A Quantitative Evaluation of Vietnam's Accession to the ASEAN Free Trade Area
This paper analyses the impacts of Vietnam's ASEAN Free Trade Area(AFTA) accession using a multi-region and muti-sector general equilibrium model. The static benefits of AFTA accession are likely to be relatively small. The gains from increased access to ASEAN makets would be small, and the would be offset by the costs of trade diversion. If Vietnam extends its AFTA commitments on a non-discriminatory basis, Vietnam's welfare would increase substantially. These gains are larger in part because the broader liberalization reduce the costly trade diversion and partly the resources are more efficiently allocate among Vietnam's industries. Although some currently protected industries would contract, the expansion of labor intensive manufacturing would bring greater benefits.
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