Before Taiwan became the 144th member of the WTO in 2002, its fishery sector was protected by high import tariffs. As a member of the WTO, Taiwan has to phase out the import tariffs on fishery imports and to allow imports of low-priced fishery products from China. In this study, import price-quantity substitution elasticities are estimated using monthly data on import quantities and prices, and domestic auction prices from the period from January 1991 through October 2001. These substitution elasticity estimates were used to examine the impacts of tariff reductions on production, cost, labor, domestic prices, producer and consumers welfare in 2004. The impact of imports of the low-priced fishery products from China on domestic fishery were also evaluated using a fishery sector general equilibrium model. Compared to 2001, empirical results show that, as a result of reduced import duty, the total production of Taiwan's fishery sector would decreased by 14,770 MT or NT $3.1 billion by 2004. The aquaculture sector had to bear the heaviest losses, its production would decrease by 14,760 MT or NT $2.768 billion. Consequently, aquaculture farming in Taiwan would not be profitable any longer. In order to find areas in which the industry can operate profitably and compete with the Chinese imports, results show that Taiwan's fishery industry needs to focus on the high-quality and high-price fishery products and differentiate these fishery products from the cheap imports from China.