Lao PDR Market Access Guide: Trading with ASEAN Dialogue Partners – Republic of Korea

Laos benefits from the comprehensive ASEAN-Korea Free Trade Agreement (AKFTA), which in large part has supported the fast growing exports of Laos to Korea. Since Laos became a member of ASEAN in 1997, its exports destined for Korea have increased 10-fold. That expansion is nearly twice as large as Lao exports to all destination and has contributed to Korea being one of its top 10 export destinations. How Lao Producers and Exporters Benefit from AKFTA - The AKFTA allows 90% of all products imported into Korea from Laos to enjoy duty-free treatment, and tariffs on the remaining 10% are being lowered to 0% to 10% by 2016. The Agreement also eliminates non-tariff barriers to trade like customs surcharges and import licensing; it facilitates trade in services, particularly communications and shipping between Korea and Laos; and it guarantees equal treatment on investments in Korea by Lao companies. - Without preferential market access, other foreign suppliers to Korea are subject to an average tariff of over 8%. This high level of protection gives Lao businesses a large competitive advantage over competitors who are not AKFTA members. - For agricultural products, Korea’s average tariff is 65% for non-AKFTA member countries. Lao businesses therefore have a huge competitive advantage in agricultural exports. - Korea is among the top countries having a highly conducive environment for doing business. Moreover, Korea’s logistics environment greatly facilitates trade. - Korea is one of the fastest growing markets in Asia. Two-way trade between Korea and ASEAN increased by nearly 30% in 2011, and is targeted to expand by another 20% by 2015. This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources

Viet Nam: Small Scale Technical assistance for Capacity Building of Ministry of Finance to Support Tariff, Industry and Subsidy Analysis for the WTO Accession

The present study seeks to provide quantitative tools to carry out industry-level assessments of tariff and subsidy reforms that will both support Viet Nam’s current WTO accession negotiations and provide needed capacity for analyzing alternative policy reforms. To this end, the present study elaborates modeling tools for production shift analysis and the calculations of trade tax revenue effects associated with tariff reform policies. It builds on the recent ADB-assisted study on the structure of protection for various industries, which provided estimates of tariff-related costs of inputs for industries and prices of outputs for import-substituting industries, as well as calculations of their effective rates of protection (ERP). In the present study we use the ERP estimates to examine industry-level output and employment adjustments likely to take place under a variety of tariff reforms. We also address subsidy issues and their incidence in different industries. The results of the present study provide detailed product and industry-specific information on the effects of implementing changes in the structure of protection and, as such, the emphasis is on a practical, action-oriented plan, rather than an academic study

East-West Economic Corridor (EWEC)Strategy and Action Plan

The aim of this study is to revise and update the strategy and action plan for the EWEC as a means of consolidating planning and programming activities by government authorities and development partners. It differs from the 2001 strategy and action plan in three ways. First, it shifts the vision of the corridor to the socio-economic development of the subregion with a poverty-based focus, linked closely to the other corridors and transport routes at the interchange, border and gateway nodes, as well as secondary and feeder roads offering access to markets for rural communities. Second, it focuses the action plan on a relatively few high-profile initiatives that have direct links to key strategic areas in private sector, social, environmental and multi-model transport development. Finally, it broadens the sector coverage to those of private sector, social and environmental development, while maintaining trade and investment, agriculture and agro-industry, tourism and infrastructure as core development areas

Economic Growth in Uzbekistan: Sources and Potential

his study provides an analysis of the sources of Uzbekistan’s economic growth, the challenges and opportunities for the private sector in those sectors, and policy measures that would support the expansion of the economy. It is specifically intended to provide an analysis of the macroeconomic issues surrounding the reforms needed to meet the Government's Living Standard Strategy (LSS) growth target, as well as to identify existing policy and structural constraints and macroeconomic policy reforms measures that would help to remove those constraints. The indicative forecasts of Uzbekistan’s economy presented in this report have been generating by two macroeconomic simulation models that were developed as part of the present economic growth analysis for Uzbekistan. The first is a Revised Minimum Standard Model - eXtended (RMSM-X) that provides a simple spreadsheet-based tool for feasibility and sustainability analysis of the economy of Uzbekistan. The present RMSM-X model for Uzbekistan has been modified from other models of this type in a number of ways to accommodate existing data constraints of the country. Essentially, a number of key economic indicators used in Uzbekistan replaced some of the standard indicators used in the RMSM-X model, while others used in the RMSM-X model for which data were not available in Uzbekistan needed to be eliminated and some of the relationships in the system altered to accommodate the changes. The second macroeconomic simulation model that has been developed for Uzbekistan also provides a parsimonious representation of the macro economy using a simple spreadsheet framework for making rational and consistent predictions about Uzbekistan’s overall economic activity, the standard components of the balance of payments, the expenditure concepts of the national accounts, and the financial sector balances. The model applies a conventional framework to the economic system and, as a policy-oriented system it incorporates key parameters for policy formulation

East-West Economic Corridor (EWEC)Strategy and Action Plan

The aim of this study is to revise and update the strategy and action plan for the EWEC as a means of consolidating planning and programming activities by government authorities and development partners. It differs from the 2001 strategy and action plan in three ways. First, it shifts the vision of the corridor to the socio-economic development of the subregion with a poverty-based focus, linked closely to the other corridors and transport routes at the interchange, border and gateway nodes, as well as secondary and feeder roads offering access to markets for rural communities. Second, it focuses the action plan on a relatively few high-profile initiatives that have direct links to key strategic areas in private sector, social, environmental and multi-model transport development. Finally, it broadens the sector coverage to those of private sector, social and environmental development, while maintaining trade and investment, agriculture and agro-industry, tourism and infrastructure as core development areas

