Implementing Free Trade Area Strategy and Expanding Export

Wuxi New District Administrative Committee

Wuxi Entry-Exit Inspection And Quarantine Bureau

Wuxi New District Association of Foreign-invested Enterprises

May 2009

The implementation of Free Trade Area strategy not only meets the needs of China to strengthen bilateral relationships with other countries, particularly developing countries, but also meets the needs of enterprises to explore new foreign markets. It is of great importance to implement the strategy under the tough condition when the western market is suffering most.

catalogue

一、 Brief on Regional Economic Cooperation

二、 Free Trade Area China Has Established

三、 Free Trade Area Under Discussion

四、 Research on Free Trade Area and Export Market Diversification

一、 Brief on Regional Economic Cooperation

Regional Economic Cooperation

Generally, Regional Economic Cooperation refers to economic cooperation between governments belonging to the same region. APEC (Asia-Pacific Economic Cooperation) is a regional economic cooperation in broad sense which has no practical constraint.

In narrow sense, regional economic cooperation should be established by signing agreements by two or more countries, regions, or separate customs territory. It’s worth noting that regional economic and trade arrangement has gone beyond the border of region, the typical trans-continental agreement is EU-Mexico Free Trade Agreement reached last year.

1 、 Modes of Regional Economic Cooperation: Preferential Trade Arrangement (PTA), Free Trade Area (FTA), Customs Union, Common Market, Economic Union

（ 1 ） Preferential Trade Arrangement (PTA) is a trading bloc which gives preferential access to certain products from the participating countries. This is done by reducing tariffs, but not by abolishing them completely. A PTA can be established through a trade pact. It is the first stage of economic integration. Asia Pacific Trade Agreement in which China participates is a form of it.

（ 2 ） Free trade area is a designated group of countries that have agreed to eliminate tariffs, quotas and preferences on most (if not all) goods and services traded between them. It can be considered the second stage of economic integration. Countries choose this kind of economic integration form if their economical structures are complementary. Members of a free trade area do not have the same policies with respect to non-members, meaning different quotas and customs. FTA covers all the customs territory of its members. By now, China has signed FTA with counties as ASEAN, Pakistan, Chile, and New Zealand. Tariff territory of China (excluding Hongkong, Macao, and Taiwan) and that of other participant members have been covered in FTA.