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Trade Policy Reforms and the Structure of Protection in Vietnam

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  • Prema-chandra Athukorala

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Abstract

This paper examines the current state of the trade policy regime in Vietnam against the backdrop of market-oriented policy reforms undertaken over the past one-and-a-half decades. The core of the paper is an in-depth analysis of the structure of protection, focussing on both incentives for import-competing production the bias in the incentive structure against export production compared to import-competing production. It is found that, despite notable reform efforts, the structure of protection in Vietnam is still out of line with that of the major trading nations in the region, in terms of the level and the inter-industry dispersion of nominal and effective protection rates. There is a clear ani-export bias in the incentive structure, even though the degree of the bias has considerably declined over the years. There is no evidence to justify the existing protection structure on grounds of infant industry protection or employment generation.

Suggested Citation

  • Prema-chandra Athukorala, 2005. "Trade Policy Reforms and the Structure of Protection in Vietnam," Departmental Working Papers 2005-06, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2005-06
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    References listed on IDEAS

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    1. Hakkala, Katariina & Kokko , Ari, 2007. "The State And The Private Sector In Vietnam," EIJS Working Paper Series 236, Stockholm School of Economics, The European Institute of Japanese Studies.
    2. Auffret, Phillipe, 2003. "Trade reform in Vietnam : opportunities with emerging challenges," Policy Research Working Paper Series 3076, The World Bank.
    3. David Greenaway & Chris Milner, 2003. "Effective Protection, Policy Appraisal and Trade Policy Reform," The World Economy, Wiley Blackwell, vol. 26(4), pages 441-456, April.
    4. Hill, Hal, 2000. "Export Success Against the Odds: A Vietnamese Case Study," World Development, Elsevier, vol. 28(2), pages 283-300, February.
    5. Prema-chandra Athukorala & Hal Hill, 2010. "Asian trade: long-term patterns and key policy issues," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 24(2), pages 52-82, November.
    6. Prema-chandra Athukorala, 2008. "Export Performance in the Reform Era:Has India Regained the Lost Ground?," ASARC Working Papers 2008-03, The Australian National University, Australia South Asia Research Centre.
    7. James Riedel, 1993. "Vietnam: On the Trail of the Tigers," The World Economy, Wiley Blackwell, vol. 16(4), pages 401-422, July.
    8. Arvind Panagariya, 1994. "East Asia and the New Regionalism in World Trade," The World Economy, Wiley Blackwell, vol. 17(6), pages 817-839, November.
    9. Richard G. Harris & Peter E. Robertson & Melissa Wong, 2007. "Analyzing Economy Wide Effects of Trade Liberalisation on Vietnam using a Dynamic Computable General Equilibrium Model," Discussion Papers 2007-24, School of Economics, The University of New South Wales.
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