Table of Content

Summary

A. The current situation of RTAs

B. Critical issues in establishing RTAs

I. The positive and negative impacts of the regional integration

II. The variety of the categories and forms of RTAs

III. The content of RTAs is expanding

IV. The enforcement of RTAs is strengthened

V. The internal stimulus for the development of RTAs

1. Economic interest

2. Political and security needs

C. Chinas practice in establishing RTAs

I. The efforts of China to participate RTAs

II. The evaluation on the Chinas practice in RTAs

1. The regional integration institutions China joined are loose-structured, lack of binding force and poor in enforcement.

2. The RTAs joined by China remain in low level integration, and absence of the cooperation with powerful economies.

3. The RTAs promoted by China have been attached too many political factors, and easily to result in political distrust.

4. Chinas RTAs practice is lack of long-term plan, and without a sustainable strategy.

D. Major issues in the road map establishing Chinas RTA strategy

I. Legal basis for RTAs: the conflict between the regionalism and multilateralism, and control the negative aspects of RTAs to the WTO multilateral trading system.

II. The overall strategy: a multi-level step-by-step approach to promote RTAs

III. Choice of interests: the combination of political and economic interests

IV. Level design: the importance of inter-nation or inter-continent RTAs

V. Direction arrangement: the expansion of the contents of RTAs and the deepening of regional integration

VI. Step-by-step approach: the construction of East Asian Community which has the potential to become a world economic pole

Summary

Regional Trade Arrangements (RTAs) have proliferated during the last fifty years. Especially when the negotiation under the multilateral trade arrangement got in a stalk in recent years, the RTAs have been attached great importance by countries as an instrument to regional integration. In these years, along with the members of RTAs increased considerably, the instruments and formalities of RTAs have been varied, and scope of RTAs has been expanded. Driven by both economic and politic factors, the development of RTAs has showed a tendency from institutional-building to institutional-efficiency. Thus they have dual influence on multilateral trade regime, which may includes both promotion and derogation. With regards to China, it has changed its traditional view to engaged positively in the building its own RTAs. Currently, on the one hand, China is devoted to promoting regional integration through the important international organization; on the other hand, it makes great effort to develop bilateral and multilateral trade agreements, and promote intra-regional trade liberalization through these trade regimes. In addition, China intends to strengthen the regional and sub-regional economic cooperation gradually. However, generally speaking, the regional institutions China has involved are characterized by loose structure, weak binding force and poor enforcement. The RTAs are operated in low level, lack of cooperation with the powerful economies. Besides, the current Chinas RTAs were attached too many political elements, which may lead to political conflicts. In sum, Chinas RTA practice was lack of a long-term plan, and without sustainable strategies. Facing the competition form the neighboring countries, China should construct an appropriate strategy on RTAs as soon as possible. Without the derogation of multilateral trade agreement, the RTA strategy should be led by national strategy interest, contain the involvement of various levels of trade agreements, enlarge the scope of regional trade agreements, and expand the partners for cooperation. #p#分页标题#e#

A. The current situation of RTAs

Since the existence of the WTO regime, the number of RTAs has increased considerably. Within the WTO regime, there is no uniform definition for RTAs. The broad consensus on this issue is that, RTAs is the inter-regional trade liberalization or facilitation arrangements promoted by governments, in the form of free trade area or trade union.

In practice, there are various kinds of arrangements for RTAs, from the simple tariff preference to the comprehensive economic integration. From the levels of integration, there are five categories: preferential trade arrangement, free trade area, tariff union, common market and economic union. The preferential trade arrangement is to provide some trade partners the partial preferential treatments. It is the most loose-structured RTA, including the unilateral arrangement (such as GSP system) and the bilateral arrangement. When partners of preferential trade arrangements abolished all the tariff and quantitative restrictions on trade between them, a free trade area comes to existence. When the members of a free trade area eliminated all the restrictions to trade between them, and established the common restrictions on trade to outsiders, they constitute a tariff union. If this arrangement goes beyond the field of trade and aims to the free flows of labor and capital, it becomes a common market. The further step is to establish the economic union, which requires the uniform economic policies of its members, including the tax policy and currency policy. It should be noted that sometimes the RTAs in practice are not inconsistent with their definitions in theory. For example, the NAFTA (North American Free Trade Area) and AFTA (ASEAN Free Trade Area) all named by FTA (free trade area), however, their members do not seek to eliminate all the barriers to trade among them. The EEC (European Economic Community) named itself common market” long before the implementation of integration plan on trade and capital. The most typical example is the CACM (Central American Common Market), which even does not reach the level of a free trade area.

