The Effects of afta on Macroeconomic Variables and Poverty: Evidence of Laos
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4.2. Characteristics of Lao Trade
Trade trends indicate that Laos has been facing a chronic trade deficit since introducing the New Economic Mechanism (NEM) in 1986, although the situation has recently changed. Laos imports various goods from other countries, from light and heavy manufacturing goods to processed food, textiles and clothing. Imports from Thailand account for 60% of all imported goods in 2008 (table 4-1; 4-2).
Laos’ main export commodities in 2004 were textiles and clothing, light manufacturing, and products of mining. However, the export structure of the country has since changed. The heavy manufacturing held the highest share of exports in 2008, higher than textiles and cloth and mining(table 4-3; 4-4). The main export destinations are Thailand, the European Union, East Asia and Vietnam. This shows that Lao trade is highly dependent upon Asian countries, especially its neighboring countries. As tariff rates for Laos and its trading partners are already low, Laos might not gain much from the affects of AFTA through tariff cuts.
Table 4-1. Imports by commodity (%) Sources: GTAP data base 7 and 8.
2004 2008
Grains and crops 1.74
1.48 Livestock and meat products 0.25 0.26
Mining and extraction 2.70
1.28 Processed food 15.03 10.12
Textiles and clothing 10.19
6.44 Light manufactring 18.44 26.77
Heavy manufacturing 46.58
49.13 Utilities and construction 0.53 2.46
Transport and communication 0.82
1.08 Other services 3.72 0.97
Total 100.00
100.00 16
Table 4-2. Imports by country of origin (%) Sources: GTAP data base 7 and 8.
Sources: GTAP data base 7 and 8.
2004
2008 Australia, New Zealand 1.87 1.20
Cambodia 0.06
0.00 East Asia 11.91 17.64
European Union 25 13.54
6.50 Indonesia 0.20 0.24
Latin America 0.26
0.10 Malaysia
0.29 0.62
Middle East and North Africa 0.95
0.10 North America 2.66 1.49
Philippines 0.03
0.03 Rest of Southeast Asia 0.01 0.01
Singapore 5.10
0.44 South Asia 0.44 0.27
Sub-saharan Africa 1.43
0.22 Thailand
53.67 66.06
Vietnam 5.70
4.16 Rest of the world 1.85 0.91
Total 100.00
100.00 2004
2008 Grains and crops 5.62 4.36
Livestock and meat products 0.90
0.46 Mining and extraction 9.00 10.07
Processed food 1.56
1.05 Textiles and clothing 27.26 12.74
Light manufacturing 21.20
9.73 Heavy manufacturing 4.91 42.87
Utilities and construction 1.11
2.72 Transport and communication 12.76 9.90
Other services 15.67
6.11 Total
100.00 100.00
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Table 4-4 Exports by country (%) Sources: GTAP data base 7 and 8.
5.0 SURVEY OF LITERATURE 5.1 Studies Conducted in other Developing Countries Empirical studies show that trade is important to stimulating economic growth (Winter, 2004; Dollar, 1992; Frankel and Rose, 1999).However, the impact of trade liberalization on poverty is complex. It has various channels through which it affects poverty such as economic growth and stability; households and markets; wages and employment and government revenue (Winter, 2004; Ravallion, 2006; Dollar and Kraay, 2004). There are several studies on the impacts of trade liberalization on macroeconomic variables and welfare in Asia 10 . For example, Park (2006) evaluated the effects of different East Asian Regional Trade Agreements (RTA) using a CGE model. He found positive effects of existing, proposed and forthcoming East Asian RTAs on the world and their members’ welfare. Park (2009) assessed the sustainability of regional trade agreements (RTAs) for East Asia using a multi-country and multi-sector CGE model. He found that expansionary ASEAN+3 RTA could be a sustainable policy option because the members will gain significantly positive impacts and its effects are equitable gains between members. In addition, the effect onworld welfare would also be positive.
10 Lakatos and Walmsley (2012) also estimated the effect of the ASEAN-China free trade agreement using GTAP model. Abbott (2008) examined the relationship between trade and development in Vietnam applying CGE model. He found out that trade could fosters growth and development in Vietnam 2004 2008
Australia, New Zealand 0.64
0.78 Cambodia
0.05 0.01
East Asia 7.11
15.75 European Union 25 46.29 24.65
Indonesia 0.14
0.38 Latin America 0.97 1.01
Malaysia 0.16
2.49 Middle East and North Africa 2.34 0.50
North America 11.16
7.67 Philippines 0.05 0.07
Rest of Southeast Asia 0.00
0.01 Singapore 0.53 0.50
South Asia 0.39
0.78 Sub-sahara Africa 0.55 0.93
Thailand 15.79
27.87 Vietnam
10.63 13.31
Rest of the world 3.20
4.06 Total
100.00 100.00
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However, there are still few studies on the impact of AFTA on individual economies of ASEAN members 11 . For instance, Athukorala and Menon (1997) examined the implications of the formation of the AFTA for FDI flows and trade patterns in the region. Fukase and Winters (2003) examined the three channels of AFTA affecting growth in new member countries through: knowledge and productivity; the accumulation of physical and human capital; and accelerated domestic reform. Heinrich and Konan (2001) analyzed the impact of AFTA on foreign investment. Reduction of regional trade barriers could create new attractive investment destinations in ASEAN. Khan and Tongzon (2005) estimated the revenues losses of the CLMV countries (Cambodia, Laos, Myanmar, and Vietnam) from implementing AFTA. It is evident that the CLMV countries will face significant losses from customs revenues from AFTA. However, government revenues (tax and non-tax) are likely to rise in CLMV countries. In addition, Ariyasajjakorn et al. (2009) analyzed the five simulation scenarios of ASEAN and ASEAN PLUS on macroeconomic variables and poverty in ASEAN and outside ASEAN countries. It shows that AFTA PLUS tendsto increase output of capital-intensive goods more than labor-intensive goods. Therefore, less developed countries like Laos tend to receive smaller benefits compared to other countries. AFTA PLUS tends to widen the income gaps between high-income and low-income households across ASEAN countries.
Despite these wider studies on economic tradeoffs, there are few on the relationship between trade liberalization and poverty in Asia. Various studies have used a CGE model to examine the impact of trade liberalization on poverty in developing countries. However, their results regarding the impact of trade liberalization on poverty are mixed. The positive impacts of trade liberalization on poverty could found in Cororaton et al.(2005) for the Philippines; Ianchovichina and Martin (2001) for China; and Fujii and Roland-Holst (2007) for Vietnam; Cororaton and Cockburn (2007) for the Philippines; and Hartono et al. (2007) for Indonesia. On the other hand, some studies found negative impacts from trade liberalization on poverty. For instance, Chaipan et al. (2006) in Thailand andCorong (2007)inthe Philippines found that trade liberalization may even increase poverty. Chaipan, et al (2007) analyzed the impact of economic partnership agreements on the Thai economy. The results showed that the FTA would stimulate growth, investment and welfare for Thailand. However, the impact on income distribution varied due mainly to patterns of production and trade in the partner countries.Some researchers also argue that income distribution impacts from trade liberalization may vary depending on various factors including characteristics of the agreement and the size of the trading partner (Sudsawasd&Mongsawad, 2007; Park, 2007; Plummer, 2007). Yüklə 470,92 Kb. Dostları ilə paylaş:
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