Key exports from Vietnam to Laos include petroleum products, steel, transportation vehicles, and electronic components. Conversely, Laos exports electricity, wood and wood products, as well as some specialty agricultural products to Vietnam. This increase in trade reflects not only the efforts of businesses in both countries to expand their markets but also the results of trade-promoting policies by both governments.

A crucial factor driving the Vietnam-Laos trade relationship is the increasingly refined infrastructure for transportation and logistics. Both countries have heavily invested in infrastructure projects that connect them, especially important roads and railways. Improved transportation infrastructure has helped shorten shipping times and reduce logistics costs, greatly facilitating bilateral trade.

Additionally, trade between the two countries benefits from various agreements, including the ASEAN Trade in Goods Agreement, the Vietnam-Laos Bilateral Trade Agreement, and the Vietnam-Laos Border Trade Agreement. These agreements provide a robust legal framework, minimize trade barriers, and promote trade and investment liberalization between the two nations.

Bilateral Trade Volume Between Vietnam and Laos: 2020-2023

Source: General Department of Customs 

Unit: USD Billion

Trade relations between Vietnam and Laos have seen robust and comprehensive growth in recent years, underpinned by strategic cooperation and mutual support. The trade structure between the two countries is complementary, not directly competitive, effectively meeting the consumption needs of both nations and supporting their production sectors.

Top 10 Largest Import Markets for Laos in the First Four Months of 2024 (Vietnam Ranked Third)

Source: Ministry of Industry and Commerce of Laos

According to data from the Ministry of Industry and Commerce of Laos, Vietnam emerged as the third-largest source of imports for Laos in the first four months of 2024. The value of imports from Vietnam reached USD 122.47 million, accounting for 5.41% of Laos's total import volume during this period. Thailand and China are the top two markets on this list.

Vietnam's Export Volume to Laos: 2013-2023

Source: General Department of Customs  
Unit: Million USD, Percentage

According to data from the General Department of Customs of Vietnam, the total bilateral trade volume between Vietnam and Laos in 2023 reached USD 1.63 billion, marking a 4.3% decrease compared to 2022. Of this, exports amounted to USD 533.68 million, a decrease of 18.74% from the previous year, accounting for 0.15% of Vietnam's total global exports. Imports totaled USD 1.09 billion, an increase of 4.74% from 2022, representing 0.34% of Vietnam's total global imports.

In April 2024, Vietnam's exports to Laos were valued at USD 41.27 million, a decrease of 22.49% from the previous month and a 14.7% drop compared to the same month last year. For the first four months of 2024, cumulative exports to Laos reached USD 186.08 million, reflecting a 5.64% increase compared to the same period last year.

Export Volume of Vietnamese Goods to Laos in the First Four Months of 2024

Source: General Department of Customs

Over the past four months, petroleum products have been the largest export item to Laos, with a value of USD 34.52 million. This represents a 61.65% increase compared to the same period last year and accounts for 18.55% of Vietnam's total exports to Laos during this period.

In April 2024, Vietnam imported goods from Laos totaling USD 103.16 million, a decrease of 29.56% from the previous month but an increase of 17.99% compared to the same month last year. For the first four months of 2024, imports from Laos totaled USD 434.55 million, a 12.81% increase compared to the same period in 2023. Rubber was the leading import item from Laos, with imports valued at USD 11.95 million in April 2024. This represents a 27.32% decrease from the previous month and a 5.74% decrease from the same month last year. The total value of rubber imports for the first four months of 2024 reached USD 67.14 million, up 20.51% from the same period last year, making up 15.45% of Vietnam's total imports from Laos.

Import Volume of Certain Goods from Laos to Vietnam in the First Four Months of 2024

Source: General Department of Customs

To enhance Vietnam's exports to Laos, both government agencies and businesses need to work closely together and implement a series of strategic measures. First and foremost, it is crucial for government bodies to strengthen bilateral cooperation through free trade agreements. These agreements will help reduce tariffs and non-tariff barriers, making it easier for Vietnamese goods to access the Lao market. Consequently, government agencies should intensify diplomatic activities and economic forums to promote economic and trade relations between the two countries.

Simultaneously, developing infrastructure and logistics systems plays a key role. Improving transportation networks such as roads and railways not only reduces transportation costs but also shortens delivery times. Modern logistics services and well-equipped warehouses will effectively support the storage and distribution of goods.

For businesses, product quality remains the most critical factor in promoting exports. Vietnamese companies need to adhere to international quality and food safety standards to build trust with Lao consumers. Building a strong brand through effective marketing strategies will enhance product value and competitiveness in the market. Additionally, participating in international trade fairs and exhibitions provides excellent opportunities to showcase products and find potential business partners in Laos. Establishing relationships with local partners and distributors to expand distribution channels and collaborating closely with local distributors, agents, and businesses will help companies more effectively enter the market.

Moreover, optimizing export and logistics processes is an aspect that cannot be overlooked. Businesses need to improve transportation processes, minimize costs and delivery times, and use high-quality logistics services to ensure goods are transported and stored under the best conditions. Implementing technology and e-commerce solutions is also crucial. Developing e-commerce channels will help businesses easily reach Lao customers, especially as technology continues to advance. Additionally, utilizing supply chain management and warehouse management software will enhance operational efficiency.

On April 8, 2024, during his visit to Vientiane, Laos, Vietnamese Minister of Industry and Trade Nguyen Hong Dien met with Lao Minister of Industry and Commerce Malaithong Kommasith and signed a new Vietnam-Laos Trade Agreement. To leverage trade cooperation potential, the two ministers agreed on specific measures to implement the commitments and agreements outlined in the high-level agreements between the two governments, including:

(i) Promoting Bilateral Trade: Both ministers recognized that effective implementation of trade commitments between Vietnam and Laos heavily relies on close cooperation between businesses in both countries. They agreed to enhance trade activities and business connections through forums, trade conferences, trade fairs, trade promotion events, and market information seminars.

(ii) Developing Border Trade Infrastructure: The ministers agreed that border trade plays a crucial role in the bilateral trade between the two countries, with border trade accounting for over 90% of the total trade volume. To advance border trade, the two sides need to effectively implement the Memorandum of Understanding on the Development and Connectivity of Border Trade Infrastructure (signed in January 2024) and review and amend the 2007 Hanoi Agreement and the Vietnam-Laos Border Trade Agreement to align with current conditions.

(iii) Maximizing the Efficiency of Existing Industrial Zones: The ministers emphasized the need to study and survey the development of industrial zones and border economic zones. In the short term, they should focus on optimizing the effectiveness of existing industrial zones and border economic zones. Additionally, the two sides need to review and enhance legal frameworks for border industrial cooperation.

(iv) Ensuring Stability in the Lao Oil Market: During the meeting, Minister Malaithong Kommasith requested Vietnamese support in sharing market management experience and stabilizing the supply of oil in Laos.

(v) Enhancing Market Management and E-Commerce Cooperation: The ministers discussed Lao concerns regarding market management (such as combating smuggling and trade fraud) and the development of e-commerce markets.