The Assessment On The Trade In Servicesof Member States Induced Bythe Establishmentof CAFTA

The China-ASEAN Free Trade Area,funded in 1/1/2010,reduced the average bilateral tariffs to 0.1%,and achieved zero tariff in 90%international trade among member states.Since the establishment of the trade area,the bilateral trade between member states has been developed rapidly.So it is very important to measure the trade effect quantitatively,as the trade area has gained some effects and seek for further development.Based on worldwide literature review,theoretical basis of public economics,method of program evaluation,the trade freedom theory and the institutional distance theory and other theories,we set DID model and PSM-DID model.To emphasizes the importance of the business environment construction in the government performance evaluation.To research how the business environment influence the process,We build up an index system to measure the effect of business environment on the relation between CAFTA and trade in service.This paper is structured as follows.In the first part,we introduce the research background then we review the relevant studies and methods.The second part includes the concept of trade in service and business environment,then we suggest our hypothesis.Next,we describe the relevant variables and research model,then present and analyze the empirical results.The final section summarizes and concludes.What's more,we put forward several suggestions and note the prospects of future research.The research shows that the establishment of the CAFTA significantly enhance the service trade of the member states,in the early years of the CAFTA,the impact reflects in increasing the trading quantities and accumulate the trading partnership.Besides,we found out that trade in service of the states with poor business environment affected by the establishment of the CAFTA more obvious.Countyies with better business environment take the advantage of dig down the partnership between other member countries,use a lower trading cost between member states to reasonable configuration of domestic production resources and then optimize the structure of the development of economic.