China's Emerging Regional Trade Policy

The purpose of this paper is to provide a timely review and analysis of China's regional trade agreements, its motivations, and its economic implications for Association of Southeast Asian Nations (ASEAN)-China Free Trade Agreement (ACFTA) member countries and other trading partners. The paper...

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Main Authors:	Zhao, Longyue, Malouche, Mariem, Newfarmer, Richard
Format:	Journal Article
Language:	EN
Published:	2012
Subjects:	Economic Integration F150 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, and Aid P330
Online Access:	http://hdl.handle.net/10986/5041

id	okr-10986-5041
recordtype	oai_dc
spelling	okr-10986-50412021-04-23T14:02:20Z China's Emerging Regional Trade Policy Zhao, Longyue Malouche, Mariem Newfarmer, Richard Economic Integration F150 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, and Aid P330 The purpose of this paper is to provide a timely review and analysis of China's regional trade agreements, its motivations, and its economic implications for Association of Southeast Asian Nations (ASEAN)-China Free Trade Agreement (ACFTA) member countries and other trading partners. The paper uses the SMART model of the World Integrated Trade Solution to quantify the economic implications of the ACFTA on merchandise trade flows among member countries and other trading partners. Then, for comparative purposes, the impact of two possible paths beyond the ACFTA is simulated: an East Asia Free Trade Agreement (EAFTA) and the possible Doha Round multilateral trade liberalization. The paper finds that, if regional and bilateral trade arrangement (RTA) were only concentrated in tariff reductions, the impact on trade flows would be quite limited. China's trade liberalization will bring the similar impacts to ASEAN in three of the scenarios modeled. Japan and Korea would get more market access to China if an EAFTA were to become reality. Only in a multilateral liberalization would all RTA member countries and the rest of the world benefit. Three limitations are noteworthy. First, these types of models capture only static gains from trade. Second, the simulations do not include services liberalization, which could readily provide benefits in several multiples of merchandise trade, and third, it is assumed that full removal of all border barriers at once, in a multilateral scenario, would be of illuminating heuristic value but is unlikely to occur in reality. The paper demonstrates the wisdom of China's simultaneous pursuit of unilateral, regional, and multilateral liberalization--because the wider the trading group involved in the liberalization, the more China and its partners will benefit. The tariff reductions in RTAs will have limited effects on expanding merchandise trade, especially when compared with comprehensive and multilateral liberalization agreements. 2012-03-30T07:30:59Z 2012-03-30T07:30:59Z 2008 Journal Article Journal of Chinese Economic and Foreign Trade Studies 17544408 http://hdl.handle.net/10986/5041 EN http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Journal Article China
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	EN
topic	Economic Integration F150 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, and Aid P330
spellingShingle	Economic Integration F150 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, and Aid P330 Zhao, Longyue Malouche, Mariem Newfarmer, Richard China's Emerging Regional Trade Policy
geographic_facet	China
relation	http://creativecommons.org/licenses/by-nc-nd/3.0/igo
description	The purpose of this paper is to provide a timely review and analysis of China's regional trade agreements, its motivations, and its economic implications for Association of Southeast Asian Nations (ASEAN)-China Free Trade Agreement (ACFTA) member countries and other trading partners. The paper uses the SMART model of the World Integrated Trade Solution to quantify the economic implications of the ACFTA on merchandise trade flows among member countries and other trading partners. Then, for comparative purposes, the impact of two possible paths beyond the ACFTA is simulated: an East Asia Free Trade Agreement (EAFTA) and the possible Doha Round multilateral trade liberalization. The paper finds that, if regional and bilateral trade arrangement (RTA) were only concentrated in tariff reductions, the impact on trade flows would be quite limited. China's trade liberalization will bring the similar impacts to ASEAN in three of the scenarios modeled. Japan and Korea would get more market access to China if an EAFTA were to become reality. Only in a multilateral liberalization would all RTA member countries and the rest of the world benefit. Three limitations are noteworthy. First, these types of models capture only static gains from trade. Second, the simulations do not include services liberalization, which could readily provide benefits in several multiples of merchandise trade, and third, it is assumed that full removal of all border barriers at once, in a multilateral scenario, would be of illuminating heuristic value but is unlikely to occur in reality. The paper demonstrates the wisdom of China's simultaneous pursuit of unilateral, regional, and multilateral liberalization--because the wider the trading group involved in the liberalization, the more China and its partners will benefit. The tariff reductions in RTAs will have limited effects on expanding merchandise trade, especially when compared with comprehensive and multilateral liberalization agreements.
format	Journal Article
author	Zhao, Longyue Malouche, Mariem Newfarmer, Richard
author_facet	Zhao, Longyue Malouche, Mariem Newfarmer, Richard
author_sort	Zhao, Longyue
title	China's Emerging Regional Trade Policy
title_short	China's Emerging Regional Trade Policy
title_full	China's Emerging Regional Trade Policy
title_fullStr	China's Emerging Regional Trade Policy
title_full_unstemmed	China's Emerging Regional Trade Policy
title_sort	china's emerging regional trade policy
publishDate	2012
url	http://hdl.handle.net/10986/5041
_version_	1764393704464842752

China's Emerging Regional Trade Policy

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