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Regional Integration Process and Challenges

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Regional Integration Process and Challenges UNITED NATIONS DEVELOPMENT PROGRAMME - VIET NAM Viet Nam in ASEAN: Regional Integration Process and Challenges A collection of research papers from the Government of Viet Nam / UNDP Project, "Promoting Viet Nam's Integration into ASEAN" (VIE/95/015). Edited by UNDP consultants Neal Forster and Adam McCarty. November 2001 FOREWORD This book was produced as part of the UNDP-funded Project “Promoting Viet Nam’s Integration into ASEAN” (VIE/95/015), executed by the Bureau of the National Committee for ASEAN, Office of the Government of Viet Nam. The book was compiled and edited by Neal Forster and Adam McCarty. The contents are based on research reports produced by international consultants working with the Project during the period January-April 1999 in Ha Noi. The research was facilitated by the assistance of the following institutions: Ministry of Trade (Multilateral Trade Policy Department), Ministry of Finance (Department of International Taxation Affairs – AFTA Unit), Ministry of Foreign Affairs (National ASEAN Secretariat), Ministry of Planning and Investment, Office of the Government (Bureau of the National Committee for ASEAN), General Department of Customs, Viet Nam Chamber of Commerce and Industry (ASEAN Department), and the General Department of Statistics. The ASEAN Secretariat in Jakarta also provided useful research support. The research reports produced for the Project by the Central Institute of Economic Management, Institute of World Economy, and the Viet Nam Institute of Trade Policy Research were valuable reference tools for the international consultants. Also, the comments of all those who acted as discussants and participated in the seminars held for the international consultants, were extremely useful. The support and guidance of the National Project Director, Dr Nguyen Van Luat and Project Manager Ms Hoang Thi Minh Hong, Bureau of the National Committee for ASEAN, Office of the Government of Viet Nam was invaluable. Their assistance in facilitating the research process in Ha Noi was crucial to the book’s successful completion. Without the backing of the United Nations Development Programme this book would not have been possible. The personal support of the UNDP Resident Representative, Mr Edouard A. Wattez for the Project was greatly appreciated, as was support for the book idea from former Deputy Resident Representative, Nicholas Rosellini. At the administrative level, assistance from the Programme Support Unit of UNDP Ha Noi was always timely and efficient. The report reflects the personal points of view of the contributors and editors and does not necessarily represent those of the Bureau of the National Committee for ASEAN, Office of the Government of Viet Nam or the United Nations Development Programme. TABLE OF CONTENTS LIST OF BOXES ....................................................................................................................................................V LIST OF FIGURES............................................................................................................................................... VI INTRODUCTION..................................................................................................................................................1 CHAPTER 1 : UNDERSTANDING VIET NAM’S TRADE REGIME .................................................... 3 - ADAM MCCARTY - .........................................................................................ERROR! BOOKMARK NOT DEFINED. 1.1 Introduction..................................................................................................................................... 3 1.2 The trade success story ................................................................................................................... 4 1.3 Understanding Viet Nam................................................................................................................. 6 1.4 Conclusion .................................................................................................................................... 11 CHAPTER 2 : VIET NAM’S TRADE REGIME ...................................................................................... 12 - ADAM MCCARTY - .............................................................................................................................................. 12 2.1 Introduction................................................................................................................................... 12 2.2 Tariffs............................................................................................................................................ 12 2.3 Para-Tariff Measures.................................................................................................................... 13 2.4 Price control measures.................................................................................................................. 17 2.5 Finance measures.......................................................................................................................... 23 2.6 Automatic Licensing Measures ..................................................................................................... 33 2.7 Quantity control measures ............................................................................................................ 34 2.8 Monopolistic measures.................................................................................................................. 45 2.9 Technical measures....................................................................................................................... 48 2.10 Quality control measures .............................................................................................................. 50 2.11 The import of machinery and technology transfer ........................................................................ 53 2.12 Internal measures.......................................................................................................................... 55 2.13 Conclusion: stepping stone or new path? ..................................................................................... 58 CHAPTER 3 : THE EXPORT-ORIENTATION EXPERIENCE OF VIET NAM’S NEIGHBOURS. 61 - FRANK FLATTERS - .............................................................................................................................................. 61 3.1 Introduction................................................................................................................................... 61 3.2 Sectoral Lessons and Perspectives................................................................................................ 63 CHAPTER 4 : VIET NAM IN ASEAN ...................................................................................................... 80 - JOSE L. TONGZON -.............................................................................................................................................. 80 4.1 ASEAN Cooperation...................................................................................................................... 80 4.2 ASEAN Institutions and Processes................................................................................................87 4.3 Future Challenges to Viet Nam’s Institutional Capacities............................................................ 91 CHAPTER 5 : THE ECONOMIC REFORM AGENDA UNDER AFTA ............................................... 93 - JOSE L. TONGZON -.............................................................................................................................................. 93 5.1 Overview ....................................................................................................................................... 93 5.2 The CEPT Scheme of AFTA .......................................................................................................... 99 5.3 Viet Nam’s AFTA Commitments.................................................................................................. 102 5.4 Viet Nam’s AFTA Commitments and Implementation Progress ................................................. 103 5.5 CEPT Tariff Commitments.......................................................................................................... 105 CHAPTER 6 : THE REVENUE IMPLICATIONS OF AFTA FOR VIET NAM................................ 114 - PETER DONOVAN & ADAM MCCARTY -............................................................................................................ 114 6.1 Introduction................................................................................................................................. 114 6.2 Viet Nam’s Tariff Structure......................................................................................................... 115 6.3 Viet Nam’s Taxation Regime....................................................................................................... 119 6.4 Analysis of Revenue Effects: Base Case...................................................................................... 122 6.5 Analysis of Revenue Effects: Scenarios....................................................................................... 129 6.6 Results ......................................................................................................................................... 133 6.7 The Importance of Import Growth .............................................................................................
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