Author(s)

Yuhao Huang

Corresponding Author

Yuhao Huang

Abstract

This paper mainly explores the impact of CAFTA on bilateral trade by studying the trade effects arising from the establishment of CAFTA and the changes in the bilateral trade structure between China and ASEAN, and proposes countermeasures to further strengthen trade complementarity and to avoid trade structure convergence. Meanwhile, the paper raises the enlightenment on the establishment of China-Japan-Korea Free Trade Area. Firstly, using the RCA Index before the official establishment of CAFTA (2009), the paper thoroughly analyzes the trade effects of CAFTA after its establishment, and finds that a certain degree of basis of trade complementarity exists before the establishment of the CAFTA, especially in resource-intensive and labor-intensive industries, where two sides have a comparative advantage, After that ,more trade creation effects have been brought in this two types of industries by the signing of the service and goods trade agreement. And it also avoid the trade transfer effect t. Secondly, through the Trade Complementarity Index and Trade Similarity Index, the differences between the two sides in the trade structure have been analyzed. It is found that there is a certain degree of trade structure convergence, which increases the competitiveness of both parties. Finally, this paper argues that China and ASEAN should further deepen intra-industry trade through industrial structure upgrading and FDI, to increase the complementarity of the industrial structure of the two sides, in order to avoid the convergence of trade structure, and further expand the trade creation effect, and also believe that China should build a more reasonable trade structure based on their respective comparative advantages, industrial structure and the status of the global value chain division of labor to strengthen the complementarity of trade among the three when it signs a free trade agreement with Japan and Korea.

Keywords

Trade effect, RCA index, Trade structure, Trade similarity index