Based on the Dynamic Computable General Equilibrium (DCGE), the paper aims at calculating and simulating the impacts of cuts in import duty as required by WTO rules on changes in Vietnam’s structure of industry in the long term. Simulation results show that labor-intensive industries will have chances to make the best use of their advantages for development while capital-intensive and highly protected industries will encounter difficulties. | Public investment & restructuring of Public sector Based on the Dynamic Computable General Equilibrium (DCGE), the paper aims at calculating and simulating the impacts of cuts in import duty as required by WTO rules on changes in Vietnam’s structure of industry in the long term. Simulation results show that labor-intensive industries will have chances to make the best use of their advantages for development while capital-intensive and highly protected industries will encounter difficulties. Sea-farming and aquatic product processing industry with proper care from investors and authorities, can deploy their advantages and are likely to gain the highest growth rate. Keywords: Dynamic Computable General Equilibrium (DCGE), changes in structure of industry, simulation 1. Introduction the structure of industry of an economy is the share of sectors in the gDP of the economy. the unequal rises (or falls) of the industries caused by various factors can lead to changes in the structure. the changes in the structure often result from macroeconomic policies. What matters is the trends, speed and rules of the changes as well as the mesures to estimate and analyze the factors responsible for the changes. by lowering the tariff barriers on vietnam’s accession to the Wto, some competitive industries secure more favorable conditions to develop, achieve higher status and expand their market shares locally and internationally. besides, some other industries are put under so much pressure of fierce competition by imported products that they are forced to reduce output and even go bankrupt. changes in one industry can affect others directly or indirectly in various respects. therefore, it can be predicted that by cutting import duties, 8 Economic Development Review - May 2011 the economic structure will undergo significant changes in the coming years. With the application of Dcge, the paper is aimed at estimating the influences of cuts in import duty as required by the Wto rules