After the founding of GATT, the regional integration is in rapid development along with the multilateral trading system. In the last fifty years, the number of RTAs has grown substantially. The RTAs interests more and more participants, with a fundamental expansion in the form and content. Furthermore, the overlapping pattern of free trade agreement is taking shape.The three pillars of RTAs, which are in Europe, America and Southeast Asia, have shown the parallel developing trend.In America, the main RTAs include the NAFTA, the Mexico-EU FTA, Canada-Chile FTA, CARICOM-Dominica-Cuba FTA, CACM, MERCOUSUR, Mexico-Bolivia FTA, Mexico-Costarica FTA and so forth. RTAs have also extended beyond this region. For example, US, Chile and Korea, Canada and EFTA, Canada and Singapore, Mexico and MERCOSUR are under the negotiation of RTAs. The negotiation on FTAA (Free Trade Area of the Americas) is till underway. In Europe, the current RTAs include EEC, EFTA (European Free Trade Area), CEFTA (Central European Free Trade Area), BAFTA (Baltic Free Trade Area), and the bilateral trade agreement between the EU members and the Central East Europe countries. In Asia, the ASEAN is taking the lead of building FTAs. Except for AFTA itself, there are FTAs constituted by ASEAN plus 3 respectively (ASEAN plus China, ASEAN plus Japan and ASEAN plus Korea). And ASEAN plus 6 (China, Japan, South Korea, Australia, New Zealand and India) is in its progress. In Africa, the existing RTAs contain ECOWAS (Economic Community of West African States), SADC (Southern African Development Community), COMESA (Common Market for Eastern and Southern Africa), and CEMAC (Communauté Economique et Monétaire de l'Afrique Centrale). In Middle East, the major RTA is the GCC (Gulf Cooperation Coucil) formed by Kuwait, Saudi Arabia and other six countries. The members of GCC are making efforts to establishing the Arab League with Egypt, Jordan, Morocco and other countries. #p#分页标题#e#

In this process, the institutionalism of the RTAs becomes obvious. Currently, most of the RTAs are established in legal forms, and enhanced by corresponding international organizations.This tendency showed that regionalism has generated its own energy: the regional integration is more and more regarded as unavoidable, because the current arrangement is forcing the non-members to set aside the integral markets”.

B. Critical issues in establishing RTAs

In the past decade, the proliferation of RTAs has been identified as one of the most important tendencies in the world economy. The new wave of regionalism is distinguished by its wide-ranging coverage and complexity, since investment rules are increasingly incorporated in the recent RTAs. The explosion of RTAs has caused heated discussions. In general, the studies on RTAs have mainly focused on some critical issues including the motivations behind RTAs, types of RTAs, scope of RTAs, principle of RTAs, and their impact on the multilateral trading system.

I. The positive and negative impacts of the regional integration

The impact of regional integration on the multilateral trading system is quite controversial. The proponents of RTAs hold that, the primary objective of regional integration is to realize trade liberalization through RTAs, which is consistent with the primary objective of the multilateral trading system. Regional integration is a realistic choice when the global integration can not be realized in a short time, and it will accumulate the experience for the global trade liberalization. Thus the regional integration would function as building-blocks for multilateral trade liberalization. The opponents contend that, regional integration is a new form of trade protectionism. It is more hided compared with the traditional trade protectionism. Along with the proliferation of regional integration, the multilateral trading system would collapse, and even the global economic and political stability would be threatened. Therefore, regional integration is the stumbling-blocks to multilateral trade liberalization.

