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A Study of the Impacts of Free Trade on Taiwan's Fisheries Sector - by Incorporating the Effect of Mainland China's Accession Public Deposited

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  • After joining the WTO, easier access to Taiwanese market due to tariff reductions and deregulation of import restriction is expected to have substantial impacts on the fishery sector in Taiwan. Comparing to the tariff rates in 2001, the average tariff rates of fishery products will decrease 35.5%, in 2004. Especially, after entering WTO in 2002, the import regulation in Taiwan will allow direct import of the fishery products from Mainland China. This study attempts to evaluate the impacts of direct trade on Taiwan’s fishery sector by specifying a fishery sector partial equilibrium model to assess the effects of China’s WTO accession to Taiwanese market. In addition to specify a 40-product and 69-fishing activity model to capture the domestic fishery sector, the fishery sector model also includes an import-export sector, a factor input sector, and a supply-demand equilibrium condition to analyze the distributions of social welfare due to trade liberalization. Three simulations were conducted to evaluate the impacts of tariff reductions in 2004, two years after entering WTO. Scenario 1 specified the tariff reduction based on the import price in 2000 without considering the effect of importing China’s fishery product since 2002. In addition to specify the tariff reduction, Scenarios 2 and 3 assume Taiwan will import the fishery products from China based on the highest and lowest market price levels, respectively. The results indicate a greater impact on fishery sector if Taiwan encounters extremely low import price competition for those specific fishery products originated from China. The total production and production value of the fishery sector would decrease by 5.86% and 12.75% in 2004, respectively. The result from Scenario 3 suggests that the aquaculture sector would suffer the heaviest loss with the production and production value decrease by 16.67% and 28.8%, respectively, compared to the result from Scenario 1. The demand for labor would decrease by 15.42% with a major reduction of 4.67% and 20.34% in offshore/coastal and aquaculture sector, and the wage rate will decrease by 25.44% in the aquaculture sector. Taiwanese fishery industries need to improve their operational efficiency, diversification, and production and distribution structures to maintain a sustainable development facing the trend of globalization.
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  • Chiang, Fu-Sung. 2002. A Study of the Impacts of Free Trade on Taiwan's Fisheries Sector - by Incorporating the Effect of Mainland China's Accession. In: Proceedings of the Eleventh Biennial Conference of the International Institute of Fisheries Economics and Trade, August 19-22, 2002, Wellington, New Zealand: Fisheries in the Global Economy. Compiled by Ann L. Shriver. International Institute of Fisheries Economics & Trade, Corvallis, Oregon, USA, 2002. CD ROM.
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