Agriculture Reference
In-Depth Information
09
Trade reform in the short run
Chna's WTO accesson
Rod Tyers and Lucy Rees
Chna's accesson to the WTO was an mportant event n global economc
history and it is fitting that there has been so much quantitative analysis
of ts mplcatons for trade and growth (Glbert and Wahl 2001). The most
recent quanttatve assessments have offered comparatvely sophstcated
representatons of some pecular trade polces and Chnese labour market
condtons.
1
All these studies have, however, focussed on medium to long-
run mpacts of accesson reforms. They have not addressed the ssue of
'how do we get there from here' and, in particular, the dependence of the
transton on macroeconomc polces. Ths paper follows on from that by
Yang and Tyers (2000) n that t emphasses the short run and the role of
the macroeconomic environment, although it departs from that paper in
ts representaton of accesson trade polcy reforms. Lke Ianchovchna and
Martin (2002) we make allowance for idiosyncratic trade policies, such as
the duty drawbacks on mports used n the manufacture of exported goods.
As befits a short-run analysis, we also allow for labour market rigidity and
departures from full employment.
2
Our pont of departure s the recognton that the removal of mport
barrers can be contractonary n the short run n economes where the
target of monetary polcy s the exchange rate. Ths s because trade
First published in the
Journal of Asian Economics,
15(1):1-31. Reproduced with permission.
