ASEAN–China Free Trade Area and the Competitiveness of Local Industries: A Case Study of Major Industries in the Lao People’s Democratic Republic
Leebouapao, Leebeer; Insisienmay, Sthabandith; Nolintha, Vanthana | July 2012
Abstract
This paper provides an evaluation of the impact of the ASEAN–China Free Trade
Agreement (ACFTA) on industries in the Lao People‘s Democratic Republic (Lao PDR).1
In general, the paper finds that price competitiveness in the three industries under
review falls substantially if tariffs are completely removed. However, the degree of
impact varies substantially across industries. In the wood processing and cement
industries, of which the latter benefits from import substitution policies, competitiveness
based on both price and product quality will be affected by the removal of tariffs.
Ensuring product quality in the face of increased competition from neighboring countries
will be crucial for both industries in order to maintain domestic market share and expand
into ASEAN and People‘s Republic of China (PRC) markets. For a foreign direct
investment (FDI)-led industry such as motorcycle assembly, the concern over price
competitiveness seems to be less significant. However, strengthening product quality
and brand reputation should be high on the agenda of Lao People‘s Democratic
Republic motorcycle assemblers as they seek to penetrate the neighboring Thai market.
This paper concludes by recommending a package of industry-specific policy
interventions to prepare Lao People‘s Democratic Republic industries for increased
competition in domestic markets and possible expansion into the more competitive
regional markets of ASEAN and the People‘s Republic of China
Citation
Leebouapao, Leebeer; Insisienmay, Sthabandith; Nolintha, Vanthana. 2012. ASEAN–China Free Trade Area and the Competitiveness of Local Industries: A Case Study of Major Industries in the Lao People’s Democratic Republic. © Asian Development Bank. http://hdl.handle.net/11540/1301. License: CC BY 3.0 IGO.Keywords
Project Evaluation & Review Technique
Operations Evaluation
Evaluation
World Trade
Trade Volume
Trade Promotion
Trade Flows
Trade Development
Patterns Of Trade
Resources evaluation
Input output analysis
Import volume
Export volume
Export Development
Economic agreements
International market
Import policy
Export policy
Participatory monitoring and evaluation
Participative management
Foreign trade routes
Trade routes
Foreign trade and employment
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