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Journal of Economic Integration 2014 December;29(4) :676-699.
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
Corresponding Author: Kuo-I Chang ,Tel: +886 422850501, Fax: +886 422850501, Email:
Copyright ©2014 Journal of Economic Integration
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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