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Wool Quotas In Sino Australian FTA Negotiations

2014/3/13 10:57:00 33

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recently, China and a href= "http://www.91se91.com/news/index_p.asp" > Australia < /a > are negotiating the establishment of a free trade area. The focus of the negotiations is the quota issue, especially China's import quota for wool products with comparative advantages in Australia.

analysis of this issue requires two aspects: first, the potential impact of China and Australia on the establishment of a free trade area for the whole economy.

Generally speaking, the establishment of a free trade area should be profitable. Otherwise, there is no need to establish. It is necessary to consider whether the proceeds can match the losses. That is to say, what kind of possible losses can China and Australia accept in terms of the expected revenue in the negotiations?

Second, what are the different effects of different quotas on wool and related industries?

Once China's wool import quotas are released, the related industries will be affected positively or negatively. Some industries may benefit, while others may suffer losses.

The assessment of these impacts can be combined with the impact on the overall economy to determine the establishment of the free trade area and the specific economic effects of the quota policy changes, so as to formulate corresponding policies and measures.

from the perspective of the establishment of the free trade area, it can affect the economic development of various regions within various regions through various channels, which requires an economic model that can reflect several economic relations and their mutual influences simultaneously.

The most important thing is to examine the role of tariff reductions in promoting bilateral trade after the establishment of a free trade area, and the influence of trade on the specific industries of countries, and then on labor prices and other factors.

Therefore, it is necessary to consider the corresponding analysis method and analyze the data with appropriate data.

set benchmark plan and policy plan /p >

this paper adopts the global trade analysis model to analyze the possible impact of the change of wool quotas after the establishment of a free trade area between China and Australia.

Global trade analysis model (GTAP) is a computable general equilibrium model among countries and regions in the world developed by Purdue University. It is mainly used to analyze the impact of macroeconomic policies such as trade, resources and environment, domestic subsidies on the economic and trade of different countries in the world.

The GTAP model can simulate the various possible impacts brought by international trade, establish a general equilibrium analysis framework, and flexibly analyze tariff changes, regional trade arrangements (free trade area, customs union, etc.) and the changes in the price and quantity of international trade brought about by the adjustment of trade and subsidy policies, as well as the welfare changes in various regions. It is a powerful analytical tool for trade policy and trade system changes.

Since its launch in 1993, the GTAP model has been widely applied.

the benchmark data of this study are GTAP7 database, including economic operation data and trade flow data in various regions of the world, including trade input data, input and output tables, bilateral physical trade flows, trade in services, tariff and non-tariff barriers, agricultural domestic support data, agricultural export subsidy data and energy data.

based on some related situations in the China Australia Free Trade Area negotiations and the research background of the wool industry, the benchmark plan and policy plan are set up respectively.

the benchmark plan is that there is no free trade area between China and Australia, and the tariff and quota of wool should be adjusted according to the actual situation of China.

The domestic and foreign tariffs on wool quotas and quotas are as follows:

the setting of the policy plan takes account of various situations, including the complete trade liberalization scheme A (all tariff reductions between China and Australia zero) and the relatively conservative trade liberalization programme B (wool continues to implement quota management, but gradually reduces the additional tariff of 10%, 50%, 80% and three tariff situations) and scheme C (instead of using quota external tariff reductions, but increases Australia's wool country quotas 10%, 50%, 100%).

weighing the interests of various aspects /p >

The establishment of free trade area (P) will promote the development of intra regional trade through tariff reduction and so on, so as to promote the production and consumption of various regions, and ultimately enhance the welfare of all countries in the region, raise the income of residents and reduce poverty.

The analysis of the simulation results of the global trade model also starts with the changes in trade volume and trade price, and analyzes the possible impact of the establishment of the free trade area on the trade, price, production and income of various countries in the region.

analysis will first examine the overall impact of the establishment of a free trade area on the world economy, and then analyze the changes in the economic development of each member country, and examine the changes in trade, prices, production and income.

In addition, for the analysis of < a href= "http://www.91se91.com/news/index_s.asp" > trade > /a > quantity and price changes, we should also pay attention to the difference between the analysis and the actual trade data, that is, the problem reflected by the United Nations UNCOMTRADE data.

The United Nations UNCOMTRADE data is a true record of actual trade volume.

According to the analysis of UNCOMTRADE data, the bilateral trade between most Chinese and Australian countries has greatly increased over the past 2000-2009 years, but there have also been some stagnation or even decline in product trade volume.

from the macroeconomic perspective of the whole world, the impact of establishing free trade area between China and Australia is very small. At the same time, the impact of trade creation and trade pfer effect on different macroeconomic indicators is different.

The world trade price index has shown a downward trend in various policy options. The increase in tariff reductions outside the quota or the increase in quotas will lead to an increase in the price of trade.

At the same time, in a comprehensive tariff reduction programme, the increase in world trade volume is greater than 10% of tariff reductions or quotas.

Although prices have declined and trade volume has increased, this increase is mainly due to the increase in trade volume and tariff reductions in the FTA, and the welfare effects of the world need to be examined separately.

The world welfare change figures show that although the establishment of FTA may increase welfare within the region (which will be discussed individually later), the overall welfare is not increased due to the trade diversion effect.