The classic model for analyzing the economic effects of RTAs is Jacob Viners theory of trade diversion and trade creation. He contended that, as the tariffs on intra-trade among members are removed, trade creation will takes place due to the displacement of domestic production by imports. On the other hand, due to the preferential tariff, the shift of production away from a lower-cost producer outside the RTAs to a higher-cost source of supply within it will cause trade diversion.Critics argued that regionalism is detrimental to world economy because trade diversion exceeds trade creation in almost all cases.Defenders claimed that RTAs can assist multilateral trading system in fostering trade liberalization, as the trade distortion by RTAs has not been confirmed by the empirical analysis conducted by the OECD and the WTO.The report of World Bank in 2005 also pointed out that RTAs can complement autonomous trade liberalization to promote productivity gains.However, most researchers held that the economic impact of RTAs should be examined in a contextual way. For example, WTO Secretariat claimed that, the economic impact of regional arrangement depends on their particular architecture, including how far they go in reducing trade barriers and how many sectors they cover.More recently, Donald Feaver and Kenneth Wilson provided three specific factors to evaluate the economic impact: geographical proximity of RTA members; level and diversity of economic development of members and the scope and depth of instrument type.#p#分页标题#e#

When it comes to legal impact of RTAs, all the studies stressed the negative aspects of the RTAs. International lawyers worried that the proliferation of RTAs was leading to judicial fragmentation in the global scope.More than 200 RTAs notified to the WTOnot only created parallel legal systems for WTO members, but also undermined the legitimacy and authority of the WTO system. For example, Piker examined the RTAs under an institutional perspective. His study suggested that RTAs drain states enthusiasm for multilateral negotiations, create conflicts on the legal obligations between RTAs and the WTO, and divert resources form the WTO negotiation.

At the moment, it is still not clear that in what way the debate will go. A foreseeable trend is that, the regionalism represented by regional economic integration will co-exist with the globalization represented by the WTO regime in a long time.

II. The variety of the categories and forms of RTAs

There are many ways to regional integration. According to the level of integration, there exists a ladder-shaped structure from low level to high level. Many countries with full experience of RTAs are now trying to make a breakthrough on the types of RTAs.

First, the members of RTAs are not confined to the neighboring countries. The bilateral FTA became established between the countries in different regions, continents. For example, the US and Singapore have established a FTA. Second, a new type of large FTA involving the members across the regions and continents is underway. For example, the FTAA and EU-Mediterranean FTA are under negotiation. Last, there are plans to improve the low-level FTA to a higher-level. For instance, the Lome Agreements by EU and 77 African, Caribbean and Pacific countries are famous for their GPS (General Preferential System) treatment. Nowadays, the EU is not content with the current GPS treatment, and began to negotiate EPA (Economic Partnership Agreement) with these developing countries instead of the Cotonou Agreement. These negotiations will be completed within 2008.

III. The content of RTAs is expanding

The traditional RTAs aim to reduce or eliminate the tariff on trade, and prohibit or restrict the non-tariff barriers. Nowadays RTAs not only extend to the liberalization on trade in service, but also address the trade-related areas including investment rules, competition policies, environmental policies and labor law. In this sense, a new generation of RTAs is taking shape.

The content of this new generation of RTAs includes a wide range of economic activities. Except for trade in goods, the coordination among the policies on trade in service, investment, competition, industry, agriculture, environment, social welfare, and high-technology becomes the new objective of regional integration. Besides, the reality is that, the financial risks involved in the globalization are going up, which provides the necessity for the mechanism of intra-regional capital and financial cooperation. Furthermore, the communication and cooperation in technology and culture is critical to improve overall strength of the whole region, resist the outside negative impact and enhance the mutual understanding or trust. The construction of fundamental infrastructure and environmental protection also constitute the most needed area for the countries to cooperate. It is necessary to address these areas as the important areas for regional cooperation, in order to keep the regional integration in the right track and have the sustainable development in future. #p#分页标题#e#

IV. The enforcement of RTAs is strengthened

The establishment of RTA should achieve a balance between flexibility and enforceability. Flexibility refers to the policy margin necessary to pursue members domestic development goals, while enforceability requires the effective and timely implementation of the legal rules. Since the RTAs are legal instruments, the flexibility is reflected by the elastic provisions through negotiation, and the enforceability is embodied in the strong dispute settlement mechanism.

