Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis
This study aims to assess the protection for Vietnamese agriculture under trade liberalization based on the input–output approach. From a theoretical perspective, the authors develop a general framework to estimate the effective rate of protection using an input–output table, taking into account tar...
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doaj-90600f86eacf4afeaf3b587529c08db92020-11-25T03:46:33ZengMDPI AGEconomies2227-70992020-06-018434310.3390/economies8020043Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output AnalysisBao Ho Dinh0Hai Nguyen Phuc1Trinh Bui2Hau Nguyen3Faculty of Economics, National Economics University, Hanoi 100000, VietnamFaculty of Economics, National Economics University, Hanoi 100000, VietnamVietnam Development Research Institute, Hanoi 100000, VietnamGeneral Statistics Office, Hanoi 100000, VietnamThis study aims to assess the protection for Vietnamese agriculture under trade liberalization based on the input–output approach. From a theoretical perspective, the authors develop a general framework to estimate the effective rate of protection using an input–output table, taking into account tariffs, subsidies and value-added tax. Based on the data of 2012 and 2016, with a projection to 2020, the empirical results reveal that agricultural production, which is considered as Vietnam’s comparative advantage, is insignificantly protected. From the year 2012 to 2016, the effective rate of protection declined for primary agriculture and its supporting sectors, and would become negative by 2020. This implies that Vietnamese farmers are at a disadvantage due to the effect of trade liberalization. Furthermore, it is empirically revealed that the primary agricultural sector has a high value-added multiplier, which means a significant contribution to the domestic economy, is not protected by the government’s tax and tariff policies. Based on the study results, the authors suggest some policy recommendations to improve the situation, which are focused on the reduction of the value-added tax rate on inputs, while making industries with a high spillover effect to the domestic economy a key priority.https://www.mdpi.com/2227-7099/8/2/43effective rate of protectionagriculturetrade liberalizationvalue-added multiplierI-O tableVietnam |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Bao Ho Dinh Hai Nguyen Phuc Trinh Bui Hau Nguyen |
spellingShingle |
Bao Ho Dinh Hai Nguyen Phuc Trinh Bui Hau Nguyen Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis Economies effective rate of protection agriculture trade liberalization value-added multiplier I-O table Vietnam |
author_facet |
Bao Ho Dinh Hai Nguyen Phuc Trinh Bui Hau Nguyen |
author_sort |
Bao Ho Dinh |
title |
Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis |
title_short |
Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis |
title_full |
Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis |
title_fullStr |
Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis |
title_full_unstemmed |
Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis |
title_sort |
declining protection for vietnamese agriculture under trade liberalization: evidence from an input–output analysis |
publisher |
MDPI AG |
series |
Economies |
issn |
2227-7099 |
publishDate |
2020-06-01 |
description |
This study aims to assess the protection for Vietnamese agriculture under trade liberalization based on the input–output approach. From a theoretical perspective, the authors develop a general framework to estimate the effective rate of protection using an input–output table, taking into account tariffs, subsidies and value-added tax. Based on the data of 2012 and 2016, with a projection to 2020, the empirical results reveal that agricultural production, which is considered as Vietnam’s comparative advantage, is insignificantly protected. From the year 2012 to 2016, the effective rate of protection declined for primary agriculture and its supporting sectors, and would become negative by 2020. This implies that Vietnamese farmers are at a disadvantage due to the effect of trade liberalization. Furthermore, it is empirically revealed that the primary agricultural sector has a high value-added multiplier, which means a significant contribution to the domestic economy, is not protected by the government’s tax and tariff policies. Based on the study results, the authors suggest some policy recommendations to improve the situation, which are focused on the reduction of the value-added tax rate on inputs, while making industries with a high spillover effect to the domestic economy a key priority. |
topic |
effective rate of protection agriculture trade liberalization value-added multiplier I-O table Vietnam |
url |
https://www.mdpi.com/2227-7099/8/2/43 |
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1724505630268456960 |