Analysis of trade creation effect in China-Asean free trade area

The static effect of regional economic integration is mainly manifested in trade creation and diversion effect. Whether the setup of China-Asean free trade area can ensure multiply successes and facilitate the sharing of the benefits brought about by optimized resource configuration on the part of its member countries is determined by what trade effects are produced. The current status of trade barriers between the member countries, the tariff elimination process, the trade relationship features, the production cost, the trade structure and the third market difference are the principal factors influencing the trade effect in different ways. Despite the gain or loss in benefits induced by trade fluctuations, the trade creation occupies a leading position on whole.