سیاست های اقتصادی لائوس و نرخ موثر حمایتی

The Lao People's Democratic Republic (PDR) has embarked on the process of accession to the World Trade Organization. Part of that process involves compilation of information on the country's trade and related policies, and development of analytical frameworks that Lao and other researchers can use to understand the effects of these policies. This paper calculates effective rates of protection for tradable-good sectors included in the Lao input–output table. In the process, it surveys and models import tariffs and export taxes, non-tariff trade measures, relevant tax and investment policies, and implicit taxes and subsidies in water and electricity rates.

In its effort to join the World Trade Organization (WTO), the Lao People's Democratic Republic (PDR) is conducting an assessment of its national trade policies and institutions. Calculation of nominal and effective rates of protection offers a comprehensive but relatively simple way to assess the impact of trade taxes and other policy measures on incentives to produce internationally tradable goods. This paper presents such calculations for the Lao economy in 2008 in order to account for the relevant Lao commodity trade and tax policies—notably import tariffs, turnover and excise taxes, export taxes, and foreign investor duty and tax exemptions. It also accounts for the few remaining quantitative trade restrictions that appear to be motivated largely by economic concerns, and for the subsidies or taxes implicit in official electricity and water tariff rates. The import tariffs include those assessed on imports from most countries on a most favored nation (MFN) basis as well as preferential duties applicable to imports from members of the Association of Southeast Asian Nations (ASEAN), China, and the Republic of Korea. The paper first outlines the methods used to calculate nominal and effective rates of protection. I then set the scene in terms of recent trade flows between the Lao PDR and other countries, and survey the trade and other policies to be considered. Along the way, I consider two problems that any analysis of Lao trade policies must contend with. One is the scarcity of detailed, reliable, complete data. For example, the input–output table for the Lao PDR at present divides the economy into only 20 sectors, 11 of which are for tradable items. The other is that trade policies on paper and in practice may differ considerably: Lao policies are not notable for their transparency. The nominal and effective protection calculations for the Lao PDR are then presented, and effective rates of protection for Lao manufacturing are compared with those estimated in other studies of Southeast Asia. A final section offers policy observations based on the findings of the study and looks to the future.

