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Trade agreement smoothes the way for silk exports
Laos has the potential to export silk and yarn products to the US in the future, despite very low export values for such products in previous years.
“In 2008, the value of Lao silk exported to the US was only about 18.5 million kip (US$23,000),” said LUNA-Lao Project Director Mr Steve Parker.
The goods remain as a potentially strong export market for Laos because a bilateral trade agreement (BTA) between Laos and the US has resulted in reduced tariff rates.
“The agreement is very important for export capacity building for Lao silk and yarn exporters,” Mr Parker said at a ceremony to mark the opening of a trade information centre recently in Vientiane.
Tariff rates on goods traded between the two nations were between 40 and 90 percent before the agreement was signed, but have now dropped to between zero and 3.9 percent, depending on product criteria and requirements, according to a handout from the ceremony.
Laos exported US$41.9 million in goods to the US in 2008, including over US$20,000 worth of silk products. The US is a large market for Lao silk, mostly silk fabric.
The US imported over US$250 million worth of silk products in 2008, most of which were silk fabric and yarn.
It imported over 66 percent of total Lao silk product exports. These imports were concentrated in fabric and were likely used in apparel manufacturing.
Under the BTA, the US has extended normal trade relations (NTR) status to Lao products. The agreement has reduced tariff rates significantly for Lao exports to the US.
The extension of NTR tariff rates reduced US tariff rates applied to Lao exports of silk products, which will allow Lao silk exports to the US to be priced much more competitively and should open up new opportunities for exports to the US.
The US imports other products made in part from silk, including fabric used to cover chairs and sofas, which are often produced overseas.
US demand for furniture and household furnishings made with silk fabric or yarn – led by products such as sheets, duvet covers and lampshades - is increasing.
Imported raw silk is used mostly in the production of accessories like scarves and neckties.
The world's leading importers of silk fabrics are the US with 13.4 percent, Hong Kong with 10.6 percent and Italy with 9.6 percent.
Mr Parker said China and India, the world's top two silk exporters, are the major suppliers of silk fabrics and yarn to the US, accounting for nearly 60 percent of all imports.
European countries such as Italy, the UK, and France are also significant exporters of pure silk products, generally considered a luxury item because of their high cost.
The LUNA-Lao Project Luna supports Laos to draft, analyse, promulgate and implement the legal and economic policy reforms and institutional capacity building needed to accomplish the objectives. It is a main mechanism for supporting public and private sector integration in the Asean region.
vientiane times
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