| After the global economic crisis, international trading system has taken a big change. The progress of Doha Round negotiations led by WTO has been struggling since 2001, on the contrary, Bilateral Free Trade Agreement and Regional Free Trade Agreements is booming, especially in the Asia-Pacific, Europe and North America region. Faced with the current situation of a new pattern of diversification, China continues to promote the development of the multilateral trading system, while also accelerating the implementation of the FTA strategy, in order to seize the opportunities in globalization. China and Australia are both the important countries in the Asia-Pacific region, and in 1972 the two countries formally established diplomatic relations. Since the establishment of diplomatic relations between the two countries, China and Australia are keeping good economic and trade relations for forty years, and the volume of trade between them was increase from 86.55 million dollars in 1972 to 136.8 billion dollars in 2014. Now China is Australia’s largest trading partner and Australia is China’s seventh largest trading partner. The first round of China-Australia bilateral began in April 2005, after 21 rounds of negotiations last for 10 years, finally the much-anticipated China-Australia Free Trade Agreement was formally signed On June 17,2015. The event means that the bilateral trade and economy cooperation between the two countries will reach a higher level. What’s more, China-Australia FTA made a big success in the progress of establishing a comprehensive and high-standard agreement. It not only can promote the economic integration process in the Asia-Pacific region but also can offer some useful references and valuable experiences for further bilateral FTA establishment.This dissertation can be divided into five parts:The first part is introduction, which mainly introduce the background of this study, the research significance, literature review, research and methods, the innovation.The second part is the theoretical foundation of China-Australia FTA, introduced the traditional comparative advantage theory and its new development, static and dynamic effects of the customs union theory, the principle and the development process of GTAP model.The third part is the economic foundation of China-Australia FTA. This chapter collected the goods trade data between China and Australia in last 20 years, and calculated their revealed comparative advantage index and trade integration index. The results showed that the amount of China-Australia trade increases continuously and the dependence of two countries’ trade strengthen continuously. Besides, due to different resource endowments, the two economies are highly complementary.The forth part is the economic effect of China-Australia FTA. In this part, the writer used the global trade analysis model (GTAP) to simulate the changes in GDP, social welfare and trade volume by reducing tariff, and analyzes which industry sectors are benefited, which industry sectors to be impacted.The fifth part elaborates the conclusion, the previous analysis of the bilateral trade between China and Australia and the economic effect of China-Australia FTA are highly summarized. Besides, this part also put forward some policy recommendations for China.By collecting mass data, combine with index analysis and model simulation, it can be concluded that:First, both China and Australia have a strong willingness to establish China-Australia FTA. In addition, since establishment of diplomatic relations between the two countries, China the amount of China-Australia trade increases continuously and the dependence of two countries’trade strengthen continuously. Second, the revealed comparative advantage index of SITCO-8 products indicates that, China has significantly comparative advantage in labor-intensive products represented by textile and clothing industry, and also has advantages in capital-intensive products, such as iron and steel products, electromechanical, chemical products, etc. While Australia has markedly comparative advantage in resource-intensive products. The two countries have a comparative advantage in the industry, the economy is highly complementary, and these characteristics also conspicuously displayed in the merchandise. In addition, the economic complementarity will provide power for the development of future trade between the two countries will provide power for the future bilateral trade between the two countries. Third, the simulation results of GTAP model shows that, the establishment of China-Australian FTA and the tariff reduction will increase their GDP and welfare. Australia’s agricultural sector is the biggest winner, especially dairy and wool industry. China’s agricultural sector will be shocked, but the shock is not great because China set up a transitional period for most of the agricultural products, and sensitive products do not reduce the tariff. For the industrial sector, Australia’s mineral resources is benefited, and the exports of textile and clothing, iron and steel industry, transportation, electronic equipment, etc will increase significantly. What’s more, because of the Australian service industry developed, the cooperation between the two countries is conducive to the progress of China’s service industry. Fourth, China should take measure to reduce its trade deficit with Australia, promote the development of Intra-industry Trade, and protect the vulnerable industries.Compared with the previous literature, this paper uses the latest data and the latest GTAP9.0 model. The current literatures mostly use GTAP6.0 or GTAP7.0 model, the two databases are respectively based on economic figures of 2001 and 2003, the data is too old; Furthermore, in this paper, the simulation results are divided into three major categories:agriculture, industry and service industry, and make a detailed analysis on main industries. There are still some drawbacks in this paper, the paper mainly analyzes the influence of goods trade, and has little research on the service trade and investment. |
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