This paper highlights trade policy issues related to the interaction of import duties and taxes, and exemptions from both, as well as the various import tariff preferences granted by the Lao PDR in 2008. It also considers the impact of export taxation and restraints. A number of policy observations follow from this analysis. First, that there are many low or negative effective rates of protection, as shown in Table 4, particularly with preferential trade arrangements and investor incentives accounted for, suggests that the Lao trade and tax policy regime overall has a negative or at best negligible impact on production incentives, except for crops (notably fruits and vegetables), certain manufactures, and food, beverages, and tobacco products. Part of the story is that investor incentives tend to put domestic producers of industrial inputs like basic steel at a disadvantage. On the other hand, Lao import duties are subject to modest escalation if any, so that these disadvantages for producers of upstream inputs may not be so profound. A phase-out of the investor incentives would reduce these disadvantages, but obviously could also lead to a diminishment of foreign and domestic investment, particularly in final-product sectors like apparel for which intermediate inputs are mostly imported. Another part of the story is that the various preferential trade arrangements have lowered import protection, particularly to the extent that there is limited institutional capacity to administer the related rules of origin, so that there is transshipment through ASEAN neighbors like Thailand that may have lower import duties. Second, replacement of turnover taxes with a promised value-added tax that is neutral in its treatment of imports and domestic production, combined with a phase-out of investor incentives, would afford a more level playing field and greater transparency, but would lead to even greater reductions of protection for import substitutes that currently benefit from a differential between import and domestic turnover taxes. In principle, such a move could reasonably be combined with some upward adjustment of import duties, at least during a transition period. Lao obligations under various trade agreements may make it attractive to retain the turnover taxes, however, particularly for the many categories of products for which import turnover taxes are 10 percent and domestic turnover taxes 0 or 5 percent: the tax differential provides import protection that may be more resistant to regional and multilateral trade liberalization initiatives. Third, a number of the specific groups of manufactured products for which nominal and presumably effective rates of protection are higher – alcoholic beverages, mineral waters, soft drinks, tobacco products, perfumes, motor vehicles, and gaming equipment – are also subject to excise taxes: import duties and taxes are evidently being used to tax items that are perceived as luxuries or socially undesirable. One of the basic observations of trade policy analysis is that an import tariff combines the effects of a consumption tax and a production subsidy at the same rate. Thus, it could be more advantageous to increase excise taxes on these items and reduce import duties and taxes, if there is not an intent to provide incentives for domestic production. As an example, does the Lao PDR want additional foreign cigarette manufacturers to follow the Chinese cigarette company that now has a factory in the country? On the other hand, governance concerns could mean that it is wise not to make any one office responsible for too much of duty and tax collection. In any case, Lao import duties will continue to be reduced on a regional basis, as discussed further below. Fourth, and related to the above, certain products like electrical or gas household appliances are subject to MFN import duties at a modest rate of 10 percent, but also subject to an excise tax of 10 percent. Similarly, many types of electronic apparatus, parts, and media are subject to a 15 percent excise tax but a moderate tariff of 10 or 20 percent.28 Simplification of the duty and excise scheme might be advantageous in some of these cases, through elimination of the excise tax and a commensurate increase in import duties, if the intent is to encourage local production. A constraint on such moves, clearly, would be Lao obligations under ASEAN and other trade agreements. Fifth, restrictions or taxes on exports of raw materials like anthracite coal and forest products are subject to more lenient treatment by the WTO than are quantitative import restrictions, and have been widely used in other Asian countries. Arguments can be made that such measures favor resource conservation, by lowering the domestic price of the resource. However, restricting resource usage through export restraints also increases the dependency of domestic industries on the resources, which can be especially problematic in the case of exhaustible resources like coal. Taxation of forestry exports also diminishes incentives for the restoration of forest lands for the sake of future harvests, particularly if land use is controlled by private actors, though the collection of resource rent taxes in the forest would have a similar effect. The loss of forestry resources may also be exacerbated by relatively high rates of protection for agricultural products like fruits and vegetables.29 Though it is not clear how Lao efforts toward WTO accession will turn out, the country will in any case move toward greater openness in trade through its participation in regional trade agreements. The Lao PDR is scheduled to lower tariffs on imports from other ASEAN nations to zero by 2015 under the CEPT arrangements, except for permanently excluded items such as alcoholic beverages, various other products that threaten public safety or morals, and many types of motor vehicles. Given that so much of Lao imports of crops as well as food, beverages, and tobacco comes from ASEAN, in many cases subject to relatively high CEPT tariffs, this will lead to a substantial reduction in protection for agriculture along with various processed foods, non-alcoholic beverages, and tobacco products. Moreover, in addition to ASEAN-China and ASEAN-Korea, several new regional agreements are now in effect—the ASEAN-Japan Comprehensive Economic Partnership and ASEAN-Australia-New Zealand and ASEAN-India free trade agreements. Among other ongoing preferential initiatives, a free trade agreement between ASEAN and the European Union is also under negotiation, though progress has been slow. Improvements in Lao customs procedures will also be encouraged by regional initiatives. ASEAN customs agreements have long urged member countries to standardize their customs valuation procedures in line with the precepts of the General Agreement on Tariffs and Trade and later the WTO, for example. The Lao PDR was a signatory to the 2008 ASEAN Customs Vision 2015, which aims for greater transparency and efficiency in customs in general; in terms of the procedural issues identified in this paper, the establishment of uniform methods of valuation and consistency in the implementation of rules of origin will be particularly important. As a final note, one hopes that in the future better economic data will be assembled within the Lao PDR. For purposes of trade policy analysis based on effective rates of protection or general equilibrium methods, creation of a more detailed, nationwide input–output table, as well as development of comprehensive import and export databases, would be extremely useful. The ongoing customs reform efforts will facilitate the latter, but progress on both fronts can be aided by further cooperation between the Lao government and donor agencies.