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A Quantitative Assessment of the Proposed China-Georgia Free Trade Agreement


  • Fuenfzig, Michael


This paper discusses the proposed China-Georgia free trade agreement and provides quantitative estimates of its economic effects. The proposed free trade agreement would more than double trade flows between China and Georgia over a time horizon of ten to fifteen years, and would increase Georgian GDP per capita by about 1.5 percent. Chinese exports to Georgia would increase by about 20 to 30 percent, and Chinese GDP per capita would remain virtually unchanged. While these estimates have to be treated with extreme caution, they should serve as a motivation to continue negotiations on the free trade agreement.

Suggested Citation

  • Fuenfzig, Michael, 2016. "A Quantitative Assessment of the Proposed China-Georgia Free Trade Agreement," MPRA Paper 78040, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:78040

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    References listed on IDEAS

    1. Olena Ivus & Aaron Strong, 2007. "Modeling Approaches to the Analysis of Trade Policy: Computable General Equilibrium and Gravity Models," Chapters, in: William A. Kerr & James D. Gaisford (ed.),Handbook on International Trade Policy, chapter 5, Edward Elgar Publishing.
    2. Shepotylo, Oleksandr, 2010. "A Gravity Model of Net Benefits of EU Membership : The Case of Ukraine," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 25, pages 676-702.
    3. Baier, Scott L. & Bergstrand, Jeffrey H., 2009. "Bonus vetus OLS: A simple method for approximating international trade-cost effects using the gravity equation," Journal of International Economics, Elsevier, vol. 77(1), pages 77-85, February.
    4. Beshkar, Mostafa & Bond, Eric W. & Rho, Youngwoo, 2015. "Tariff binding and overhang: Theory and evidence," Journal of International Economics, Elsevier, vol. 97(1), pages 1-13.
    5. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    6. Piermartini, Roberta & Teh, Robert, 2005. "Demystifying modelling methods for trade policy," WTO Discussion Papers 10, World Trade Organization (WTO), Economic Research and Statistics Division.
    7. Baier, Scott L. & Bergstrand, Jeffrey H., 2007. "Do free trade agreements actually increase members' international trade?," Journal of International Economics, Elsevier, vol. 71(1), pages 72-95, March.
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    Cited by:

    1. Nino Papachashvili & Lela Jamagidze & Nino Melitauri, 2018. "The Analysis of Export Drivers and Impediments Using Extended Gravity Model (The Case of Georgia)," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 69-85, March.

    More about this item


    Free trade agreement; impact assessment; gravity equation;

    JEL classification:

    • F1 - International Economics - - Trade
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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