There is a trend from institution-building to institution-enforceability with regards to the focus of RTAs. Currently, all the most important RTAs in the world, such as NAFTA, ASEAN and EU, have the dispute settlement mechanisms. And the enforceability of these mechanismsis in accordance with the development level of its members. However, the historical review on the development of RTAs showed that more and more RTAs incorporate the dispute settlement mechanism as an integral part.

V. The internal stimulus for the development of RTAs

RTAs can not survive without certain political and economic grounds. Whatever the trade policy is, it is the extension of domestic economic policies which is reflecting the specific economic situation and trade objectives of a country. It is widely accepted that the RTAs are motivated by multiple reasons, such as security policy consideration, economic interdependence and geographic connection.These considerations mainly include economic and political aspects.

1. Economic interest

There is no doubt that economic interest is the most important driving factor for RTAs. According to the analysis on World Trade Report 2003” by WTO, the inclusion of RTAs is driven by the desire for accession to bigger market. This kind of accession is more easily to be granted on regional or bilateral level, especially when the WTO members are lacking of the will to further trade liberalization.As for the powerful economies, RTAs could constitute a stimulus for the global trade liberalization under the multilateral trading system. This is the so-called concept of competitive liberalization”. With regards to the developing or least-developed economies, RTAs could be an instrument to promote their economic development, partially because the RTAs could help the weak economies to attract more FDI (foreign direct investment) inflows.

2. Political and security needs

The political and security elements behind the RTAs relates to the historical and realistic background, the position and impact of their members in the regional or global issues, the geographic location of the members and their comprehensive strength, and so forth. For the powerful economies, such as the US, the RTAs could help to realize its own economic and political interest in the region , or to enhance the negotiation power in multilateral trade negotiation. For developing economies, RTAs could also be good instruments to strengthen the group voice in the global political and economic stage. It should be noted that, during the negotiation with the powerful economies, some poor economies are forced to accept the additional political conditions beyond the scope of RTAs.#p#分页标题#e#

C. Chinas practice in establishing RTAs

Since many free trade agreements of China are still under negotiation, there is no systematic and in-depth study focusing specifically on it. However, there are many studies on the key concepts involved in the issue. Background of each is indispensable to the more comprehensive discussion on the topic.

I. The efforts of China to participate RTAs

There are two aspects of Chinas efforts in participating RTAs.

The one aspect is to promote regional economic integration through comprehensive international organization. These international organizations do not originally aim to promote trade liberalization; however, the activities of these organizations could contain or promote free trade. The typical examples are the Shanghai Cooperation Organization and the APEC.

In 1991, China joined the APEC. In October 2001, the 13th Ministerial Meeting and 9th informal leadership meeting of APEC held in Shanghai, which marked the significant step for China in promoting regional economic integration. Different from the traditional regional economic integration institutions such as EU, NAFRA, APEC showed adherence to open regionalism”. Its achievement on investment and other fields could also apply to the non-members, which is consistent to the non-discriminatory principle of WTO. In current situations, there is no free trade agreement under the APEC, which is conflict with the form of regional integration provided in the article 24 of GATT1994. Even through the US tried more than once to formalize the trade and investment rules, however, the other members were against to do so for the reason that it will be discrimination to non-members. Most of the Asian members hold that APEC should be consultation forum in nature, in order to promote open economic cooperation” and open regionalism”. As a loose regional economic cooperation institution, APEC has taken stride in last ten years, and promoted the economic cooperation and trade growth in Asia and Pacific region. It stresses the open free trade, which is a breakthrough to the global trade protectionism. This unique style of regional cooperation is beneficial for the building and development of WTO regime. And the soft negotiation mechanism is positive to the free trade in the Asian pacific region.

