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

Transcription

1 A Study of the Impacts of Free Trade on Taiwan s Fisheries Sector - by Incorporating the Effect of Mainland China s Accession Fu-Sung Chiang 1 Abstract 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 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 importexport 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 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. Keywords: Direct Trade, Fisheries Sector, Taiwan, China I. Background and Motivation Taiwan is committed to trade liberalization and the globalization of its domestic markets and is generally perceived as a party willing and able to meet the World Trade Organization s (WTO) implicit requirements as well as the requirements of its trading partners. In 2000, Taiwan had formally concluded trade negotiations on all products with all of the interested WTO members. Taiwan was included as the 144 th WTO member in January 2002 and the accession commitments have currently been implemented. The WTO Agriculture Agreement was negotiated in the 1986 to1994 Uruguay Round and it was a significant first step towards fairer competition and a less distorted resource allocation. Though it is agreed that free trade will benefit all nations and that trade liberalization is desirable, the process of adjustment toward a free trade regime could be very slow and costly. In the spirit of trade liberalization, the Taiwanese government has pursued tariff reductions during the last several years. The nominal tariff on agricultural products fell from 12.7% in 1985 to 11.77% in 1999, while the tariff on industrial goods fell from 6.11% to 2.40% during the same period. After joining the WTO in 2002, a significant tariff reduction on agriculture, livestock, and fishery is expected in 2004 in Taiwan. Comparing to the tariff rates in 2001, the average tariff rates of agriculture, livestock, and fishery will decrease 39.2%, 31.9%, and 35.5%, respectively in Fu-Sung Chiang is an Associate Professor in the Institute of Applied Economics, National Taiwan Ocean University; 2 Pei-Ning Road, Keelung, Taiwan 202, R.O.C., , (Fax), frank@mail.ntou.edu.tw.

2 Especially, the importation of fishery products from Mainland China was used to prohibit and accused to be illegal. However, after entering WTO in 2002, the import regulation in Taiwan will allow direct import of the fishery products from Mainland China. The impacts could be considerably large on fishery sector, since all the direct import control regulations on fishery products will be eliminated. As a result, the value of imports is expected to grow in the near future, and the domestic agriculture will face enormous challenge, because most Taiwan s agricultural and fishery products are not competitive in the world market. In 1996, Taiwan s total output value (calculated at the producers level) of primary agricultural, livestock, and fishery sectors was about NT$622 billion (1 US$=28 NT$), which accounted for about 3.15% of the total output value (GDP) in Taiwan, and for about 7.43% of total employment. These three sectors provided major employment opportunity for the unskilled labor in the countryside. The primary factor (margin, labor, capital, land, and other costs) payment of agriculture, livestock, and fishery accounted for about 61.18%, 17.38%, and 59.99% of the total inputs value, respectively. Especially, both agricultural and fishery sectors are labor intensive. They use more primary labor inputs than other sectors. The labor payment in both agricultural and fishery sectors is the major input cost, which account for 44.67% and 29.76% of the total output value, respectively. The average unskilled labor in these three sectors accounts for 97.52% of the total labor force, which is much higher than in other sectors (51.85%). Because of its competitiveness of the industrial sector, Taiwan s GDP and import-export quantity are expected to continue to grow after the WTO accession. However, huge unemployed unskilled labor force is expected to occur in agricultural, livestock, and fishery sectors. Prior to January 2002, the import regulations in Taiwan were used to ban direct importation of China s fishery products into Taiwan. However, the direct importation was allowed after both Taiwan and China joined the WTO in Hence, in addition to the impacts of tariff reductions, the fishery sector in Taiwan will also face the competition of cheap fishery products imported from China. According to Food and Agriculture Organization s (FAO) Fishery Catch and Landing Statistics Yearbook (United Nations, 2001), China is the dominant supplier for both aquaculture and capture fishery production, which is shown in Table 1. China s aquaculture and capture production accounted for 70.98% and 17.74% of the world total aquaculture and capture production in 2000, respectively. Most of the countries in the world supply more capture fishery products than their aquaculture products, for example, Taiwan supplied more capture fishery production than aquaculture production. However, China supplies more aquaculture production than capture fishery production and its fishery production is expected to be further expended in the future. Comparing to the massive exporting fishery quantity from China, Taiwan is a small importing country, and is certainly a price taker in the international market. The figures for both countries were about 2,856,762 and 1,572,835 MT in 2000, respectively, which are obtained from FAO s computerized fishery commodities database. The database has been expanded and at present covers the years from 1976 to This study analyzes the impacts of tariff reductions on fishery sector in Taiwan. Past similar studies considered the fishery sector as a single sector for the convenience of data compiling. However, different fishing activities have their unique production behavior and market conducts. Thus, this study disaggregated the fishery sector into three sectors, namely aquaculture, distant water fishery, and offshore/coastal fishery, which were based on the differences in production activity and the input cost structure. Thus, in considering the diversity of various fishery activities in the fishery sector, this study further specified a single-sector multi-activities partial equilibrium (PE) model, which is derived from the welfare maximization and implemented by the GAMS software. In addition, this study attempts to evaluate the impacts of direct trade on Taiwan s fishery sector by specifying a fishery sector partial equilibrium model and by assessing the effects of China s WTO accession to Taiwanese market. In addition to specify a 40 products and 69 fishing activities 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. II. Single-Sector Multi-Activities Partial Equilibrium Model Based on the concept of consumer s surplus, Samuelson (1952) defined a net social pay-off PAGE 2