It is worth noting that the welfare loss of policy B and C may be due to the existence of tariff quota system of policy B and C, which makes trade diversion effect greater than trade creation effect.

to all countries, the welfare changes under various policy options are basically damaged except Australia and China.

Australia is beneficiaries under all kinds of policy options. Australia has benefited most from the complete reduction of tariffs under the policy A. Under the different subprogrammes of policy B and C, the welfare tables of Australia are increasing gradually with the increase of tariff reduction or quota increase.

China is the Beneficiary only in the 10% reduction scheme of policy B and C, and China has been damaged in other relatively liberalized policy options.

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New Zealand, South Africa and Uruguay, which have more wool trade with China, are more damaged in the policy A (relative to policy B and C), and because the beneficiaries of the policy B's reduction of additional tariffs are all importing countries, the various regions benefit most from this scheme, and several countries have seen welfare increase under the 80% reduction scheme.

However, under the policy C, the main exporters of wool can only enjoy a small amount of benefits from the export of Australian wool to China, and can not enjoy the welfare of China's quota increase, so the increase in welfare benefits without tariff cuts has increased.

Other countries and regions are not directly affected by the wool trade. The indirect effect is mainly due to the impact of the changes in Sino Australian wool trade on the industry and trade volume of < a target= "_blank" href= "http://www.91se91.com/" > textile < /a > a target= "_blank" href= "http://www.91se91.com /" > clothing > _blank >.

From the point of view of world trade, the wool trade has the biggest impact. The other products are different according to the correlation degree with wool products. The downstream products of the wool industry have a certain positive impact on P.

In the policy A, wool trade increased the most, reaching 32.578%.

The reduction of tariffs and the complete abolition of quotas in China and Australia will play the most important role in promoting the wool trade. Increasing Australian quota alone will also promote wool trade.

This is mainly because Australia's wool exports account for a larger share of world trade, and the increase in China's exports has significantly increased the total volume of world trade.

The increase in trade volume of policy A is greater than that of policy B, indicating that tariff reductions worldwide are still more effective.

In addition, the increase in wool trade also led to an increase in the volume of trade in downstream industries, mainly in textiles and clothing, with an increase of around 0.5%.

from the perspective of world product prices, the main impact is still on wool, and its price has increased considerably.

At the same time, tariffs and tariff quotas cut down the price of downstream industries.

When the policy A completely cut tariffs, the price of wool increased by 6.263%, and the larger the range of policy B and C, the greater the price of wool.

This shows that once the tariff and non-tariff measures of wool trade are weakened, the demand for wool will increase the price of wool.

However, downstream products, such as textiles and clothing, did not appear to have risen in price. Instead, they have declined.

After the establishment of a free trade area between China and Australia, the main advantages of China's textile and garment products were p, while the production of most agricultural products decreased to a certain extent.

In the policy A, compared with the benchmark scheme, the wool production decreased by 23.7585%, while in the policy B and C, except for 10% tariff or quota change effect less than 1%, the rest dropped by more than 1%.

This shows that if the existing tariff quota policy is changed, it may lead to a certain shrinkage of China's wool industry.

However, the textile and garment industry has benefited and output has increased. In all the plans of A, B and C, only two of the 10% schemes do not exceed 1%, and the rest exceed 1%. Considering the huge output of China's products, this is a relatively large beneficiary project.

"P >" from the import point of view, one of the significant features of the policy programme is a large increase in the import of wool.

Corresponding to the decline in production, the increase in imports is also a significant change in policy A, B and C.

Policy A changed the most, imports increased by more than 60%, and the quota increase of 50% and 100% in the policy C also led to an increase of more than 20% in imports, compared with the already large trade volume in wool (nearly 1 billion 800 million dollars in 2008), which is a relatively large increase.

At the same time, the import of animal husbandry products has increased considerably. This is also an advantageous product of Australia, benefiting from the establishment of the free trade area and the increase in China's exports.

After the establishment of a free trade area between China and Australia, because of the above changes in production and trade volume, the factor return rate will also be affected, which will affect the price of P.

on the whole, the land and capital basically showed a downward trend, and the price of labor has an upward trend, but the overall impact is not great.

However, the impact on the elements of the wool industry is very obvious. The price of land, labor and capital has declined considerably, especially for the unskilled labor force (including herdsmen producing wool) engaged in agriculture and animal husbandry production. The price drop in the policy A is even more than 20%.

Considering that most unskilled labors may be poor, the impact of policy settings on the impoverished population has become a matter of great concern.

For example, once a more liberalized trade policy is adopted, we should give some subsidies to the unskilled labor in wool production to help them tide over the difficulties.

based on initiative decision making

The establishment of a free trade area between China and Australia has advantages and disadvantages. It should be prudent to resolve the unfavorable factors and make China win the favorable results in the negotiations in the free trade area. P

In particular, tariff quotas should not be easily liberalized, so that China can take the initiative to establish a free trade area in the future and provide better protection for the domestic wool industry.

in addition, in view of the fact that our country's < a href= "http://www.91se91.com/news/index_f.asp" > wool < /a > has no international comparative advantage in the world, we should intensify our efforts to support the development of the industry so as to better cope with the future international competition.