The impact of the China-Australia free trade agreement on China’s agricultural imports

China and Australia signed the Free Trade Agreement (ChAFTA) in 2015, which aims to eliminate or reduce trade barriers between countries through tariffs or quotas. Eliminating trade barriers has expanded China’s agricultural imports from Australia. ChAFTA will strengthen the trade relationship between the two countries, enabling agricultural product imports to have a trade creation effect. This article systematically evaluates the trade effects of ChAFTA on the scale of China’s agricultural product imports based on data from 2000 to 2020. Two statistical methods, Ordinary Least Squares (OLS) and Poisson Pseudo Maximum Likelihood (PPML) are applied to estimate the trade effects of agreements. Empirical studies have shown that ChAFTA has a significant trade creation effect on China’s agricultural product imports, while the trade diversion effect is insignificant. When time fixed effects and export country fixed effects are controlled, the PPML method exhibits stronger explanatory power compared to OLS and the estimated trade creation effect is more significant. The empirical research results remain robust even after considering the impact of WTO. There are no endogeneity issues in the results after adding lead variables. By incorporating lagged terms, we find there is no phase-in effect. Empirical research on heterogeneity analysis of agricultural product classification found that ChAFTA had the most significant impact on the import of forest products and aquatic products, followed by textiles and agricultural products.