3 function and transferred the regional exchange problem to a solution of maximization problem. Under the postulate of linear price-supply functions and price-demand functions, Takayama and Judge (1964) developed a quadratic programming model from Samuelson s approach. In the area of agricultural production and distribution, Plessner and Heady (1965), Yaron (1967), Duloy and Norton (1973), Baumes (1978), Burton and Martin (1987), Adams, Hamilton and McCarl (1986), and Chang et al. (1992) are just a few of the many applications of the single sector partial equilibrium (SPE) model on the agricultural sector. Sun, Chang and Chiang (1999) had specifies a single-sector multi-activities partial equilibrium model for the fishery sector in Taiwan to evaluate the impacts of the zero tariff reduction on all fishery outputs under the APEC EVSL scenario. The model is specified as Max P D h ( Z h ) d Z h + P D h E h - P S i ( X i ) d X i - P S i M h (1) h i Subject to Z h + E h - α hk Q k - M h 0 for all h (2) k β ik Q k - X i 0 for all i (3) k and Z h, X i, Q k? 0 for all h, i, and k. Suppose there are k activities in the fishery sector in Taiwan, such as defined in equations (1) - (3). Each of the activity produces the Q k output level based on the number of fishing boats and the acreages of the aquaculture farms. Denoting h for the output of the h th fish species and that each fishery production activity requires i input factors. Suppose there exists an integratable inverse demand curve for each of the outputs and input factors, which are represented by P h D ( Z h ) and P i S ( X i ), where P h and P i represent the output prices and input prices, respectively. In addition, Z h, E h, and M h represent the consumption, export, and import level of the h th commodity; α hk is the output level of the h th commodity via the k th activity; β ik is the input demand of the i th input factor via the k th activity; X i is the input supply of the i th input factor. The objective function such as defined in equation (1) represents the sum of the consumer surplus and producer surplus, which also defined the market equilibrium condition. Equations (2) and (3) represent the total demand for the h th commodity must be less or equal to the supply from all k export activities; the demand for the i th input factor must be less or equal to the quantity of input supplies. When the equilibrium conditions of the problem are satisfied, the shadow prices implied in equations (2) and (3) represent the equilibrium output and input prices. Since the possibility of substituting one input factor for the others is quite low, i.e., it s not possible to substitute the oil input by employing more labors to maintain the output level under the fishing activity, this study assumes a constant return to scale Leontief production function to represent the fixed input-output relationship. III. Data The magnitude of tariff reduction for each fish species is different and most of the fishing activities exhibit composite output. It is of interest to assess the degrees of impact on various fishing activities. For the fishery sector, this study specifies a 40-commodity, such as shown in Table 2, and 69 production activities with partial equilibrium model. The structure of the model is shown in Figure 1. The model represents the fishery sector in Taiwan based on the number of fishing vessels, aquaculture acreages, and the output level of fish species reported in the Fisheries Yearbook in Taiwan in The domestic consumption for fresh, chilled, or frozen fish products is defined as domestic production minus export plus import for each fish species. The domestic demand elasticity for each fish species is obtained from various publications of fish demand systems in Taiwan. There are 32 production activities to represent the capture fishery, such as shown in Table 3a, and 37 production activities to represent aquaculture fishery, such as shown in Table 3b. Each of the production activity is specified based on one composite fixed cost and three variable input levels, such as labor, vessel, and land (Taiwan Fisheries Bureau, 2000). The composite fixed cost includes costs for fishing gear, fry, feed, fertilizer, medicine, electricity, maintenance, transportation, insurance, oil, rent, ice and salt, fresh water, bait, entrance fee, and other costs. Each of the fishing activities is available for fishing vessels in various tonnage classes and various input supply elasticities for each class of PAGE 3

