Viet Nam WTO Accession and Viet Nam WTO Accession and Implications for Agriculture Implications for Agriculture David Roland-Holst UC Berkeley MARD Workshop on GLOBALIZATION AND AGRICULTURAL DEVELOPMENT IN VIETNAM 13-14 December 2005 Nha Trang – Viet Nam
Outline Outline 1. Introduction and Overview 2. Economic Projections to 2020 3. Poverty and WTO Accession 4. Agricultural Services and WTO 5. Issues and Conclusions Slide 2 Roland-Holst
Introduction Introduction Vietnam’s WTO accession is a watershed event for the economy. It will offer unprecedented external market opportunities, But also unique opportunities for domestic reform. Our results indicate that external and domestic reform must go hand-in-hand if their full potential is to be realized. Slide 3 Roland-Holst
Trade and Economic Growth: Trade and Economic Growth: General Principles General Principles Quantity of Growth can be influenced by trade opening. Quality of Growth depends on many other policies. Important qualitative growth characteristics: 1. Diversification 2. Modernization 3. Poverty alleviation Slide 4 Roland-Holst
Trade, Human Resources, and Income Trade, Human Resources, and Income GDP Vietnam is far from realizing its trade potential. Population Indonesia Exports Malaysia Philippines Singapore Thailand Vietnam Slide 5 Roland-Holst
Domestic and External Reform Domestic and External Reform Examples of how domestic reform can facilitate readiness for WTO accession include, but are not limited to: 1. Harmonization of standards for commercial activity, including licensing, contracts and other legal standards. 2. Uniform and transparent product quality standards, including SPS and other health safety. 3. Removal of administered price systems and greater transparency in fiscal mechanisms. 4. Clear delineation of property rights, including uniform standards for ownership and transferability. 5. Agriculture-oriented policies that promote productivity, including consolidation, technology transfer/adoption, and credit markets. 6. Uniform and transparent labor standards and residential policies. 7. Public-private parity in credit acces and price. 8. Improved transparency and reporting of national economic data. 9. Private sector development (ISO and other business standards). 10.Financial sector reform and regulatory standardization, especially in commercial banking, insurance, and asset markets. Slide 6 Roland-Holst
Economic Projections to 2020: Economic Projections to 2020: Modeling Strategy Modeling Strategy Policy makers need visibility. Economic models can make a lasting contribution to this under three conditions: 1. They incorporate advanced data and methods. 2. Their results are transparent. 3. They are locally implemented. In order to achieve these three goals, we developed a modeling facility with a user-friendly interface and a sophisticated analytical kernel . Slide 7 Roland-Holst
Schematic Modeling Facility Schematic Modeling Facility Econometric Social Accounting Parameter Development Matrix Estimates Baseline Policy Scenarios CGE Model Simulation Calibration Data Numerical Graphical Output Analysis Results Box Color Key to Software Implementation: Green – Microsoft Excel Yellow – GAMS Slide 8 Roland-Holst
Scenarios Scenarios Baseline: calibrated trends without reform or WTO. 1. WTO: External reform only, via WTO accession. 2. Reform-WTO: Combined external-domestic reform. 3. Reform-UTL: Domestic reform with unilateral 4. removal of all Vietnamese import protection. AgK: Reform, WTO accession, and 2% annual 5. capital productivity growth in agriculture. AgTFP: Identical to AgK, except Total Factor 6. productivity in Vietnamese agriculture grows by 2% annually. Slide 9 Roland-Holst
Trade and Economic Growth: Trade and Economic Growth: Real GDP to 2020 Real GDP to 2020 280 260 240 220 Baseline 200 WTO ReformWTO 180 RefUTL 160 AgK AgTFP 140 120 100 2000 2005 2010 2015 2020 Indexed to year 2000=100. Slide 10 Roland-Holst
Real Agricultural Output Real Agricultural Output (percentage changes from Baseline in 2020) (percentage changes from Baseline in 2020) 60 Rice 50 Raw Rubber Coffee Bean 40 Sugar Cane Other Crops 30 Pigs Poultry 20 Livestock I rrigation Serv 10 Other Ag Serv Forestry 0 Fishery -10 WTO ReformWTO RefUTL AgK AgTFP Slide 11 Roland-Holst
