On the Impact of the ASEAN Free Trade Agreement on Intermediate and Final Goods Trade in its Free Trade Zone

Abstract

 Against the background of economic globalization and the suspension of the WTO Doha Round, regional free trade area cooperation has flourished all over the world. This paper mainly examines the difference between the impact of FTAs on the trade of intermediate and final products, and explores the impact of free trade agreements on the formation of regional trade networks. Taking the China-ASEAN Free Trade Area (CAFTA) in the East Asian production network as the research object, this paper uses the gravitational model and introduces the dummy variable CAFTA to establish a regression model, and concludes that CAFTA will promote the development of intermediate goods trade and final goods trade, but the impact on the former is greater, mainly because the reduction of trade barriers has an amplifying effect on intermediate goods trade. The research conclusion provides a theoretical basis for China to further promote the construction of free trade areas.