some way. Therefore, what was the influence of China’s RTAs on the export and import? Furthermore, was there any different influence on different technical product? Those would be meaningful questions.This study was based on the background of international economic integration:the stagnation in the multilateral trading system and the prosperity of the regional economic and trade integration. Using the theory of regional economic integration as a guide, using statistical analysis measure and econometric model for empirical means, using the panel data set (SITC Rev3.) of export and import flow between China and the 21 countries which had signed RTAs with China as the sample, we examined the impact of RTAs on the bilateral trade from the aggregate level and disaggregated level to calculate the impact of RTAs on all kinds of imported and exported products. Furthermore, we examined the related factors which might influence the impact of RTAs on the bilateral trade and put forward RTAs’ development strategies to adapt to China’s economic development.Results showed that RTA did have a significant and positive effect on the members’ trade flows, while the effects were different in products with various technical levels: significant effects were found in the trade of resource based products, low technology products and medium technology products. The effect on high technology products was not significant. Besides, the RTAs which signed with other existing RTA organization had a negative effect on the export of resource based products. Besides, the size of trade had a positive correlation with the economic size of the importer and exporter and the common language factor, while it had a negative correlation with the difference of the real per capita GDP between the trade partners and the distance between the two sides. This result was accordance with the recent reviews.In conclusion, the results highlighted the importance of how to choose a suitable regional partners so that the RTA could promote the bilateral trade and achieve a mutual benefit.