ORIGINAL RESEARCH article
Front. Sustain. Food Syst.
Sec. Agricultural and Food Economics
Volume 9 - 2025 | doi: 10.3389/fsufs.2025.1553373
This article is part of the Research TopicEnhancing Food Security and Trade Resilience in Sustainable Agricultural SystemsView all 25 articles
The Impact of the China-Australia Free Trade Agreement on China's Agricultural Imports
Provisionally accepted
- 1School of Economics and Trade, Guangdong University of Foreign Studies, Guangzhou, Guangdong Province, China
- 2Guangdong University of Foreign Studies, Guangzhou, Guangdong Province, China
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China and Australia signed the Free Trade Agreement (ChAFTA) in 2015, which aims to eliminate or reduce trade barriers between countries through tariffs or quotas. Eliminating trade barriers has expanded China's agricultural imports from Australia. ChAFTA will strengthen the trade relationship between the two countries, enabling agricultural product imports to have a trade creation effect. This article systematically evaluates the trade effects of ChAFTA on the scale of China's agricultural product imports based on data from 2000 to 2020. Two statistical methods, Ordinary Least Squares (OLS) and Poisson Pseudo Maximum Likelihood (PPML) are applied to estimate the trade effects of agreements. Empirical studies have shown that ChAFTA has a significant trade creation effect on China's agricultural product imports, while the trade diversion effect is insignificant. When time fixed effects and export country fixed effects are controlled, the PPML method exhibits stronger explanatory power compared to OLS and the estimated trade creation effect is more significant. The empirical research results remain robust even after considering the impact of WTO. There are no endogeneity issues in the results after adding lead variables. By incorporating lagged terms, we find there is no phase-in effect. Empirical research on heterogeneity analysis of agricultural product classification found that ChAFTA had the most significant impact on the import of forest products and aquatic products, followed by textiles and agricultural products.
Keywords: free trade agreements, Agricultural products trade, import trade, Poisson pseudo-maximum likelihood, Trade creation
Received: 30 Dec 2024; Accepted: 12 May 2025.
Copyright: © 2025 Cai, Chen and Zeng. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Xiaohua Zeng, Guangdong University of Foreign Studies, Guangzhou, 510420, Guangdong Province, China
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