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Details in the China-Taiwan Free Trade Agreement

Author

Listed:
  • Chang, Kuo-I

    (National Chung-Hsing University)

  • Hayakawa, Kazunobu

    (Institute of Developing Economies)

Abstract

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.

Suggested Citation

  • Chang, Kuo-I & Hayakawa, Kazunobu, 2014. "Details in the China-Taiwan Free Trade Agreement," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 676-699.
    • Handle: RePEc:ris:integr:0646
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    More about this item

    Keywords

    FTA; Utilization; China;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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