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Trade Creation, Political Sensitivity and Product Exclusions: the Political Economy of Agriculture Protection in China’s FTAs

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  • Lyu, Jianxing
  • Prehn, Soren
  • Zhang, Yanjie
  • Glauben, Thomas
  • Zeng, Yinchu

Abstract

One of the most significant features in Free Trade Agreement (FTA) is that certain products are excluded from tariff concession. Why do some products get more protection in FTAs?In this paper, using the highly disaggregated product-level data in agricultural sector of China’s FTAs, we examined and extended the hypothesis developed by Grossman and Helpman (1995), illustrating the products which are more likely to be excluded in FTAs. Our results suggest that, with the involvement of political costs to incumbent government, products which experience trade creation and have more political sensitivity are more likely to be excluded in FTAs. Moreover, we revealed that the Chinese government tend to achieve different goals through negotiation power, seeking more economic benefits from big-trading partners while giving more concession to small-trading partners.

Suggested Citation

  • Lyu, Jianxing & Prehn, Soren & Zhang, Yanjie & Glauben, Thomas & Zeng, Yinchu, 2017. "Trade Creation, Political Sensitivity and Product Exclusions: the Political Economy of Agriculture Protection in China’s FTAs," 2017 ASAE 9th International Conference, January 11-13, Bangkok, Thailand 284867, Asian Society of Agricultural Economists (ASAE).
    • Handle: RePEc:ags:asae17:284867
    DOI: 10.22004/ag.econ.284867
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    Cited by:

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    2. Lukasz Chmielewski & Piotr Szajner, 2025. "The Impact of Trade Liberalization between the European Union and Mercosur on the EU Sugar Sector," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 44-62.
    3. Bangchu Qiu & Gang Tian & Daoming Wang, 2022. "Empirical Analysis of Sustainable Trade Effects of FTAs Based on Augmented Gravity Model: A Case Study of China," Sustainability, MDPI, vol. 15(1), pages 1-12, December.

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