－189－ Trade Reforms in Vietnam A Computable General Equilibrium Analysis

Vietnam’s integration with the global economy has accelerated in recent years. Vietnam became a member of ASEAN in 1995, joined APEC in 1998, and has applied for membership in the WTO. Various commitments to trade liberalization have been made under bilateral and multilateral trade agreements and will be carried out in coming years. The ongoing trade reforms will significantly change Vietnam’s highly protective trade regimes and bring about profound implications on the economy. In this paper, we have used a computable general equilibrium（CGE）model to assess the impacts of unilateral trade liberalization at both macro and sectoral levels and examine the role of complementary policies. The simulation results have indicated that tariff reductions cause a decline in GDP, but the overall output loss is small. Capital producing industries and public services suffer considerable losses, while export-oriented industries experience a significant expansion. Sustaining the fiscal revenue mitigate the negative effects of tariff cuts on public services and reduce the output loss. Currency devaluation appears to have a strong impact on exports, imports and the trade balance. Acknowledgements I am gratefully indebted to professor Mitsuo Ezaki, who has provided me with guidance and valuable suggestions. I would like to thank Ms. Susan Tennant for correcting the draft of the paper, and two anonymous referees for their comments and suggestions. I