Agriculture Reference
In-Depth Information
negotiating free trade agreements with Australia and New Zealand, and
has proposed to negotiate FTAs with South Korea and India.
3
Among these
bilateral FTAs, the ASEAN-China Free Trade Agreement (ACFTA) could have
the largest mpact on the economes of Chna and ASEAN.
Agrcultural trade between Chna and ASEAN: complementary or
compettve?
Yang and Chen (see Chapter 12) show that blateral agrcultural trade
between Chna and ASEAN has increased rapidly in recent years, especially
since the negotiation and implementation of the ACFTA and the launch
of the EHP. ASEAN's agricultural exports to China have increased rapidly,
reachng US$5 bllon n 2005. Chna's agrcultural exports to ASEAN have
also increased but at a slower pace, reaching US$2.2 billion in 2005. ASEAN
has been enjoyng an ncreasng surplus wth Chna n agrcultural trade.
The share of exports to Chna n ASEAN's total agrcultural exports has
increased rapidly from 4.8 per cent in 1999 to 10.2 per cent in 2005. China
became the thrd largest export market for ASEAN's agrcultural products
in 2005. With the full implementation of the ACFTA, the share is expected
to rise further. A similar trend has not, however, been witnessed with
respect to Chna's exports to ASEAN.
Yang and Chen find that agricultural trade between China and ASEAN is
more complementary than compettve. Chna can be expected to export
more labour-ntensve agrcultural products to ASEAN and mport more
land-ntensve agrcultural products from ASEAN. As Chna's revealed
comparatve advantage (RCA) n labour-ntensve agrcultural products s
higher than that of ASEAN, it should be possible for China to increase its
exports to ASEAN in these kinds of agricultural products (that is, fruits and
vegetables, processed products, animal products and fish). Compared with
China, ASEAN has an overwhelming comparative advantage in certain land-
intensive agricultural products (such as rubber and palm oil). Therefore,
both sdes wll be better off f they explot ther comparatve advantage
n agrcultural sectors by deeper ntegraton of ther economes.
The agrcultural producton structure n ASEAN has experenced some
adjustments to match Chnese market demand. The trade complementary
ndex (TCI) for ASEAN's exports and Chna's mports n food and lvng
