Effect of China—Australia free tradeagreement （FTA） on China

李圣杰

[Abstrac]t： On December 20， 2015， the China-Australia free trade agreement （FTA） took effect， which means that the development of China-Australia trade relationship opened a new era. Accordingly， this paper from the perspective of macroeconomic and various industries， and from primary industry， secondary industry and tertiary industry to analyze the effect of China-Australia FTA.

[Key words]： China-Australia FTA

1. Introduction

According to WTO statistics in 2012， the regional trade arrangements recorded in WTO is 511 which there are 319 in force. On November17， 2014， after negotiating the China-Australia trade and economic relations entered into a new stage， and formed the closer trade partnership in comprehensive aspects. The organization of the paper as follows： Section 2 provides a survey of what free trade zone is considered to be and literature review； Section 3 represents history background between China and Australia and the situation of China-Australia trade； Section 4 shows us the contents of China-Australia FTA； Section 5 analyzes the effect of China-Australia FTA on China from primary， secondary and tertiary industry； Section 6 gives concluding remarks.

2. The definition of free trade zone and literature review

（1） The definition of free trade zone

Free trade zone is one of the main forms of regional economic integration， which refers to two or more countries through the conclusion of a treaty to eliminate tariff barriers and quantitative restrictions. The target of free trade zone among members is to abolish tariffs and other trade barriers， to achieve complete freedom of movement within the region， but each member state still retains the original barriers against non-member countries.

（2）Literature review

Gilbert and Wahl （2001） use GTAP model to assess the welfare effects of three different regional trade liberalization brings to different countries. Zhou shudong （2006） uses GTAP model and find China-Australia trade liberalization is beneficial to improve bilateral trade and increase the volume of Chinas export. Yang jun （2005） also uses GTAP model and find China and Australia exits economic interaction and China-Australia trade liberalization is useful to improve the welfare. These studies provide some references to study the effect of China-Australia FTA from different perspectives.

3.The situation of China-Australia trade

China and Australia established diplomatic relations in 1972. Especially， after entering the 21st century， China and Australia signed a "framework trade between China and Australia" to promote economic and trade cooperation.