Reducing Tariffs According to WTO Accession Rules: The Case of Vietnam

26 Pages Posted: 8 Nov 2011

See all articles by Henrik Barslund Fosse

Henrik Barslund Fosse

DASTI; Copenhagen Business School

Pascalis Raimondos

Queensland University of Technology - School of Economics and Finance; Copenhagen Business School - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: October 31, 2011

Abstract

When Vietnam entered WTO in 2007 it was granted an accession period up to 2014. During this period tariffs would have to fall according to the accession agreement. This paper evaluates this 2007-2014 trade liberalization by building an applied general equilibrium model and calibrating it to the Vietnamese data. The model pays careful attention to the fact that Vietnam has many state-owned enterprises that do not behave in a profit maximizing way. The model simulations show that the WTO imposed tariff reforms will reduce the overall welfare level of the Vietnamese households. Moreover, the biggest loss of income will take place among the poor rural households in Vietnam. We propose other tariff reforms that both raise overall welfare and reduce income inequality.

Keywords: Vietnam, WTO accession, trade reforms, state-owned enterprises

JEL Classification: F140, F170, C680

Suggested Citation

Fosse, Henrik Barslund and Raimondos, Pascalis, Reducing Tariffs According to WTO Accession Rules: The Case of Vietnam (October 31, 2011). CESifo Working Paper Series No. 3628, Available at SSRN: https://ssrn.com/abstract=1956495

Henrik Barslund Fosse

DASTI ( email )

Bredgade 40
Copenhagen, 2100
Denmark

Copenhagen Business School ( email )

Solbjerg Plads 3
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Denmark

HOME PAGE: http://www.cbs.dk/staff/hf

Pascalis Raimondos (Contact Author)

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Copenhagen Business School - Department of Economics ( email )

Solbjergs Plads 3
DK-2000 Frederiksberg C
Denmark
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Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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