Poverty and Related Variables Poverty and Related Variables Ha Giang Cao Bang Ha Giang Ha Giang Cao Bang Ha Giang Cao Bang Cao Bang Lao Cai Tuyen Quang Tuyen Quang Lao Cai Lao Cai Tuyen Quang Lao Cai Tuyen Quang Bac Thai Lai Chau Bac Thai Bac Thai Lai Chau Lang Son Lai Chau Bac Thai Lai Chau Yen Bai Lang Son Lang Son Lang Son Yen Bai Yen Bai Yen Bai Vinh Phu Ha Bac Quang Ninh Vinh Phu Vinh Phu Son La Ha Bac Quang Ninh Vinh Phu Ha Bac Quang Ninh Ha Bac Quang Ninh Son La Son La Ha Tay Son La Hai Hung Ha Tay Ha Tay Ha Tay Hai Hung Hai Hung Hai Hung Hoa Binh Hoa Binh Hoa Binh Hoa Binh Thai Binh Thai Binh Nam Ha Thai Binh Ninh Binh Thai Binh Nam Ha Ninh Binh Nam Ha Nam Ha Ninh Binh Ninh Binh Thanh Hoa Thanh Hoa Thanh Hoa Thanh Hoa Nghe An Nghe An Nghe An Nghe An Ha Tinh Ha Tinh Ha Tinh Ha Tinh Quang Binh Quang Binh Quang Binh Quang Binh Quang Tri Quang Tri Quang Tri Quang Tri Thua Thien-Hue Thua Thien-Hue Thua Thien-Hue Thua Thien-Hue Quang Nam-Da Nang Favorable Quang Nam-Da Nang Quang Nam-Da Nang Quang Nam-Da Nang Quang Ngai Quang Ngai Quang Ngai Kon Tum Quang Ngai Kon Tum Kon Tum Kon Tum Binh Dinh Binh Dinh Binh Dinh Gia Lai Binh Dinh Gia Lai Gia Lai Gia Lai Phu Yen Phu Yen Phu Yen Dac Lac Phu Yen Unfavorable Dac Lac Dac Lac Khanh Hoa Khanh Hoa Dac Lac Khanh Hoa Khanh Hoa Lam Dong Ninh Thuan Song Be Lam Dong Ninh Thuan Lam Dong Ninh Thuan Ninh Thuan Song Be Song Be Ninh Thuan Ninh Thuan Dong Nai Binh Thuan Lam Dong Ninh Thuan Song Be Dong Nai Binh Thuan Dong Nai Binh Thuan Ninh Thuan Long An Tien Giang An Giang Dong Nai Binh Thuan Long An Tien Giang Dong Thap Ba Ria - Vung Tau Long An Tien Giang Kien Giang An Giang An Giang Dong Thap Ba Ria - Vung Tau Ben Tre Dong Thap Ba Ria - Vung Tau Kien Giang Can Tho Long An Tien Giang Kien Giang Ben Tre An Giang Ben Tre Can Tho Kien Giang Tra Vinh Dong Thap Ba Ria - Vung Tau Can Tho Kien Giang Kien Giang Tra Vinh Soc Trang Ben Tre Kien Giang Tra Vinh Can Tho Soc Trang Minh Hai Soc Trang Kien Giang Tra Vinh Minh Hai Minh Hai Soc Trang Minh Hai Poverty Specialization Mkt. Distance Ag TOT Slide 12 Roland-Holst
Poverty and Market Access 2: Poverty and Market Access 2: Dual Initial Conditions Dual Initial Conditions Poverty is more common Yet most of Vietnam’s poor live in remote areas near markets. Slide 13 Roland-Holst
Doha Holds Little Potential for Doha Holds Little Potential for Vietnam without WTO Accession Vietnam without WTO Accession Doha has a negligible but regressive effect, since there are few trade gains for a nonmember. (by province) 25.00 20.00 15.00 Percent Change in Poverty Rate 10.00 5.00 0.00 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 -5.00 -10.00 -15.00 -20.00 -25.00 Slide 14 Roland-Holst Baseline Poverty Rate
Poverty Rates and WTO Accession Poverty Rates and WTO Accession With global reciprocity, positive export terms-of-trade and ag demand growth lead to progressive effects (by province) 10.00 5.00 0.00 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Percent Change in Poverty Rate -5.00 -10.00 -15.00 -20.00 -25.00 -30.00 -35.00 -40.00 Slide 15 Roland-Holst Baseline Poverty Rate
Agricultural Services and WTO Agricultural Services and WTO • Vietnam filed its application to join the WTO in early 1995, and concluded its 11th round of negotiations in September 2005. • Both SPS- and TRIPS-related issues have proved to be obstacles in the negotiations. • Vietnam has made great strides in agriculture since domestic reforms began in 1982, but much remains to be accomplished. Slide 16 Roland-Holst
Priorities for Agriculture Priorities for Agriculture • Tackling rural poverty • Scale and services for smallholder agriculture • Adding value to agriculture • Modernizing infrastructure • Reforming state-owned enterprises Slide 17 Roland-Holst
Farm Scale and Poverty Farm Scale and Poverty Population density per hectare of farmland is a serious constraint on actual and potential income growth. There are two ways to overcome this, higher crop value and migration. Estimated Revenue per Capita for Vietnamese Crops at US Prices 3,500 3,000 Farm Revenue per Capita 2,500 (2003 USD) 2,000 Rice Fruit 1,500 1,000 500 0 40 50 60 70 Percent Urban Population Slide 18 Roland-Holst
Farm Population and Poverty Farm Population and Poverty Farm populations in middle income countries are 15- 30%, in high income countries 1-15%. Per Worker Value Added at Different Levels of Farm Population 2,000 1,800 Farm Worker Value Added 1,600 1,400 (2003 USD) 1,200 1,000 800 600 400 200 0 10 20 30 40 50 60 70 80 Percent Reduction in Farm Population Slide 19 Roland-Holst
Recommend
More recommend