The other aspect is to sign bilateral and multilateral free trade agreement, and promote the intra-regional free trade through institutionalism. In May 2001, China joined the Bangkok Agreement, which is the first preferential trade arrangement with substantial content China has joined. In November 2002, China and ASEAN signed the China-ASEAN Free Trade Agreement, which aims to realize the free trade area between them within 10 years. In June 2003, China and Thailand signed the free trade agreement to eliminate the tariff on vegetable and fruit, and Singapore joined the agreement later. In July and October 2003, mainland China signed CEPA (Closer Economic Partnership Arrangement) with Hong Kong and Macao respectively. In April 2005, China and Pakistan conclude the Free Trade Agreement on Early Harvest Scheme. In November 2005, China and Chile signed Free Trade Agreement. In April 2008, China and New Zealand signed Free Agreement.#p#分页标题#e#

At the same time, China are enhancing regional and sub-regional economic cooperation, including Tumen River Development Program, Lancang-Mekong Basic Economic Cooperation, China-Australia Free Trade Area, China-Gulf Cooperation Council Free Trade Area, China- Iceland Free Trade Area, economic cooperation with Northeast Asian countries (China-Japan-South Korea Free Trade Area and Monetary Cooperation Agreement” among China, Japan, South Korea and ASEAN in 2000), economic cooperation with South Asia (China-India Free Trade Area). Furthermore, the ASEAN plus three programs (ASEAN and China, Japan, South Korea) has also been officially launched.

Among these efforts, the CAFTA (China-ASEAN Free Trade Area) is a significant milestone since it is the first FTA signed by China. It is not only the natural result of the deeper economic cooperation between the partners, but also the inevitable choice for them against the background of economic globalization and regional integration.In November 2002, the ASEAN leaders and Chinese Premier Zhu Rongji signed the "Framework Agreement on Comprehensive Economic Co-operation". It marked the beginning of the creation of one of largest free trade areas in the world. As noticed by the scholars, ACFTA [CAFTA]s sheer size alone is sufficient to merit further analysis. When coupled with Chinas economic rise and World Trade Organization (WTO) accession. ACFTA [CAFTA] has the potential to significantly impact the WTO-led multilateral trade system”.

II. The evaluation on the Chinas practice in RTAs

1. The regional integration institutions China joined are loose-structured, lack of binding force and poor in enforcement.

APEC is full of soft mechanism, which results in its poor enforcement. It triggered the introduction of ASEAN plus three” program. The success of CAFTA is a great achievement for China; however, it built on the deliberate ignorance of the gap on culture, economic and state forms. This framework ensured the conclusion of the CAFTA, but can not guarantee the enforceability of it. As the sub-regional economic group within the APEC which is based on the open regionalism” principle, CAFTA could only be open trade integration institution. However, the open regionalism has faced great challenges in reality.According to the plan, the CAFTA will be a open trade integration institution, but the further development would inevitably lead to the close mechanism.Therefore, CAFTA will have to choose between the open and close mechanism in future.

2. The RTAs joined by China remain in low level integration, and absence of the cooperation with powerful economies.

Currently, among the RTAs that China has joined, is negotiating or proposed, the CEPA is economic cooperation within China, most RTAs are bilateral, and the only regional economic cooperation is represented by CAFTA. This is not consistent with the global trend of RTAs. Moreover, the RTAs promoted by China remain to stay in the level of Free Trade Area and preferential agreement, and have not come to the high level of common market or tariff union. Even under the framework of CAFTA, ASEAN is not really a powerful economic cooperation partner for China. Thus in the East Asia region, only when the Japan and South Korea joined in the regional integration, the economic cooperation institution could be established comparable to NAFTA or EU. In that sense, in the future plan of Chinas RTA strategy, it should be taken into account that how to establish RTA with powerful economies especially the competitive partners. #p#分页标题#e#

