To promote the development of border trade between Vietnam and Laos, future efforts should be based on market demand for the key import and export commodities of both countries.

In recent years, the close cooperation among ministries, sectors, and localities, particularly the connection between the Ministry of Industry and Trade of Vietnam and the Ministry of Industry and Trade of Laos, alongside the efforts of the business communities of both countries to overcome challenges and strive for growth, have led to increasingly vibrant and robust economic and trade cooperation between Vietnam and Laos. With the existing development potential, both governments have set a target for Vietnam-Laos trade turnover to grow not only at a rate of 10%–15% per year but also towards stable and sustainable development.

Goods through the Lao Bao international border gate

Mr. Trần Quốc Toản, Deputy Director of the Department of Export-Import (Ministry of Industry and Trade), stated that Vietnam and Laos are geographically close, benefiting from convenient transportation and cultural similarities. The two countries share a border of over 2,300 km, spanning the administrative borders of 10 provinces and cities on each side, an area with development potential and a strategic position along the East-West Economic Corridor. The entire Vietnam-Laos border has 9 international border gates, 6 main border gates, 18 secondary border gates, and 27 openings, along with the establishment of 9 border economic zones.

Trade between the two countries benefits from the reduction of tariff rates to 0% for most goods under the ASEAN Trade in Goods Agreement, the Vietnam-Laos Bilateral Trade Agreement, and the Vietnam-Laos Border Trade Agreement.

According to statistics from the General Department of Customs of Vietnam, in the first 9 months of 2024, the total import-export turnover between Vietnam and Laos reached 1.5 billion USD, an increase of 25.5% compared to the same period in 2023. Laos continues to maintain a trade surplus with Vietnam. Exports to Laos reached 491.9 million USD, up 24% year-on-year, while imports from Laos amounted to 1 billion USD, up 26.2% compared to the same period in 2023. This is a very optimistic growth rate given that Laos’s economy is still facing many difficulties.

The main import items from Laos include rubber, wood and wood products, ore, and minerals. Conversely, the main export items to Laos consist of iron and steel products, transportation vehicles and spare parts, machinery, equipment, and tools.

Recently, the governments of both countries have implemented various policies and incentives to facilitate their businesses. However, there are still limitations that hinder the trade relationship between Vietnam and Laos, such as the ineffectiveness of policies to attract investment in processing production, infrastructure, transportation, and logistics in the border areas. Moreover, infrastructure development, particularly in constructing connecting roads to border gates and inter-district routes in some areas, has been slow and does not meet the potential and demand for buying, selling, and trading goods in the border region.

 Prioritize funding support for organizing forums, conferences, fairs, and border trade exhibitions to enhance trade connectivity.

In the near future, to promote the development of border trade along the Vietnam-Laos land border, Mr. Trần Quốc Toảnstated that relevant units need to focus on propagating, disseminating, and implementing international treaties and related legal documents, especially newly issued documents.

The development of border trade between Vietnam and Laos should be based on market demand for key import and export commodities of both countries. For Vietnam, in the short term, the main export items to Laos remain iron and steel products, transportation vehicles and spare parts, machinery, equipment, and tools, while the main import items from Laos mainly consist of rubber, wood and wood products, ore, and minerals.

At the same time, it is essential to establish flexible and efficient trade management mechanisms for border trade and import-export activities from the central to the local level, with a reasonable decentralization of management over border trade and import-export activities to the localities of border provinces.

Additionally, it is important to continue to encourage and guide businesses to implement export activities through official channels; call on logistics service companies to support businesses by reducing storage and handling costs, as well as transportation costs, while ensuring the highest priority for epidemic prevention and ensuring safety for people and workers. The advantages of geographical position and natural conditions at the border with Laos should be maximized to develop trade relations and import-export activities between the two countries, while linking them to the development of trade in mountainous and remote areas of border provinces.

The development of border trade between Vietnam and Laos should follow a civilized and modern trend, becoming increasingly free and convenient, encouraging participation from various economic sectors, progressing towards the smartization of facilities and production equipment operating at border gates, preserving and promoting the cultural identities of the ethnic groups in the border region, and ensuring national security, public order, and social safety in the border area.

The Ministry of Industry and Trade also proposed that ministries, sectors, and localities coordinate to implement several solutions to develop border trade with Laos in the coming time, specifically: continuing to address obstacles and facilitate border trade, especially measures to ensure smooth customs clearance in discussions at bilateral and multilateral cooperation mechanisms with Lao authorities and localities in the near future; promoting the signing of cooperation agreements to facilitate economic and trade cooperation between Vietnam and Laos; prioritizing funding support for organizing forums, conferences, and trade fairs in border trade to enhance trade connectivity and the exchange of goods between traders and border residents of both countries; continuing to research policy mechanisms and implementing measures to create a favorable environment to attract more businesses from both sides to invest in the border area; and supporting and encouraging Vietnamese businesses to establish distribution channels and build brands for Vietnamese goods in Laos, as well as assisting traders in organizing distribution systems deep into the domestic markets of both countries.