4 fishing vessels are specified. The aquaculture farming land is also specified as an input supply for the total acreages of land utilized in aquaculture fishery. In addition, labor supply accounts for the total person-day engaged in all 52 activities. The market cleaning mechanisms will force the equilibrium condition on the total number of fishing vessel for each tonnage class, the number of aquaculture land and the total number of labor. In order to incorporate the joint effect of Mainland China s WTO accession in the same time when Taiwan jointed the WTO, it is necessary to collect the market price level reported from China in INFOYU database to represent the status of importing fisheries products directly from Mainland China. For each of the fishery products, if the market price in Mainland China is lower than the average import price in Taiwan, then we will assume the market price in Mainland China is the world price and Taiwan is a price taker. The market price in Mainland China is collected form the INFOYU database, which was established by the Chinese government with assistance from the FAO. It is based in Beijing with two branches in Guangdong and Shanghai. Besides the two branches, INFOYU has developed a comprehensive network linked to 130 fish wholesale markets nationwide and receives fish price reports from 60 of them twice a week. INFOYU has become the major source of marketing support for producers and exporters in China, which is the largest fish producing country in the world. The average seafood prices in China between January 2000 and September 2001 obtained from the INFOYU database are shown in Table 4. This study also simulates the situation in which the fishery sector in Taiwan is encountered with the extremely low import price competition for specific fishery products originated from China. IV. Simulation Results By considering each fishery sector with different production activities, this study further specified a single-sector multi-activities partial equilibrium model, which is derived from the welfare maximization and implemented by the GAMS software. Three simulations were conducted to evaluate the impacts of tariff reductions in Scenario 1 specified the tariff reduction based on the import price in 2000 without considering the fact that importing Chinese fishery products are allowed since In contrast, Scenarios 2 and 3 assume Taiwan will import the fishery products from China based on the highest and lowest market price level shown in Table 4, respectively. The impacts of WTO accession on Taiwanese fishery sector are presented in Tables 5-7. The fishery sector in Taiwan would be more severely affected under scenario 3, i.e., if Taiwan faces an extremely low import price competition for those specific fishery products originated from China. (1) Scenario 1: Tariff reductions based on the import price in 2000 without considering the effect that China s fishery product is allowed to import since The simulation results show that the total production and the value of production in the fishery sector will decrease by 4.39% and 9.54% in 2004, respectively. Among the three fishery sectors, both offshore/costal and aquaculture would suffer the most adverse impacts. The results show that offshore/costal and aquaculture production would decrease by 12.67% and 11.54%, respectively. The value of production in the offshore/costal and aquaculture sectors would decrease by 22.84% and 20.89%, respectively. As a result of these decreases, labor demand would decrease by 6.84% and the major reductions are 3.51% and 8.64% in offshore/coastal and aquaculture sectors. Especially, the wage rate would decrease by 10.81% in the aquaculture sector. Suppose there are 300 thousand labors employed in the fisheries sector, then the total unemployment in the fishery sector would be 20,520 persons. Because of the tariff reduction, the quantities of fishery imports are expected to increase. The consumer s surplus would increase by 1.79% while the producer s surplus would decrease by 12.47%. The overall social welfare would increase by 1.29%. 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. The land input of marine culture, blackish water, and fresh water pond area would decrease 13,311, 25,375, and 15,426 hectares, respectively, which represent 2.02%, 14.29%, and 7.32% of the current land input, respectively. The vessel input in the offshore/coastal fisheries would decrease by 4.98%. As shown in Table 7, some of the species would be severely impacted after entering WTO in (2) Scenarios 2 and 3: Assuming Taiwan would import fishery products from China based on the PAGE 4

