The Impact of Taiwan's WTO Entry on Its Domestic Agriculture Sector

This study used a multi†sector CGE model, derived from ORANI and implemented by the GEMPACK software, to evaluate the impact of 44.67%, 35.9% and 40.8% tariff reductions on agriculture, livestock, and fishery, respectively, two years after Taiwan's accession to the WTO in 2002. Results show that the value of domestic agricultural, livestock and fishery production would be reduced by NT$45.2, 24.1 and 3.9 billion, respectively, under the standard neo†classical model. Since it is difficult for industrial sectors to hire the unskilled elderly workers who lost their jobs in the agricultural, livestock, and fishery production sectors, a partial equilibrium model, specified in this study by restricting transferability of primary input from agriculture, livestock, fishery, and processing sectors to the secondary industrial sectors, will be more realistic for Taiwan's social†economic structure after entering WTO. The results from the structuralist model show that the value of domestic agricultural, livestock, and fishery production will ber†educed by NT$47.4, 26.4 and 4.4 billion, respectively, suggesting that those sectors in Taiwan would suffer more severely if their primary input (i.e. labor) lacked mobility.