The Formation of AFTA and Trade Diversion: Evidence from China’s Agricultural Exports

다국어 초록 (Multilingual Abstract)

This study analyzes the impacts of the formation of AFTA (ASEAN Free Trade Agreement) on China’s agricultural exports. The Hausman-Taylor analysis is applied to panel data collected from China and its 68 trading partners from 1993–2012. Our major findings areas follows. First, the discrimination in tariffs imposed by AFTA diverts trade in agricultural products from China toward AFTA’s member countries. Second, at the sectoral level, the trade diversion effects of AFTA’s formation on China’s exports are significant in the case of beverage and tobacco industries. AFTA and China need to focus more on diversifying and differentiating their farming products. To gain better access to AFTA’s market, more investment in research and development activities is recommended as a cure for Chinese farmers. Moreover, this study implies that more efforts in reducing tariff and non-tariff barriers to further liberalize trade between China and AFTA could enhance their bilateral trade flows.

참고문헌 (Reference)

1 Falvey, Rood, "Trade, Imitative Ability and Intellectual Property Rights" 145 : 373-404, 2009

2 Susanto, Dwi, "Trade Creation and Trade Diversion in the North American Free Trade Agreement: The Case of the Agricultural Sector" 39 (39): 121-134, 2007

3 Clausing, Kimberly A., "Trade Creation and Trade Diversion in the Canada-United States Free Trade Agreement" 34 (34): 677-696, 2010

4 E. M. Ekanayake, "Trade Blocks and the Gravity Model: A Study of Economic Integration among Asian Developing Countries" 경제통합연구소 25 (25): 627-643, 2010

5 Frankel, Jeffrey A., "The Regionalization of the World Economy" University of Chicago Press 91-120, 1998

6 Ethier, Wilfred J., "The New Regionalism" 108 (108): 1149-1161, 1998

7 Bhagwati, Jagdish, "The Dangerous Drift to Preferential Trade Agreements" American Enterprise Institute 1-18, 1995

8 Viner, Jacob, "The Customs Union Issue" Carnegie Endowment for International Peace 1950

9 Alan K. Fox, "Textile and Apparel Barriers and Rules of Origin: What’s Left to Gain after the Agreement on Textiles and Clothing?" 경제통합연구소 23 (23): 656-684, 2008

10 Frankel, Jeffrey A., "Regionalism and Rivalry: Japan and the United States in Pacific Asia" University of Chicago Press 1993

11 Koo, Won W., "Regional Preferential Trade Agreements: Trade Creation and Diversion Effects" 28 (28): 408-415, 2006

12 Medvedev, Denis, "Preferential Trade Agreements and their Role in World Trade" 146 (146): 199-222, 2010

13 Hausman, Jerry, "Panel Data and Unobservable Individual Effects" 49 (49): 1377-1398, 1981

14 Romalis, John, "NAFTA’s and CUSFTA’s Impact on International Trade" 89 : 416-435, 2007

15 Hassan, Kabir M., "Is SAARC a Viable Economic Block? Evidence from Gravity Model" 12 : 263-290, 2001

16 Oguledo, Victor I., "Gravity Model: A Reformulation and an Application to Discriminatory Trade Arrangements" 26 : 107-120, 1994

17 Krueger, Anne O., "Free Trade Agreements versus Custom Unions" 54 : 169-187, 1997

18 de Paz, "Endogenous Preferential Trade Agreements" 14 (14): 419-431, 1999

19 Tang, Donny, "Economic Integration among the Asia-Pacific Economic Cooperation Countries: Linder Effect on Developed and Developing Countries(1985-1999)" 17 (17): 19-49, 2003

20 Baltagi, Badi H., "Econometric Analysis of Panel Data" John Wiley and Sons 2005

21 Sohn, Chan-Hyun, "Does the Gravity Model Explain South Korea’s Trade Flows?" 56 (56): 417-430, 2005

22 Craig R. MacPhee, "Consequence of Regional Trade Agreements to Developing Countries" 경제통합연구소 29 (29): 64-94, 2014

23 Jugurnath, Bhavish, "Asia/Pacific Regional Trade Agreements: An Empirical Study" 18 : 974-987, 2007

24 Clarete, Ramon L., "Asia Regionalism and Its Effects on Trade in the 1980s and 1990s" 14 (14): 91-129, 2003

25 Levy, Philip I., "A Political-Economic Analysis of Free Trade Agreements" 87 (87): 506-519, 1997