Laos Gets Galvanized by Signing Pacts with Trade Partners

In less than a week, Laos has signed several trade deals with Vietnam and India in a bid to achieve its objective of becoming a developed nation by 2020. The country is understood to have put itself on a high speed mode to expand its business potential particularly in view of the success of the trade pact with China.

The bilateral trade between Laos and China reached $566mn in the first half of 2010, a jump of 59.3 percent. The surge in trade was attributed to the establishment of the ASEAN-China Free Trade Area, a free trade agreement between the Association of South-East Asian Nations (ASEAN) and China that came into full effect on January 1 this year.

It should be noted that Laos is one of the countries which largely benefitted from the ASEAN-China FTA. According to Chinese customs statistics, the growth of trade between China and Laos was higher than the 54.7 percent average increase in trade between China and the ASEAN countries.

On Tuesday, Laos signed a MoU with Viet Nam at the 7th conference for co-operation in the development of cross-border trade. The reform is expected to accord with the agreement among the Greater-Mekong – Sub region countries – Cambodia, China, Laos, Myanmar, Thailand and Viet Nam – to promote the freer flow of people and goods.

Viet Nam's Industry and Trade Ministry reports that the bilateral trade between Viet Nam and Laos reached $211mn by June 30, and will likely cross $470mn for the year, up 12 percent from 2009. The two-way trade is expected to total more than $2bn by 2015 with Lao exports to Viet Nam worth $1.3bn and Viet Nam's exports to Laos $1bn.

On the other hand, Business chambers of India and Laos on Monday signed four agreements to boost bilateral trade ties between the two countries. Although, India-ASEAN FTA came into force from January this year, only five of the ASEAN’s 10-member countries have implemented it, Laos is yet to implement it. However, the recent parleys with both the sides indicate Laos will follow suit by the end of this year.

By Jose Roy