Location of Repository

A comparison of Indonesian and Vietnamese approaches to agriculture in the ASEAN-China FTA

By David Vanzetti, Nur Rakhman Setyoko, Nguyen Ngoc Que and Ray Trewin

Abstract

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.International Relations/Trade,

OAI identifier:

Suggested articles

Preview

Citations

  1. (2006). Australia and New Zealand Bilateral CEPs/FTAs with the ASEAN countries and their implications on the AANZFTA‖,
  2. (2010). Australia‘s quarantine mess: The case of New Zealand apples‖, Unpublished Policy Discussion Paper,
  3. (2010). Bilateral and Regional Trade Agreements‖, Research Report,
  4. (2008). Domestic Dynamics of Preferential Services Liberalisation – Experience of Australia and Thailand‖ chapter for a book on ―Liberalising trade in services: bilateral, regional and multilateral perspectives in the st century‖, Marchetti and Roy (eds)
  5. (2009). Estimates of Global Distortions to Agricultural Incentives 1955-2007‖, World Bank,
  6. (2005). Food Policy and Poverty in Indonesia: A General Equilibrium Analysis‖,
  7. (2008). Globalisation and the Political Economy of Trade Liberalisation in the BRIICS‖, available in www.ecipe.org/people/razeen-sally/otherpublications/Globalisation%20and%20the%20Political%20Economy%20of%20Trade %20Liberalisation%20in%20the%20BRIICS.pdf.
  8. (2008). Is a Slowdown
  9. (2010). Policies for Agricultural Development, Poverty Reduction and Food Security‖, OECD Global Forum on Agriculture,
  10. (1997). Structure of GTAP", chapter 2, pages 38-46, in Global Trade Analysis: Modeling and Applications,
  11. (2010). Survey of recent developments‖,
  12. (2003). The Trade and Investment Effects of Preferential Trading Arrangements — Old and New Evidence‘, Productivity Commission Staff Working Paper,
  13. (2008). Trade Analysis Project
  14. (2008). Trade Policy, New Century: The WTO, FTAs and Asia Rising‖,
  15. (2010). World Tariff Profiles

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.