MOIT VIETNAM | Increased bilateral commerce between Vietnam and Laos

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Increased bilateral commerce between Vietnam and Laos

25th July 2022 post by MOIT Vietnam

After 2 years of being hindered by the Covid-19 epidemic, from the beginning of 2021 onwards, trade between Vietnam and Laos has grown strongly, the structure of import and export of goods changed and the list of goods became more and more diversified.

Therefore, the working visit to Vietnam of Politburo member, Permanent Secretary of the Central Committee of the Lao People's Revolutionary Party, Vice President of the Lao People's Democratic Republic Bounthong Chitmany from 17-27 July 19 is an important occasion to create momentum for trade between the two countries to develop. Vietnam and Laos share a border of more than 2,300 km, passing through the administrative boundaries of 10 provinces and cities of each side, an area with potential for development, strategically located on the Economic Corridor. East West.

At the same time, taking advantage of incentives from the Bilateral Trade Agreement and the Vietnam - Laos Border Trade Agreement has contributed to promoting trade in goods and services. Every year, the Ministry of Industry and Trade of the two countries sign a Memorandum of Understanding on supporting Laos for booths at major fairs and exhibitions in Vietnam such as Vietnamexpo, Foodexpo. According to the Asia-Africa Market Department (Ministry of Industry and Trade), over the past time, trade turnover between Vietnam and Laos has always grown positively. Import and export goods between the two countries are quite diverse and complementary.

Statistics show that in 2021, trade turnover between Vietnam and Laos will reach 1.37 billion USD, up 33.3% over the same period in 2020. Of which, Vietnam's exports to Laos will reach 594.7 million USD. , up 4% compared to 2020. In contrast, Vietnam's import turnover from Laos reached 778.2 million USD, up 69.8% over the same period in 2020.

Particularly in the first 6 months of 2022, Vietnam's exports to Laos reached 309.4 million USD, down 6% compared to the same period in 2021. Exports to Laos are mainly iron and steel products. type; means of transport and spare parts; other machinery, equipment, tools and spare parts; fertilizers of all kinds; plastic products; Vegetables.

In addition, Vietnam also imported from Laos 514.6 million USD, up 45.3% over the same period in 2021, including rubber products; wood and wood products; fertilizers of all kinds; Vegetables; ores and minerals.

Up to now, there have been 417 investment projects of Vietnamese enterprises in Laos with a total investment of about 4.3 billion USD, ranking third among 54 countries and territories investing in Laos.

In addition, the two sides have increased promoting and prioritizing Vietnamese enterprises to invest in Laos in clean agriculture, manufacturing processing industry and areas with many strengths in the region along the border.

Ms. Le Thi Phuong Hoa - Commercial Counselor of the Vietnam Trade Office in Laos said: The Lao market is the destination of many Vietnamese businesses because of its proximity and acceptance of most certifications of standards from exporting countries. export.

Moreover, the export to Laos enjoys preferential benefits from the reduction of tax rates to 0% for the products of the two countries under the ASEAN Trade in Goods Agreement, the Vietnam-Laos Bilateral Trade Agreement, and the ASEAN Trade Agreement. Border Trade Agreement between Vietnam and Laos.

Besides the advantages, the two countries' trade has not yet brought into full play its potential due to ineffective policies to attract investment in production, processing, infrastructure, transport and logistics at the border gate area. The development of infrastructure, especially the construction of roads connecting to the border gate and inter-district roads in some areas is still slow and inadequate.

Along with that, goods produced on a small scale, mostly raw materials have not been processed as well as applying standards, traceability, branding or forming a chain of production and consumption. In addition, in 2020 and 2021, due to the impact of the COVID-19 epidemic, the implementation of programs and agreements between the two sides is still limited. Therefore, in 2022, the two countries strive to increase the total trade turnover to 10-15% according to the agreed target in the 2021-2025 period, creating favorable conditions for businesses and people in the border areas of the two countries to increase trade exchanges.

Thanh Chan Fisheries Cooperative (Dien Bien) has an aquaculture nursery area of ​​nearly 5 hectares, the largest in the Muong Thanh basin. In particular, the market for fish seed consumption for cooperatives is mainly in the districts outside the Dien Bien basin and exported to Laos, earning billions of dong per year.

A representative of Thanh Chan Fisheries Cooperative shared that the cooperative chose Laos as its long-term output market because the two countries border and share many pairs of border gates. This helps facilitate trade, time and costs are greatly shortened compared to other countries.

Realizing the potential for agricultural development and advantages in developing dairy farming in Xiangkhouang Plateau (Laos), since 2019, Vietnam Dairy Products Joint Stock Company (Vinamilk) has invested in implementing a development project. large scale dairy farming.

Recently, Vinamilk has successfully received 1,000 purebred HF dairy cows imported directly from the US to Nghi Son port, Thanh Hoa to bring to Vinamilk Lao-Jagro Farm in Xiangkhouang plateau.

The event of welcoming 1,000 dairy cows was also interested by the Lao local government, creating all favorable conditions for the 35-car convoy carrying the cows to move and enter through Nam Can border gate quickly.

To increase sympathy with consumers of the two countries, Ms. Le Thi Phuong Hoa noted that when exporting, they need to put stamps and labels in Lao language so that consumers can read the name, use and usage of the product.

In the search for new partners, Ms. Le Thi Phuong Hoa suggested that businesses participating in fairs to promote trade should participate in local fairs to help Vietnamese goods penetrate deeper into the lives of Laotians.

For interested businesses that do not have the conditions to go to Laos to promote their products, the Vietnam Trade Office in Laos periodically makes a list of businesses and sends them to the focal agencies of this country to inform local businesses.

In order to maintain the growth of Vietnam-Laos trade in 2022 and the following years, Minister of Industry and Trade Nguyen Hong Dien said that the two sides need to maintain and improve the model of clearance for epidemic prevention at border gates. road border.

In addition, the two sides closely monitor the movement of goods through border gates, ensuring a stable and smooth circulation; regularly review, develop and perfect mechanisms and policies on border trade management and development to suit the actual situation.

On the other hand, the two sides continued to disseminate and guide the implementation of documents such as the Vietnam - Laos Border Trade Agreement; Vietnam - Laos Bilateral Trade Agreement; Memorandum of Understanding on the development and connectivity of border trade infrastructure between the Governments of the two countries.

In particular, Vietnam-Laos still has a lot of room for development, especially in the fields of electricity, mining and coal. Therefore, in addition to strengthening cooperation, businesses of the two sides need to closely connect and support each other in the difficult context for sustainable development.