vietnames e agriculture and global integration
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Vietnames e agriculture and global integration. David Vanzetti and Pham Lan Huong Australian National University and independent consultant. National CGE Workshop Melbourne, 7 th October 2013. Integration and structural adjustment. - PowerPoint PPT PresentationTRANSCRIPT
Vietnamese agriculture and global integration
David Vanzetti and Pham Lan Huong Australian National University and independent consultant
National CGE WorkshopMelbourne, 7th October 2013
Integration and structural adjustment
• Vietnam is signing up to bilateral, regional and multilateral trade agreements
• Structural adjustment– the movement of factors of production
(capital, labour and land) between sectors.• Declining sectors?• Unemployment of factors, particularly
labour?2
Objectives
• Economic integration (four FTAs)• Assess macro and sectoral impacts• Identify need for structural
adjustment
3
Global general equilibrium model
• GTAP• Version 8, base 2007• Bilateral trade and tariffs (2010)• Includes preferential tariffs (needed for FTAs)• Whole economy• Includes resource (land, labour, capital, natural
resources) constraints• Limitation - each country: one region, one
household
4
Scenarios
• Four FTAs• AFTA• China • Korea• Japan
• All simultaneously• Each FTA without exemptions
5
Methodology
• Based on negotiated FTA schedules• Specify bilateral tariff cuts for 5113 products• Aggregate (trade weighted) to 24 sectors by
19 regions using TASTE• Specify baseline growth assumptions• Specify labour and capital market
assumptions• Simulate• Report
6
Exemptions
• Scheduled tariff cuts have exemptions for sensitive products
• Few in number but cover large volume of trade
• These differ by partner• Specify HS 6 level tariff cuts (5113
products) from bilateral applied tariff schedules as negotiated
7
Sectoral coverage
Primary ProcessedRice SugarVegetables fruit and nuts BeefCereal grains nec Pork and poultryCane sugar Dairy productsOther crops Other processed agricultureOilseeds TextilesCattle Motor vehicles and other transOther aninmal products ManufacturesRaw milk ElectronicsForestry Transport & communicationsFishing Business servicesPetroleum and coal products Services and activities NES
8
Reported results
• Welfare (national income) • Imports• Exports• Employment and wage rates• Tariff revenue• Sectoral effects (production and trade)
9
Baseline
10
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20170
10000
20000
30000
40000
50000
60000
70000
80000
90000
ProjectedSimulated
Historical Projection
Deviation
Schematic representation. Not to scale.
Baseline in steps
112007 2012 2017
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
ProjectedSimulated
Historical Projection
Deviation
Change in FTA tariffs on Vietnam’s exports
12
Rice Veg
Cereals
Crops
Oilsee
dsCatt
le
Animal
produ
ctsSug
arBee
f
Pork&Pou
ltDair
y
Proc. A
g0
5
10
15
20
25
30
35
40
BaseFinal
%
Source. GTAP 2010.
Change in tariffs on Vietnam’s imports
13
Rice Veg
Cereals
Crops
Oilsee
dsCatt
le
Animal
produ
ctsSug
arBee
f
Pork&Pou
ltDair
y
Proc. A
g0
5
10
15
20
25
30
BaseFinal
%
Results
• Macro• Welfare• Exports• Imports• Tariff revenue• Real wages
• Agricultural sector• Output• Exports• Imports
14
Vietnam welfare gainsin 2017 relative to 2012
15
BA
SE
AFT
A
CH
N
JPN
KO
R
ALL
0
5000
10000
15000
20000
25000
30000
$m
Income growth important
Vietnam trade impactsin 2017 relative to base
16
AFT
A
CH
N
JPN
KO
R
ALL
02468
101214161820
ExportsImports
%
Growth in imports exceed imports
Vietnam trade balancein 2017 relative to base
17
AFT
A
CH
N
JPN
KO
R
ALL
-8000
-7000
-6000
-5000
-4000
-3000
-2000
-1000
0
$m
Welfare with and without exemptionsin 2017 relative to base
18
AFT
A
CH
N
JPN
KO
R
ALL
0
1000
2000
3000
4000
5000
6000
7000
ExemptNo exempt
$m
Japanese rice tariffs
Real wagesin 2017 relative to base
19
AFT
A
CH
N
JPN
KO
R
ALL
0
2
4
6
8
10
12
14
16
UnskilledSkilled
%
Fixed employment for skilled labour
Vietnam tariff revenuein 2017 relative to base
20
BA
SE
AFT
A
CH
N
JPN
KO
R
ALL
0
1000
2000
3000
4000
5000
6000
7000
8000
$m
Agricultural sector impacts
• Output• Exports• Imports• Use of land, labour and capital• Factor prices
21
Change in outputin 2017 relative to 2012
22
Ric
eVe
get..
.C
erea
...C
ane.
..O
ther
...O
ils...
Cat
tleO
ther
...R
aw ..
.Fo
re...
Fish
ing
Petr
o...
Suga
rB
eef
Pork
...
Dai
ry...
Oth
er...
Text
iles
Mot
or...
Man
u...
Elec
t...
Tran
...B
usin
...Se
rvi..
.
-20
0
20
40
60
80
100 Base ALL
%
TextilesCassava
Change in exportsin 2017 relative to 2012
23
Ric
e
Veg
Cer
eals
Cro
ps
Oils
eeds
Cat
tle
Ani
mal
pro
duct
s
Suga
r
Bee
f
Pork
&Po
ult
Proc
. Ag
-50
0
50
100
150
BaseALL
%
Cassava
Switch to cassava from other crops
Change in importsin 2017 relative to 2012
24
Veg
Cer
eals
Cro
ps
Oils
eeds
Cat
tle
Ani
mal
pro
duct
s
Suga
r
Bee
f
Pork
&Po
ult
Dai
ry
Proc
. Ag0
20
40
60
80
100
120
BaseALL
%
Processed agriculture.Feed.
Use of factors in agricultureChange in 2017 relative to 2012
25
Rice
Veg. fr
uit an
d nuts
Cereal
grains
nec
Cane s
ugar
Other c
rops
Oilsee
dsCatt
le
Pigs &
poult
ry
Raw m
ilk
Forestr
y
Fishing
Petrole
um et
cSug
arBee
f
Pork an
d chic
ken
Dairy p
roduc
ts
Other p
roc. A
g.
-30
-20
-10
0
10
20
30
40
50
60
70
Land Labour Capital
%
Factor pricesin 2017 relative to 2012
26
Land Unskilled labour
Skilled labour
Capital Natural Res.
-40
-20
0
20
40
60
80
100
BASEALL FTA
%
Summary of macro results
• Income growth important. Changes implemented against background of expanding economy
• Positive welfare effects (national income) from FTAs• Real wage increases• Tariff revenue reduced somewhat• Trade balance negative
27
Policy implications
• Income growth depends on capital (macro policy)• Non-tariff barriers still exist, and may increase• Structural adjustment manageable• Need flexible land, labour and capital markets• WTO virtually completed. No further tariff cuts• Ignored here other FTAs, such as EU, Trans Pacific
Partnership, Regional Comprehensive Economic Partnership
28
The End
29