The Trade Creation Effect of WTO "Trade Facilitation Agreement" on China's Import and Export: Based on Gravity Model and Transnational Panel Data

"WTO trade facilitation agreement", as the only multilateral agreement of the Doha round so far, is reached in early 2015. This agreement plays a positive role in promoting China's trade as China is in New. Normalcy and the present trade facilitation level is not high. Based on theoretical analysis on the agreement's trade creation effects towards China's trade, this paper establishes improved total trade amount, import and export gravity models to make empirical study on panel data of 40 WTO members, covering over 85% of China's trade amount. Then a forecast of China's trade amount is made using the regression results. The study shows: If trading partners' GDP increases by 1%, China's total trade amount and export will increase by 0.587% and 1.378% respectively. If China's trade facilitation gets improved by1%, China's total trade amount, import and export will increase by 4.602%, 4.977% and 3.069% respectively. If other conditions remain unchanged and the agreement is implemented from 2016, in 2020 China's trade amount will be benefited by an additional 30.79%'s growth. The improvement of trade facilitation imposed by "Agreement" can not only produce trade creation effect by reducing trade costs and promoting economic development, but also impose reform to China's port, custom and trade system, which will bring new reform bonus to China.