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Trade policy reform in the East Asian transition economies

  • Martin, Will

The performance of the East Asian transition economies in export and income growth has been strikingly better than that of countries in Eastern Europe and the former Soviet Union. The East Asian economies have achieved remarkably high growth rates in outputs and exports without the often large declines in output and exports observed in Eastern Europe and the former Soviet Union. East Asian reformers have successfully made many of the parallel changes needed in both domestic and trade policies to secure export and income growth. (It makes no sense, for example, to introduce the trade policy instruments of a market economy when the domestic economy is still based on central planning.) But there has been no single magic formula for their success. The author discusses what each of the economies (Cambodia, China, Lao People's Democratic Republic, and Vietnam) has done. China experienced an extended transition process; the transition ws much shorter in other East Asian transition economies--especially Cambodia. Several of the East Asian transition economies used accession to a regional arrangement as part of their reform strategy. China focused mainly on unilateral reforms and, more recently, reforms associated with its accession to the World Trade Organization. Most have made extensive use of policies to attract foreign investment and to mitigate the burden of protection on manufacturing exporters. Most of the remaining trade policyproblems, although difficult, appear to be problems more of development than of transition.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2535.

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Date of creation: 31 Jan 2001
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Handle: RePEc:wbk:wbrwps:2535
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  1. Fukase, E. & Martin, W., 2001. "Free Trade Area Membership as a Stepping Stone to Development: The Case of ASEAN," World Bank - Discussion Papers 421, World Bank.
  2. Martin, Will, 1993. "Modeling the post-reform Chinese economy," Journal of Policy Modeling, Elsevier, vol. 15(5-6), pages 545-579.
  3. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  4. Ben-David, D., 1995. "Trade and Convergence Among Countries," Papers 35-95, Tel Aviv.
  5. Michalopoulos, Constantine, 1999. "The integration of transition economies into the world trading system," Policy Research Working Paper Series 2182, The World Bank.
  6. Ventura, Jaume, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 57-84, February.
  7. Sicular, Terry, 1988. "Plan and Market in China's Agricultural Commerce," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 283-307, April.
  8. Sebastian Edwards, 1997. "Openness, Productivity and Growth: What Do We Really Know?," NBER Working Papers 5978, National Bureau of Economic Research, Inc.
  9. Andrew B. Bernard & J. Bradford Jensen, 2000. "Exporting and Productivity," Working Papers 00-07, Center for Economic Studies, U.S. Census Bureau.
  10. Finger, Michael J. & Schuler, Philip, 1999. "Implementation of Ururguay Round commitments : the development challenge," Policy Research Working Paper Series 2215, The World Bank.
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