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An Analysis on Trade of Aquatic Products between Norway and China Based on Bilateral FTA

Author: FengLi
Tutor: LiJingMei
School: Ocean University of China
Course: International Trade
Keywords: China-Norway FTA Aquatic products trade Economic effects
CLC: F323.7
Type: Master's thesis
Year: 2011
Downloads: 63
Quote: 2
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Abstract

In the process of global economic integration, the regional economic integration develops at an incredible rate recently. FTA(Free Trade Area)negotiation between Norway and China was launched in 2008, and the establishment of bilateral FTA will offer a new chance for the two countries to develop the trade cooperation and enhance the level of bilateral economic and trade relation. China and Norway are both the top aquatic products exporters in the world, playing a significant place in the international aquatic industry. Aquatic products trade is an important part of bilateral trade between China and Norway, as well as a contentious aspect in the negotiation. The problems needed to be solved in the article include how about the aquatic products trade complementarity between the two countries, is there potential for further trade, what about the impact to the both countries’aquaculture development, and how to develop their respective advantages to obtain benefits. Hope that the results of the study will offer a certain reference for the establishment of the FTA between China and Norway.This paper is divided into the following four aspects: First, on the basis of the comparative advantage theories, factor endowent theories, the intra-industry trade theories and Customs Union theories in the international economics, the article builds the theoretical frame of China-Norway FTA, which makes essential foreshadowing for the following study. Second, the article does an empirical analysis about the feasibility of the establishment of China-Norway FTA. The paper introduces the development of the trade between China and Norway and the bilateral FTA roundly, and analyses the status of the two countries’aquaculture trade; using various index tools, to do an empirical study about competition and complementarity between the two countries’aquatic products trade from a quantitative point. The results show that the competitiveness of China’s aquatic products presents downtrend, while Norway is improving steadily; aquatic products trade between the two countries are highly complementary, but Norway is more complementary to China. Therefore, it is feasible to establish FTA of aquatic products between China and Norway. Third, the article analyses the economic effects of the two countries’aquatic products trade because of the China-Norway FTA. First of all, the paper estimates the aquatic products trade between China and Norway by using intra-industry trade(IIT) model, discovering that the level of two countries’IIT is relatively low, but the trend continues to strengthen, and the FTA will be effective to develop IIT between the two countries. Then the paper uses results of aquatic products trade Gravity model for reference from HuQiuguang, discovering that China’s economic growth will play an important role to promote Norway’s aquatic products export. In addition, the paper uses the Balassa’s model of trade creation and trade diversion to analyse the economic effects of FTA from a static point, discovering that FTA will generate trade creation effect, then analyses the possible dynamic effects of FTA. At last, the paper analyses the potential aquatic products trade between the two countries by using constant market model, finding that the market expansion and competition effects play a certain role on the development of the countries’trade, and there is a broad space for the two countries to develop aquatic industry. Finally, the paper discusses the favorable and unfavorable factors to establish China-Norway FTA in the political, economic, institutional, and other aspects, and what policy choices China should make, then puts forward some proposal to expand economic and trade cooperation under the framework of FTA.The innovation of this paper is: not only study aquatic products trade volume between China and Norway, but aslo analyse specific aquatic products trade, making analysis more precise; not only study the current competition and complementarity of the two countries’aquatic products, but analyse economic effects and the potential of trade; in research methodology, this paper analyse aquatic products trade relations between China and Norway by using various analysis tools, and study the free trade effects between the two countries by using various models, trying to achieve systematic and comprehensive analysis of aquatic products between the two countries.

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