Impacts of trade liberalization in the least developed countries: evidence from Lao PDR

Phouphet Kyophilavong and Kazunobu Hayakawa

No 863, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This study empirically investigates the effects of tariff reductions in a least developed country on its economy. Specifically, we focus on tariff reductions based on the ASEAN Free Trade Area (AFTA) in Laos. F irst, we analyze how the reduction of AFTA tariff rates in Laos affects Lao imports from AFTA membe r countries. Our main finding is that the reduction of AFTA tariffs in Laos does not significantly chang e Laos’ imports. Second, we investigate their effects on plant-level employment. Consistent with the observa tion of a negligible change in Laos’ imports, we find no significant changes in plant-level employ ment. In short, although Laos decreased its tariff rates against other AFTA members, imports from them d id not significantly increase, and no significant changes occurred in employment. We discuss several possible reasons for these insignificant effects.

Keywords: LDC|Lao; PDR|Tariffs (search for similar items in EconPapers)
JEL-codes: F15 F53 (search for similar items in EconPapers)
Date: 2022-09
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 863. 2022-09

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Journal Article: Impacts of Trade Liberalization in the Least Developed Countries: Evidence From Lao PDR (2024)
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