China-ASEAN Free Trade Area and Service Trade

This paper empirically estimates the Service trade structure effects of China-ASEAN Free Trade Area based on endogenous treatment and differences-in-differences methods, The results prove that the likelihood of an new RTA membership is enhanced by similarity of endowment structure and compensation of expenditure pattern, and also RTA accelerates the inter-industry trade of service departments between partners. Overall, this indicates the potential advantage of integration in East Asia is huge, and higher risk of asymmetry demand shocks will come along with the process of integration in service departments, which means regional public goods are important.