Study On The Feasibility And Economic Effect Of Establishing China-Mongolia-Russia Free Trade Area

With the rapid development of productivity in the world and the acceleration of economic globalization,the Free Trade Area(FTA)has gradually become the main means for cooperation and competition among major powers.China,Mongolia and Russia are geographically adjacent and economically complementary.The development strategies of the three countries are highly compatible.In recent years,China’s "One Belt,One Road" strategy,Mongolia’s "Development Road" strategy and Russia’s "Eurasian Economic Union" strategic process have been accelerating,laying a good political and economic foundation for the establishment of China-Mongolia-Russia FTA.Since the 21 st century,the bilateral trade between China,Mongolia and Russia has generally shown an upward trend.China has maintained the status of Mongolia and Russia’s largest trading partner for a long time.At present,the import tariffs between the three countries still have a large room for decline,and the non-tariff barriers are lower than those of Europe and America.The number of FTA that have been in force in China,Mongolia and Russia is 14,1,and 5 respectively.The degree of trade liberalization is relatively low.In addition,the trade between China,Mongolia and Russia still has problems such as imperfect systems,backward infrastructure,inefficient docking of industries,inability of border ports to adapt to current trade development,and China’s threat theory.Therefore,the three countries should actively explore the establishment of Free Trade Area.Based on the economic and trade data of China,Mongolia and Russia from 2001 to 2017,this paper uses the literature data method,quantitative analysis method and empirical analysis method to study the feasibility and economic effects of establishing the China-Mongolia-Russian Free Trade Area.China,Mongolia and Russia,especially Mongolia,have higher foreign trade dependence(TD)and trade combined degree(TCD)between the three countries are greater than 1,indicating that China,Mongolia and Russia have higher economic openness and frequent trades.To a higher degree,by analyzing the revealed comparative advantage index(RCA),China and Mongolia have a vertical division of labor in the trade of resource-intensive,technology-intensive and capital-intensive products,and the industry complements each other.The establishment of China-Mongolian-Russian FTA is highly practical.After the establishment of the China-Mongolia-Russian FTA,the trade creationeffects of the three countries are positive,and the largest country of trade creation effect is China,although the establishment of the FTA will also bring about a certain degree of trade transfer effect.However,the impact of trade transfer effect on member countries is far less than the trade creation effect.It can be proved that with the establishment of China,Mongolia and Russia FTA these three countries will get a lot of economic effects.Finally,this paper uses the GTAP model developed by Purdue University to simulate the economic effects of China-Mongolia-Russian FTA,based on the GTAPAGG9.0 database,set two impact variables of tariff and non-tariff barriers.Through the calculation of the main program of RUNGTAP model.It is verified that with the reduction of tariff and non-tariff barriers by 25%,50%,75% and 100%respectively,the trade environment of China,Mongolia and Russia will be improved,and the import and export volume between member states will be significantly improved,thereby increasing the level of GDP and social welfare,thus proving the establishment of the China-Mongolia FTA is highly feasible and can bring high economic benefits to three countries.Based on the above statistics and empirical research,it proposes feasible proposals for the establishment of the China-Mongolia-Russian Free Trade Area,including reducing tariffs and non-tariff barriers gradually,enhancing political mutual trust,strengthening economic and trade cooperation,promoting industrial upgrading,promoting port trade and cross-border e-commerce,and strengthening humanities exchanges to seek closer quests,in order to seek closer cooperation,seek common strategic interests,broaden cooperation areas and promote the common development of China,Mongolia and Russia.