3. The RTAs promoted by China have been attached too many political factors, and easily to result in political distrust.

The political factors can never be ignored in the RTA strategy of a country; however, these factors have been emphasized too much in Chinas RTA practice. The typical example is CAFTA. CAFTA is an important component of Chinas new security concept”, which is promote multilateralism to dilute the unilateralist policy by the US in global and regional affairs. Thus in CAFTA, China chose to build the free trade area with the ASEAN countries as a whole, rather than build free trade area with the ASEAN members respectively. The positive aspect of this strategy is to enhance the linkage of the China and ASEAN as a whole, so as to eliminate the security threat of ASEAN to China and dilute the unilateralism of the US in Southeast Asia. However, from the pure economic perspective, it would be more beneficial for China to establish free trade area with each SEAN member respectively. Since some of the ASEAN members are still least development countries, China and these economies are lack of economic complementarities.

There is no need to say that political factors are important considerations within the RTA strategy. However, they cannot constitute the decisive factors for RTA strategy. Against the background that many outside suspicious arising from the Chinas rise, it would be better to promote economic development without obvious combativeness.

4. Chinas RTAs practice is lack of long-term plan, and without a sustainable strategy.

Although China is quite active in promoting RTAs building, it did not follow a enforceable long-term strategy in regional institutional cooperation. Compared to China, the US has followed a RTA strategy since it was disappointed by the progress of multilateral trading system. The RTA strategy of the US is characterized by eroding multilateralism by regionalism, influencing America through North America, and controlling globalization through Asia-Pacific region. The long-term strategy can inspire China in designing its own strategy.

D. Major issues in the road map establishing Chinas RTA strategy

Regional integration is another way for promoting trade liberalization, facing the stagnation of multilateral trading system. The extra non-economic considerations are also proved to be quite important for the RTAs. The traditional ignorance to RTAs by the USand Japan , has been changed into increasingly welcome attitude towards intra-regional economic cooperation. Particularly the US has viewed RTAs as a powerful instrument to realize its economic and political interest. The US Congressional Budget Office has issued a research paper on the pros and cons of the RTAs for the US. In this paper, the political and diplomatic benefits involved in the RTA have been stressed. It took the 1985 the US- Israel FTA as an example, and concluded that the value of this RTA is almost entirely for foreign policy reasons.Facing the competition for Asian neighbors and other countries in the world, Chinas effort on RTA building is somehow lagging behind.#p#分页标题#e#

On September 10-12, 2007, the conference on Multilateral Regionalism” at the WTO headquarters, issued seven reports relevant to RTAs. This conference criticized the Chinas RTA strategy, and held that Chinas RTA approach is shallow integration, which mainly addresses the tariff issues and does not contain other important issues, including trade in service and intellectual property. It also contended that this approach is attached strong political features. And RTAs under the APEC regime is regarded as the best way for China to participate in the process of multilateral regionalism.

Taking into consideration the development of RTAs worldwide and the realistic factors influencing the RTAs in the Asia Pacific region, this conference has given some useful and urgent suggestion for Chinas RTA strategy. Generally speaking, Chins RTA strategy should pay attention to the following issues:

I. Legal basis for RTAs: the conflict between the regionalism and multilateralism, and control the negative aspects of RTAs to the WTO multilateral trading system.

One of the most important issues about RTAs is the regulation of RTAs under the multilateral regime, in order to ensure the original objective of promoting free trade. China, as a late beginner in both multilateral trading system and RTAs, should actively engage in the two-tier promotion model. More importantly, China should adjust its relevant policies in accordance with the most recent development in RTAs and Multilateral trading system.

II. The overall strategy: a multi-level step-by-step approach to promote RTAs

The conference on Multilateral Regionalism” held that the most suitable way for China is to promote RTAs in APEC approach, basically because the flexiable feature of APEC regime. However, APEC is only an important mechanism for promoting RTAs, not the best one. China should refer to the priorities of the partners regionalism strategies; promote RTAs in a multi-direction, multi-level and step-by-step way. In other words, Chinas RTA strategy should include several aspects, such as the choice of interests, level design, direction arrangements and steps to promote RTAs.