5 highest and lowest market price levels shown in Table 3, respectively. The total production and production value of the fishery sector would decrease by 5.86% and 12.75% in 2004, respectively. It is clear that the simulation results from Scenario 2 are not different from the results obtained from scenario 1. However, the aquaculture sector would suffer the most based on the results from Scenario 3. The production and production values would decrease by 16.67%, and 28.8%, respectively, comparing to the results from Scenario 1. The production and production values of offshore/coastal sector would suffer 13.73% and 28.19%, respectively. As a result of these decreases, demand for labor would decrease by 15.42% and the major reductions are 4.67% and 20.34% in offshore/coastal and aquaculture sectors, respectively. Especially, the wage rate would decrease by 25.44% in the aquaculture sector. Suppose there are 300 thousand labors employed in the fishery sector, the unemployment in the fishery sector would amount to 46,260 persons. Because of the reduction on tariffs, the quantities of fishery imports are expected to increase. The consumer s surplus would increase by 5.05% and the producer s surplus would decrease by 27.51%. The overall social welfare would increase by 3.89%. As shown in Table 7, some of the species would be severely impacted after entering WTO in The production of other shell carp, other fish, sea perch, carp, giant shrimp, and oyster would decrease by 7,146 MT, 3,795 MT, 9,212 MT, 2,749 MT, 10,632 MT, 5,704 MT, and 9,797 MT, respectively. Three simulations were conducted to evaluate the impacts of tariff reductions in This study concludes with a discussion of the policy implications on how to resolve the losses of the fisheries sector in Taiwan. The impact of WTO tariff reductions is substantial to the aquaculture and offshore/costal fisheries in Taiwan. In particular, allowing the imports of low price fishery products form China would intensify the impacts for specific fishery products. Taiwanese fishery industries need to improve their operational efficiency, diversification, and production and distribution structures to maintain a sustainable development in meeting the challenge of globalization. V. Concluding Remarks After joining the WTO, easier access to Taiwanese market due to tariff reductions and deregulation of import restrictions are 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 by 35.5%, in Especially, after entering WTO in 2002, the import regulation in Taiwan will allow direct import of the fishery products from Mainland China. This study used 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. Previous research considered the fishery sector as a single sector and did not analyze the fishery sub-sectors. In general, different fishing activities have their unique production behavior and market conducts. Based on the differences in production activities and the input cost structures, the fishery sector was disaggregated into three sectors, namely aquaculture, distant water fishery, and offshore/coastal fishery in this study. In addition, 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. 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 In addition to specifying the tariff reductions, 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 would decrease by 25.44% in PAGE 5