Macroeconomic Dynamics of Egypt: An Integrated Approach to Trade and Exchange Rate Policy Reforms

The present study extends an earlier elasticities-absorption approach to the balance of payments to the analysis of the consequences of tariff reforms on the Egyptian macro-economy, particularly as it relates to fiscal revenue implications. From an analytical perspective, we use the Mundell-Fleming model to examine the effects of trade liberalization and exchange rate changes in an open macro-economy. The model is of an open economy in the familiar IS-LM framework that includes the determination of the trade and capital accounts of the balance of payments

Regional Economic Integration in Central Asia and South Asia

The Central and South Asia regions have a long history of trade relations. There have nearly always been movements of goods and people between the regions, which in turn have linked their cultural and religious ties and impacted political relations. Yet today’s trade between the two regions remains low and significantly below regional trade in Africa, the Middle East, Latin America and Southeast Asia. Using different measures of trade, we estimate that inter-regional trade is only between 0.2 and 4 percent of total trade to all destinations. Even within the regions, trade among countries remains low. Intra-regional trade in Central Asia is less than 5 percent and that of South Asia is 1.5 percent of trade with all countries. The present study explores opportunities and challenges for intra- and inter-regional trade in the Central and South Asia areas by analyzing a wide range of channels impacting trade. Trade enhancing channels are divided into two broad categories. The first set refers to disaggregated or product-level characterizations of trade affecting competitiveness and complementarities between trading partners within and between the regions. The second refers to price, non-price and structural determinants that tend to affect all products traded between countries. The analysis also includes a gravity model to gauge the effect of economic growth, distance and price, non-price and structural determinants of regional trade. The empirical results indicate that, under existing trade patterns, the potential value of trade in the two regions is nearly twice as large as the actual level. The finding is not surprising. Opportunities for regional trade abound and there are numerous policy initiatives that could be taken to help spur trade and investment in and between the two regions. Among the possibilities are regional value chains that could create large gains in terms of higher value additions to exports, technologies transfers and employment generation. The analysis of different types of value chains in this study categorizes industries according to their value added contribution to trade, and it prioritizes industries according to interests ranging from the diversification of industries across resource-intensive, labor-intensive, and technology-intensive industries, as well as the potential participation of Afghanistan due to its comparative advantages in products exported by the industries or its geographic location for transit trade. Based on quantitative analyzes of actual and potential channels of trade, the study ranks the pattern of trade in terms of its adaptability to intra- and cross-regional commerce in the Central and South Asia regions and its predilection for regional value chains. The ranking uses an innovative methodology that takes account of difference preference orderings of stakeholders, such as governments and development partners that have interests in pro-poor trade, or large companies that favor cross-border fragmentation of production for regional and global value chains. Ratings are classified into the following categories: trade complementarities, export diversification, comparative advantages, structural factors, intra-industry trade, price competitiveness, trade costs, economic growth; and regional value chains. The baseline ratings suggest the following: First, the larger economies have higher ratings than the smaller, less developed ones, suggesting that size and level of development matter in the development of regional trade. Second, among the different channels of regional trade development, the most effective ones are (i) measures that promote price competitiveness; (ii) intra-industry trade; (iii) trade complementarities; and (iv) economic growth. Third, the effectiveness of country-specific measures differ, as for example in Afghanistan, where the trade enhancing channels that matter the most are structural factors, price competitiveness and trade complementarities with other countries in South Asia and with Central Asia in general. These findings have important implications for the ability of different trade-related policies, programs and institutional mechanisms to successfully promote greater commerce within and across the two regions. Each of these mechanisms has costs associated with them and different types of mechanisms can be programmed on the basis of their ease of implementation and impact potential. The material in this study is designed in such a way as to provide practical knowledge and methods for businesses to take advantage of Central and South Asia regional opportunities; analytical tools for policymakers and researchers; and policy and program recommendations for governments and development partners. It should be of interest to businesses, governments, international development partners, policymakers and researchers, and others concerned with Central and South Asia’s trade and the potential for developing value chains or so-called ‘trade in tasks’ across the two regions

Partial-Equilibrium and Industrial-Shift Analysis of the U.S.–Colombia FTA

The present study aims to assess Colombia’s interests in the FTA with the United States. The approach is based on a partial equilibrium approach to measuring the effects of trade liberalization between Colombia and the United States on both the trade balance and industrial production and employment

Vietnam’s Export Competitiveness: Trade and Macroeconomic Policy Linkages

The study aims to identify macro and micro-economic measures that promote the international competitiveness and export growth of Vietnam, thereby raising living standards and improving welfare. Apart from investigating macro and micro-economic aspects affecting the trade environment, the study describes key characteristics of Vietnam’s export structure and performance over the last decade based on national and partner-country trade information, it analyzes static and dynamic aspects of Vietnam’s comparative advantage, it evaluates the compatibility of exports in their major markets, and it assesses the policy-performance links in the last decade to draw lessons for future trade and macroeconomic policies