III. Choice of interests: the combination of political and economic interests

In the process of promoting RTAs, there is sometimes a dilemma to give the priority the political interests or the economic interests. In fact, these choices should be combined under the national interest. That is to say, the RTA strategy should serve the national development strategy. For example, nowadays, as the resources became critical to the national development strategy, China may consider establishing RTAs with some destinations of oil and rare metal mines.

IV. Level design: the importance of inter-nation or inter-continent RTAs#p#分页标题#e#

The Regional in RTAs is originally used in its geographic meaning. That is to say, the RTAs are often negotiated between the countries in geographic proximity. The EU, NAFTA, and ASEAN are the typical examples. However, in modern times, the RTAs have been developed beyond the geographic meanings. For example, the US-Israel RTA is not concluded by neighboring countries. In addition, although the APEC mentioned Asia pacific region, the members are by no way geographic neighbors. However, Chinas RTAs are basically confined to cooperation with the neighboring countries.

Thus China should participate in multi-level regional integration, including the regional forum (such as APEC), the institutional RTAs (such as CAFTA, bilateral FTAs), strategic and loose-structured regional cooperation organization (such as Shanghai Cooperation Organization). Among them, the institutionalization of RTAs is the most effective policy instrument, compared with the loose-structured regional organization. For instance, the differences in the design of legal frameworks between ASEAN and NAFTA are quite typical. The ASEAN is characterized by its loose institutional construction and soft legal obligation. By leaving policy space for its member states to pursue their development goals; ASEAN maintains the flexibility” of its rules, while weakens its enforceability” at the same time. In contrast, with a rule-based system and integrated dispute settlement mechanism, the enforceability” of NAFTA (especially chapter 11) is beyond any doubt.

Furthermore, in the process of building multi-level RTAs, Chinese government should consider adopting higher level of regional integration. The RTAs established by China should not stay in the level of FTA, but go for the higher level of common market or economic union, when possible.

V. Direction arrangement: the expansion of the contents of RTAs and the deepening of regional integration

The contents of RTAs depend on the liberalization fields that the members choose. The FTA should include the scope of products covered by the trade regulations on tariff reduction or elimination, timetable for the phasing out of trade barriers, rules of origin, trade remedies. The Tariff Union should include the uniform tariff and trade policies for non-members. Currently, the core of most RTAs is the liberalization on trade of products. In 1996, the WTO Regional Trade Commission developed a guide format for WTO members to inform RTAs, and most members refer that that format to provide RTA information.

In the era of deepening regional integration, China may consider the regional integration in the fields of investment, trade in service, intellectual property, government procurement, and competition policy. However, it might be a little hasty for China to accept the uniform environmental and labor standards at the regional level.#p#分页标题#e#

VI. Step-by-step approach: the construction of East Asian Community which has the potential to become a world economic pole

The promotion of RTAs should follow a step-by-step approach, especially in choosing the cooperation partners. China should choose its partners from easy to hard, and in gradual development. Currently, the US and EU are the two most important poles in world economy, which have important voice and the power to draw up rules. Affected by the domestic economic stagnation, Japan is losing the power influencing the world economy growth. Thus it is critical for China to form a new pillar making good use of RTAs in further development. In reality, China, as the largest developing country, with the support from the other developing countries, would be the most powerful protection for world economy. For East Asian countries, it is also a urgent task to gather the strength to contend the US and EU. Taking into account that Chinas current RTAs are mostly south-south cooperation, China should refer to the experience of other countries in south-south cooperation, and seek for the new model for south-south regional integration.China-New Zealand FTA is a good start. After gained certain experience in south-south cooperation, China may consider adopting north-south cooperation as a new form of regional integration. With the RTAs with EU, NAFTA, or other developed economies, China would further promote the adjustment and upgrading of the existing RTAs.