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Details in the China-Taiwan Free Trade Agreement

Kuo-I Chang () and Kazunobu Hayakawa ()
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Kuo-I Chang: National Chung-Hsing University, Postal: Department of Applied Economics, National Chung-Hsing University, No.250, Guoguang Rd., South Dist., Taichung 402, Taiwan

Journal of Economic Integration, 2014, vol. 29, 676-699

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.

Keywords: FTA; Utilization; China (search for similar items in EconPapers)
JEL-codes: F15 F23 (search for similar items in EconPapers)
Date: 2014
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