A comparison of Indonesian and Vietnamese approaches to agriculture in the ASEAN-China FTA
Both Indonesia and Vietnam, as members of ASEAN, have negotiated a free trade agreement with China (ACFTA). ASEAN Member States can independently negotiate their tariff reductions. Both countries are generally aware of the opportunities access to the large Chinese market may present, but both are concerned to differing degrees about being flooded with Chinese imports, including agricultural products. As the time for implementation approaches, Indonesia has expressed a desire to renegotiate its tariff reduction schedules to protect sensitive sectors, including agriculture. By contrast, Vietnam, just over the border from China and with a history of informal trade, seems more accepting of the prospects. A global general equilibrium model, GTAP, is used to compare the potential impacts of the ASEAN-China Free Trade Agreement on the Indonesian and Vietnamese agricultural sectors. Tariff line data are aggregated to eight primary and four processed agricultural sectors. This enables the differential impact of separate sensitive sectors for Indonesia and Vietnam to be identified. The simulated results following full implementation indicate both countries would improve their trade and welfare if the agreement is implemented as negotiated and tariff cuts are effective, although the extent of exemptions for sensitive products represent differing degrees of missed opportunities for each country. At the sectoral level, both countries can expect some reductions, compared with the baseline, in output of some agricultural sectors, but generally these changes are relatively small unless significant non-tariff barriers are addressed. From an economic perspective, structural adjustment should not be constrained in such circumstances.
|Date of creation:||2011|
|Contact details of provider:|| Postal: AARES Central Office Manager, Crawford School of Public Policy, ANU, Canberra ACT 0200|
Phone: 0409 032 338
Web page: http://www.aares.info/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ags:aare11:101002. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.