Selection and utilization of hand tool industry in the China-Taiwan free trade agreement

The threshold decomposition method for trade patterns is used to analyze hand tool parts and components between China and Taiwan from 2000 to 2012. The selection and utilization of hand tool parts and components are analyzed by the Poisson pseudo maximum likelihood (PPML) model and a Probit model in considering of the impact on the Economic Cooperation Framework Agreement (ECFA) early harvest list. The significant negative coefficient of Taiwan's revealed comparative advantages (RCA) implies that China did not fully open its market to highly competitive Taiwanese hand tool parts and components when negotiating the early harvest list with Taiwan.