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

11 Pages Posted: 19 Apr 2012

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: May 2012

Abstract

When Vietnam joined the World Trade Organization (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. The model simulations show that the WTO tariff reductions will reduce overall welfare. Moreover, the biggest loss will take place among the poor rural households in Vietnam. This paper proposes other tariff reforms that will both raise overall welfare and reduce income inequality.

Suggested Citation

Fosse, Henrik Barslund and Raimondos, Pascalis, Reducing Tariffs According to WTO Accession Rules: The Case of Vietnam (May 2012). Review of Development Economics, Vol. 16, Issue 2, pp. 331-341, 2012, Available at SSRN: https://ssrn.com/abstract=2042428 or http://dx.doi.org/10.1111/j.1467-9361.2012.00665.x

Henrik Barslund Fosse (Contact Author)

DASTI ( email )

Bredgade 40
Copenhagen, 2100
Denmark

Copenhagen Business School ( email )

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

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

Pascalis Raimondos

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
+45 38 152 594 (Phone)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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

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