The potential analysis of china-Thailand trade under the framework of regional comprehensive economic partnership

Abstract

The ongoing RCEP (Regional Comprehensive Economic Partnership) negotiation aims to promote mutual benefits among member countries, remove tariff and non-tariff trade barriers, promote trade and investment facilitation, and create a comprehensive and inclusive high-quality free trade agreement. Among ASEAN countries, Thailand is China's third largest trading partner, and China has been Thailand's largest trading partner for nine consecutive years. It’s a rare opportunity to develop product trade and expand exports for both China and Thailand. this paper adopts empirical analysis to construct a "single-country model" to investigate the trade potential and trade effects between China and Thailand under the RCEP framework. This research reveals that the trade potential between China and Thailand is in the stage of "potential exploiting", and China-Thailand trade has both trade diversion effect and trade creation effect in the RCEP context. The trade creation effect of both countries is greater than the trade diversion effect of both countries, indicating that the establishment of RCEP is conducive to the development of welfare of both Thailand and China.