Abstract
Petrochemical products, particularly plastics, contribute to a significant share of expanding and increasingly diverse trade flows between the Gulf Cooperation Council (GCC) countries and China. The petrochemical sector could benefit from a preferential bilateral trade regime between China and the GCC, but has been a bone of contention in the GCC-China Free Trade Agreement (FTA) negotiation process. This study applies a dual-stage model of import demand functions to estimate the impact of trade liberalization scenarios, within an FTA framework, on China’s imports of major plastics from the GCC and the rest of the world. It assesses the implications of these scenarios for all parties.