6 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. References Adams, R. M., S. A. Hamilton, and B. A. McCarl, (1986), "The Benefits of pollution Control: The Case of Ozone and U. S. Agriculture," American Journal of Agricultural Economics, 68, Baumes, H., (1978), A Partial Equilibrium Sector Model of U.S. Agriculture Open to Trade: A Domestic Agricultural and Agricultural Trade Policy Analysis, Ph.D. Dissertation, Purdue University. Burton, R.O., and M.A., Martin, (1987), Restrictions on Herbicide Use: An Analysis of Economic Impacts on U.S. Agriculture, North Central Journal of Agricultural Economic, 99, Chang, C.C., B. A., McCarl, J W., Mjelde, and J. W., Richardson, (1992) Sectoral Implications of Farm Program Modification, American Journal of Agricultural Economics, 74, Chang, C.C., (1998), The Carbon Sequestration Cost by Afforestation in Taiwan, Paper presented at the Conference on East Asian Environmental and Resource Economics and Policy, Taipei: Institute of Economics, Academia Sinica. Dixon, Peter B., Brian R. J. Sutton, and D. P. Vincent, (1982), ORANI: A Multisectoral Model of the Australian Economy, North-Holland, Amsterdam. Duloy, J.H., and R.D., Norton, (1973), "CHAC: A Programming Model of Mexican Agriculture, Multi- Level Planning: Case Studies in Mexico, eds., A.S. Manne and L.M., Goreux, Amsterdam: North- Holland Pub., Co., Fajardo, D.B., B.A., McCarl, and R.L. Thompson, (1981), A Multicommodity Analysis of Trade Policy Effect: The Case of Nicaraguan Agriculture, American Journal of Agricultural Economic, 63, McCarl, B.A., and T. H., Spreen, (1980), "Price Endogenous Mathematical Programming As a Tool for Sector Analysis," American Journal of Agricultural Economics, 62, Plessner, Y., and E.O. Heady, (1965), Competitive Equilibrium Solutions with Quadratic Programming, Metroeconomica, 17, Samuelson, P.A., (1952), Spatial Price Equilibrium and Linear Programming, American Economic Review, 42, Sun, Chin-Hwa and Fu-Sung Chiang, (1998), The Problems and Challenges Associated with World Trade Organization Accession Faced by Taiwan's Fishing Industry, J. Fish. Soc. Taiwan, 25(2): Sun, Chin-Hwa, Ching-Cheng Chang and Fu-Sung Chiang (1999), Impact Evaluation of the APEC EVSL on the Fisheries Sector in Taiwan An Application of Fisheries Sectoral Equilibrium Model, Academia Economic Papers, 27(3): , In Chinese. Taiwan Fisheries Bureau, , Fishing Vessel Yearbook, Department of Agriculture and Forestry, Provincial Government of Taiwan, Republic of China, Various Issues., , Fisheries Yearbook, Fisheries Administration, Council of Agriculture, Executive Yuan, Taiwan, Republic of China, Various Issues., 1997, Annual Economics Survey of Offshore Fisheries and Aquaculture in Taiwan, Department of Agriculture and Forestry, Taiwan, Republic of China. Takayama, T. and G. G. Judge, (1964), Equilibrium among Spatially Separated Markets: A Reformulation, Econometrica, 32: Yaron, D. (1967), Incorporation of Income Effects into Mathematical Programming Models, Metroeconomica 19, PAGE 6

