The Impact of RCEP Tariff Concessions on Bilateral Agricultural Trade between China and the Republic of Korea
DOI:
https://doi.org/10.54097/n1hx4b83Keywords:
RCEP; tariff concessions; bilateral agricultural trade; gravity model; GTAP model.Abstract
The Regional Comprehensive Economic Partnership (RCEP) has broadened the institutional framework for bilateral agricultural trade between China and the Republic of Korea. This study classifies agricultural products in Harmonized System (HS) Chapters 01-24 into nine groups and examines the scale, composition, competitiveness, and complementarity of bilateral trade from 2015 to 2023. It then estimates an extended fixed-effects gravity model of China's agricultural exports to 11 RCEP partners and uses a dynamic recursive Global Trade Analysis Project (GTAP) model to simulate the effects of fully implementing the bilateral zero-tariff commitments. Bilateral agricultural trade increased from USD 5.115 billion in 2015 to USD 7.687 billion in 2023, although annual growth was uneven. China's exports were concentrated in primary products, whereas Korea's exports were weighted toward processed foods and beverages. The preferred gravity specification yields a negative tariff coefficient and positive coefficients for economic scale, logistics performance, per-capita-income differences, and agricultural land. The GTAP simulation indicates that full tariff elimination would increase China's aggregate agricultural output by 0.31% and reduce Korea's by 0.97%. It would also expand China's agricultural trade surplus by approximately USD 5.922 billion and Korea's deficit by approximately USD 1.932 billion, while generating GDP and welfare gains in both economies. Tariff liberalization therefore expands trade mainly by reinforcing the existing pattern of specialization and complementarity without immediately transforming the bilateral trade structure.
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