Research On China Effect Of China-EU Free Trade Agreement

The world today is facing a slow and crippled economic growth as well as emerging trade protectionism.Whether China and the European Union(EU),two of the most dominating economies,can finally reach a free trade agreement(FTA)or not,means a lot to both sides and the world at large.An analysis of the motivation and economic reality is conducted,followed by a comparative analysis of existing FTAs and an empirical research on the effect of China-EU FTA on china by using GTAP model.Relevant Challenges and policy suggestions are also carefully and thoroughly addressed at the end of the essay.We reach the conclusion that both EU and China consider it necessary to formulate an FTA,besides,the economy of China can to a large extent complement that of EU.If the China-EU FTA come into effect,China can benefit from a larger GDP growth,a higher level of welfare and a broader trade flux,as well as enhancing the competitiveness of China companies in EU.Though trade balance and trade conditions are not significantly improved.In order to satisfy both sides' expectations,EU and China are supposed to accelerate the China-EU investment agreement negotiation,launch the FTA feasibility research and positively cooperate with different EU members to deal with the divergence on certain terms.What is more important is that China should work out its promise of the new-round opening up.