7 Import demand Domestic Domestic demand Export demand Import Tariff Reduction Fishery Market Demend-Supply Demand-Supply Equilibrium Price Adjustment 39 Fish Species Output Sectors 52 Fishing Activities _ Leontief Production Function Price Exogenous Input Sector Price Endogenous Input Sector Cost for Fishing Gear, Fry, Feed, Cost Fertilizer, for Fishing Gear, Medicine, Fry, Feed, Fertilizer, Electricity, Medicine, Maintenance, Electricity, Transportation, Maintenance, Insurance, Transportation, Oil, Rent, Insurance, Oil, Fresh Rent, Water, Bait, Ice Entrance and Salt, Fee, Fresh and Other Water, Costs Bait, Entrance Fee, and Other Costs Various Water Land Demand Source Land Demand Various Fishing Tonnage Vessel Fishing Demand Vessel Demand Input Market Equilibrium Price Adjustment Figure1. Model Structure of the WTO Tariff Reductions on the Fishery Sector via the Single- Ice and Sector Salt, Multi-Activities Partial Equilibrium Model Aquaculture Land, Fishing Boat, and Labor Supply Various Labor Fish Demand Sector Labor Demand PAGE 7

8 Table 1. The Comparison of the Fishery Production, Aquaculture Production, Capture Fishery Production, Import and Export Quantity between China and Taiwan in 2000 Country Aquaculture Total Fisheries Fisheries Production Production (M.T.) (M.T.) Capture Fisheries Production (M.T.) Fisheries Import (M.T.) Fisheries Export (M.T.) China, Mainland 49,635,826 32,444,211 17,191,615 2,514,491 1,516,784 China, Hong Kong 162,001 4, , ,764 55,733 China, Macao 1, ,500 11, China Total 49,799,327 32,449,200 17,350,127 2,856,762 1,572,835 Taiwan, ROC 1,350, ,385 1,094, , ,851 All Countries 143,495,242 45,715,559 97,779,683 60,925,650 55,296,331 Sources: 1. FAO Fisheries Department, Fishery Information, Data and Statistics Unit, FISHSTAT PLUS: Universal Software for Fishery Statistical Time Series V2.3, PAGE 8

9 Table 2. Domestic Production, Import and Export Quantity for Various Fisheries Products under the WTO Agreement in Taiwan in 2002 and 2004 (2000) No. Fisheries Products Domestic Domestic Import Export Productio Consumptio Import Import Import Quantity Quantity n n Taxes intaxes intaxes in (M.T.) (M.T.) (M.T.) (M.T.) (B) (C) (A) (A)+(B)-(C) 1 Tilapia 49, ,087 18, Carp 19, , Eel 30, ,942 4, Sea perch 3, , Other fresh water fish 6,827 1,819 1,178 7, Milkfish 39, ,502 32, Sea bream 19, , Croaker 7, , Small pelagic fish 10, , Small bottom fish 21, , Scads* 24, ,003 11, Mullet 3, , Pomfret 9, , Other coastal migrating39,073 4,429 10,070 33, Hairtail 7, , Dorado 5, ,374 3, Sardine* 6, , Mackerel* 28, ,708 10, Skipjack 203, ,638 89, Other mackerels 13, , Tuna 244,840 2, ,270 92, Marlin 43, ,950 39, Shark 48,092 3,677 3,988 47, Cod 9 23, , Other fishes 76,073 12,582 25,874 62, Oceanic squid* 254, , , Other cephalopods 17,259 2, , Grass shrimp 3,901 3, , Kuruma shrimp 8, , Giant freshwater prawn 8, , Spiny lobster 17 6, , White shrimp 2,310 6, , Other shrimps 14,845 5,860 2,292 18, Crab 9,174 9, , Oyster 19,972 1, , Hard clam 26,700 1, , Small abalones 2, , Other shellfishes 11,881 5, , Other aquatic animals 3, ,854 1, Other molluscs 41 2, , Total 1,346,047 96, , ,797 Source: Fisheries Yearbook, Fisheries Administration, Council of Agriculture, Executive Yuan, Taiwan, PAGE 9

