A Prospective Study on the Economic Effects of China-GCC FTA - Simulation and Analyses Based on GTAP Model

Yifan Wu

doi:10.62051/ijgem.v4n1.25

Authors

Yifan Wu

DOI:

https://doi.org/10.62051/ijgem.v4n1.25

Keywords:

GTAP, GCC, Tariffs, Technical barriers to trade, Forward-looking analyses

Abstract

In the context of the "Belt and Road" initiative, this paper is based on the China-GCC FTA negotiations, and uses the Global Trade Analysis Model (GTAP) to construct six scenarios of tariff reduction in key sectors and reduction of technical barriers to trade (TBT) between China and the GCC countries, and to assess the impacts of the construction of the FTA on the economies of China and related countries. The paper shows that increased trade liberalization has a positive economic impact on the China-GCC FTA. At the same time, tariff changes in the manufacturing and oil and gas industries dominated the tariff reductions, but the reduction of technical barriers to trade (TBT) has a particularly significant impact compared to tariffs. Bilateral trade will contribute more remarkably to China's continued economic growth than in the GCC countries. Reductions in trade barriers will effectively boost production demand in Chinese and GCC countries, contributing imports, exports and output, which will benefit both economies, specially, China's trade surpluses increasing particularly in various sectors.

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