Ample room for Vietnam-Laos trade cooperation
Bilateral trade between Vietnam and Laos have developed vigorously in recent times despite the COVID-19 impact, and both sides have more room to foster their trade in the time ahead.
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Vietnam and Laos are strategically located on the East West Economic Corridor and share a border of more than 2,300 km, spanning administrative boundaries of 10 localities on each side.
Both sides take advantage of incentives from the Vietnam-Laos Bilateral Trade Agreement and the Vietnam-Laos Border Trade Agreement to promote trade in goods and services.
Every year, the Ministries of Industry and Trade of the two countries sign a document under which Vietnam pledges to support Laos in showcasing goods and services at major fairs and exhibitions held in Vietnam such as the Vietnam Expo and Vietnam Foodexpo.
According to the Asia-Africa Market Department under the Ministry of Industry and Trade, the trade turnover between Vietnam and Laos has always grown positively over the years. Their goods are quite diverse and highly complementary.
Statistics show bilateral trade turnover reached 1.37 billion USD last year, up 33.3% year on year. Of the total value, Vietnamese exports brought back US$594.7 million, up 4%, while the imports fetched 778.2 million USD, up 69.8%.
The first half of 2022 saw Vietnamese exports to Laos fall 6% year on year to 309.4 million USD. Major export items to Laos were iron and steel products; means of transport and spare parts; other machinery, equipment, tools and spare parts; fertilizers; plastic products; and vegetables.
Meanwhile, Vietnam also imported 514.6 million USD worth of commodities from Laos in the first six months, up 45.3% year on year. Major import items were rubber products; wood and wood products; fertilizers; vegetables; ores and minerals.
The two sides have facilitated Vietnamese investment in Laos in organic agriculture, manufacturing & processing, and other fields of strength in the region along the border.
To date, Vietnam has poured a total of 4.3 billion USD into 417 projects in Laos, ranking third among 54 countries and territories investing in the country.
Le Thi Phuong Hoa, trade councilor of the Vietnam Trade Office in Laos, told Vietnam News Agency that Laos is the destination for many Vietnamese businesses because of its proximity and acceptance of most standard certifications from exporting countries.
In addition, Vietnamese exporters enjoy tax rates slashed to 0% on products imported into Laos under the ASEAN Trade in Goods Agreement (ATIGA), the Vietnam-Laos Bilateral Trade Agreement, and the Border Trade Agreement between Vietnam and Laos.
However, bilateral trade is yet to match the two countries’ potential due to ineffective policies to attract investment in production, processing, infrastructure, transport and logistics in the border gate area. Infrastructure development, especially the construction of roads connecting to the border gate and inter-district roads in some areas is still slow going and inadequate.
In addition, production is on a small scale and most of their import-export items are raw materials and unfinished products. Both sides have yet to pay more attention to developing goods brands or forming a production and consumption chain.
In 2022, both countries strive to expand their two-way trade turnover by 10-15% compared to the previous year. To meet the target, they will create more favourable conditions for businesses and people in the border area to strengthen trade exchanges.
Trade councillor Hoa recommended that to further make inroads into the Lao market, Vietnamese businesses should label products in the Lao language and attend more trade fairs to reach out to local consumers.
The Vietnam Trade Office will support Vietnamese businesses in seeking their counterparts in Laos if they are unable to travel to Laos for trade fairs and exhibitions, said Hoa.
(Source: VNA)