10 Table 3a. The Number of Fishing Vessels, Estimated Number of Fishing Vessels, and Idling Percentage for the Capture Fisheries in Taiwan (2000) Fishing Gears Number Vessels (A) of Estimated Number of Vessels (B) 1 F1. Otter trawling and bull trawling F2. Purse seine for tuna F3. Tuna long line 3 F3-1. ( ton) F3-2. ( ton) F3-2. (500-1,000 ton) F4. Squid jigging and torch light net for saury F5. Other distant water fisheries O2. Purse seine for mackerel (Set) O7. Torch light net 9 O7-1. (10-50 ton) O7-2. ( ton) O1. Drag net 11 O1-1. (10-50 ton) O1-2. ( ton) O1-3. ( ton) O6. Gill net 14 O6-1. (10-50 ton) O6-2. ( ton) O4. Tuna long line 16 O4-1. (10-50 ton) O4-2. ( ton) O5. Misc. fish long line 18 O5-1. (10-50 ton) O5-2. ( ton) O8. Pole and lines boote 20 O8-1. (0-10 ton) O8-2. (10-50 ton) O8-3. ( ton) O9. Other offshore fisheries C5. Set net C4. Torch light net 25 C4-1. (power) C4-2. (0-10 ton) C2. Gill net 27 C2-1. (power) 7,707 5, C2-2. (0-10 ton) C3. Pole and lines boote 2,557 1, C1. Long line 30 C1-1. (power) 1, C1-2. (0-10 ton) 1, C6. Other coastal fisheries 4,396 4, Idling Percentage (C) = (A-B)/A PAGE 10

11 Table 3b. Aquaculture Area for Various Fish Species in Taiwan (2000) Unit: Hectare Various Production Activities for Aquaculture Fish Species - Farming in Various Fish Pond Aquaculture Area (A) Suspending Area (B) Actual Aquaculture Area (C)=(A)- (B) 1. Tilapia - brackish water pond Tilapia - fresh water pond 7, , Carp - fresh water pond 3, , Eel - brackish water pond Eel - fresh water pond 2, , Sea perch - brackish water pond Sea perch - fresh water pond Loach - fresh water pond Milkfish - brackish water pond 10, , Milkfish - fresh water pond 3, , Sea bream - brackish water pond Sea bream - fresh water pond Small bottom fish - brackish water pond 1, , Small bottom fish - fresh water pond Mullet - brackish water pond Mullet - fresh water pond Others fishes - brackish water pond Others fishes - fresh water pond Grass shrimp - brackish water pond 3, , Grass shrimp - fresh water pond Kuruma shrimp - brackish water pond Giant freshwater prawn - fresh water pond 2, , White leg shrimp - brackish water pond White leg shrimp - fresh water pond Other shrimp - brackish water pond Other shrimp - fresh water pond Serrated crab - brackish water pond Serrated crab - fresh water pond Oyster - marine culture 11, , Hard clam - marine culture 1, , Hard clam - brackish water pond 4, , Small abalones - marine culture Small abalones - brackish water pond Other shellfishes - marine culture Other shellfishes - fresh water pond 1, , Other aquatic animals - brackish water pond Other aquatic animals - fresh water pond Source: Fisheries Yearbook, Fisheries Administration, Council of Agriculture, Executive Yuan, Taiwan, PAGE 11

12 Table 4. The Comparison of the Monthly Average Price Range of Major Common Fish Species in China and Taiwan from January 2000 to September 2001 China Taiwan Fish Species Average PricesImport Prices Highest Price Lowest Price (NT$/Kg) (NT$/Kg) (NT$/Kg) (NT$/Kg) CARP CRAB GIANTSHMP HAIRTAIL KURUSHMP OYSTER MULLET POMFRET SCAD SEAPERCH MACKEREL SQUID Source: INFOFISH, FAO, Table 5. Impacts of the WTO Tariff Reduction on the Output of the Fisheries Sector in Taiwan by incorporating the Effect of China s WTO Accession Fishing Gears Base Scenario 1. WTO Agreement in 2004 Scenario 2. China s Accession with Highest Level in 2004 Price Scenario 3. China s Accession with Lowest Price Level in 2004 Distant Water Fishery Offshore Coastal Fishery Aquaculture Aggregated Fishery Sector Output (M.T.) 859,921 Revenue (1,000 NT$) 69,772,587 Cost (1,000 NT$) 49,197,755 Profit (1,000 NT$) 20,574,832 Output (M.T.) 166,729 & Revenue (1,000 NT$) 15,994,338 Cost (1,000 NT$) 10,357,442 Profit (1,000 NT$) 5,636,896 Output (M.T.) 237,747 Revenue (1,000 NT$) 30,364,920 Cost (1,000 NT$) 28,599,673 Profit (1,000 NT$) 1,765,248 Output (M.T.) 1,264,397 Revenue (1,000 NT$) 116,131,845 Cost (1,000 NT$) 88,154,870 Profit (1,000 NT$) 27,976, PAGE 12

