Impacts of the ECFA on seaborne trade volume and policy development for shipping and port industry in Taiwan

Abstract

This paper uses a global computable general equilibrium model, global trade analysis project and a value-to-volume conversion to arrive at quantitative estimates of the new seaborne cargo volumes resulting from a free trade agreement between Taiwan and China, namely, the Economic Cooperation Framework Agreement (ECFA). The approach is designed to model asymmetric impacts of tariff removal and economy-wide interactions caused by the ECFA arriving at estimation in cargo value flows. Then a scientific approach is developed to convert the estimated cargo value flows into volume flows. The analysis concludes that in terms of total trade value, the ECFA liberalisation would induce a trade creation effect across the Strait of more than US$ 30 billions. There is an increase of US$ 26.04 billions in exports to China, which is much higher than imports from China (US$ 4.67 billions). Regarding the converted trade volume, the exports of uncontainerisable and containerisable cargo to China increase by 0.37 and 5.12 million tons (0.43 million TEUs), respectively. The increases in imports from China are relatively minor at 0.19 and 0.75 million tons (0.06 million TEUs) of uncontainerisable and containerisable cargo. Policy implications and suggestions for shipping and port industry are provided accordingly.

The Impact of Global Protectionism on Port Logistics Demand

“…According to the UNCTAD [7], total volumes of 11 billion tons were handled in 793.26 million TEUs. A simple average of Cheong and Suthiwartnarueput [31] for Korea and Lee et al [62] for Taiwan was 16 tons, which is heavier than this paper. For reference, the gross weight of a loaded container should be less than 25 tons).…”

“…Based on previous studies, the levels of global protectionism as a tariff and non-tariff trade barrier (tariff equivalent) are assumed, which will be assigned to the dynamic CGE model to estimate the impact on the global trade flow. Trade-cargo-container conversion explored by Lee et al [62] for the first time in academic papers, as well as Cheong and Suthiwartnarueput [31] and Cheong and Cho [63] will be applied to trade estimates to calculate the impact on global logistics demand. Major findings using the trade-cargo-container conversion approach is summarized in Table 1.…”

Economic impact of cruise industry using regional input–output analysis: a case study of Incheon

“…Y.-T. Chang et al for impact analysis of the maritime sector (Danielis and Gregori 2013;Kwak, Yoo, and Chang 2005;Lee and Yoo 2014;Morrissey and O'Donoghue 2013;Van Der Linden 2001) compared with the latter (Lee, Wu, andLee 2011, 2012). I-O and CGE approaches are similar in terms of questions addressed, data requirements, and the range of application (Lee, Lee, and Chen 2012).…”

The Social Investment Capital and the Cargo Volume Transported by Sea: A VAR Approach for Vietnam

“…Those papers focus on the relationship between the national or international sea transported volume and some main national industries or factors. Tsung-Chen Lee, Chia-Hsuan Wu, and Paul T.-W. Lee have cited their analysis in the paper "Impacts of the ECFA on seaborne trade volume and policy development for shipping and port industry in Taiwan" (2011) [1]. This paper used a global computable general equilibrium model, a global trade analysis project, and a value-to-volume conversion to arrive at quantitative estimates of the new seaborne cargo volumes resulting from a free trade agreement between Taiwan and China-namely, the Economic Cooperation Framework Agreement (ECFA).…”