| Details in the China-Taiwan Free Trade Agreement |
Kuo-I Chang, Kazunobu Hayakawa |
National Chung-Hsing University, Taichung, Taiwan
Institute of Developing Economies, Bangkok, Thailand |
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Corresponding Author:
Kuo-I Chang ,Tel: +886 422850501, Fax: +886 422850501, Email: kic@nchu.edu.tw |
| Copyright ©2014 Journal of Economic Integration |
| ABSTRACT |
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We conducted an empirical investigation into the determinants of Free Trade Agreement
utilization in exports from Taiwan to China. First, we estimated the selection equation
to see what kinds of products are included in the early harvest list. As a result, we found
that Taiwan includes products with a medium magnitude of benefits from tariff removal
in the early harvest list. We then estimated the equation for the determinants of Free
Trade Agreement utilization by introducing an inverse of the Mills ratio estimated in the
selection equation. As expected, the findings show that the Free Trade Agreement rates
are more likely to be utilized for products with a larger tariff margin. In addition, some
rules of origin are found to be relatively restrictive.
JEL Classification
F15: Economic Integration
F23: Multinational Firms; International Business |
| Keywords:
FTA | Utilization | China
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