13 Table 6. Impacts of the WTO Tariff Reductions on the Input Factors of the Fishery Sector in Taiwan by Incorporating the Effect of China s WTO Accession Fishing Gears Base Scenario 1. WTO Agreement in 2004 Scenario 2. Scenario 3. Incorporating China s Incorporating China s Accession with Accession with Highest Price Lowest Price Level Level Employment (1,000 person day/year) Total 47, Distant Water Fisheries 5, Offshore/Coastal Fisheries 7, Aquaculture 33, Wage (NT $/ person day) Distant Water Fisheries 1, Offshore/Coastal Fisheries Aquaculture Marine Culture 13, Land (ha.) Blackish Water Ponds 25, Fresh Water Ponds 15, ,000 ton Number of ton Fishing Vessel of Distant ton Water Fishery Total Fishing Vessels 1, ton Number ton. of 1, Fishing Vessel 0-10 ton. of the Offshore 3, and Coastal Powered Craft 5, Fishery Purse Seine for Mackerel Total Fishing Vessels 10, PAGE 13

14 Table 7. Impacts of the WTO Tariff Reductions on Each Fish Species in Taiwan by Incorporating the Effect of China s WTO Accession Groups Fish Species BASE (M.T.) Scenario 1. WTO Agreement in 2004 Scenario 2. Scenario 3. China s China s Accession Accession with with Lowest Price Highest Price Level Level Export Oriented Fish Species Domestic Consumption Fish Species Aquaculture Fishes Shellfish Shrimp SCAD 19, % -9.18% % MACKEREL 23, % % % SKIPJACK 199, % -0.75% -0.92% TUNA 239, % -0.04% -0.05% SQUID 237, % -0.01% -0.01% CROAKER 6, % % % SPALAGIC 9, % -8.96% -8.94% SBOTTOM 17, % -7.72% % MULLET 2, % % % POMFRET 7, % % % SAURY 35, % -1.36% -1.57% HAIRTAIL 6, % % % DORADO 4, % -1.41% -1.72% SARDINE 3, % % % OTHMACK 11, % -8.02% -9.11% MARLIN 41, % -0.78% -0.78% SHARK 46, % -1.96% -2.27% COD % % % OTHFISH 68, % % % OTHCEPHAO 12, % % % OTHSHELL % 0.00% 0.00% TILAPIA 49, % 0.00% 0.00% CARP 15, % % % EEL 30, % 0.00% 0.00% SEAPERCH 3, % -0.08% % OTHFRESH 6, % 0.00% 0.00% MILKFISH 39, % 0.00% 0.00% SEABREAM 17, % % % OTHERB 3, % -0.05% -0.74% GRASSHMP 3, % -0.03% -0.03% KURUSHMP 8, % -9.59% % GIANTSHMP 8, % 0.00% % LOBSTER % % % WHITESHMP 2, % 0.00% 0.00% and OTHSHMP 12, % -5.58% -7.15% CRAB 7, % -8.20% % OYSTER 19, % % % CLAM 26, % 0.00% 0.00% SABALONE 2, % 0.00% 0.00% WATERCLAM 11, % % % PAGE 14