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.