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Trade agreement opens door to US handicraft market
The US market should become more attractive for Lao handicrafts given the major reductions in US tariff rates for handicrafts under the two countries' bilateral trade agreement.
Lao exports to the US in 2008 were valued at about 336 billion kip (US$41.9 million), including handicrafts worth more than US$400,000, according to a recent manual from the Industry and Commerce Ministry.
The US is the world's largest market for handicrafts and offers Lao producers the potential to boost exports significantly.
Under the US-Laos agreement, which came into e ffect in 2005, US tariffs levied against Lao exporters of traditional handicrafts were greatly reduced and opportunities for exports expanded.
There is high demand in the US for many products that are made in Laos with the support of the Lao Handicrafts Association, including wooden items, jewellery, ceramics, paper, textiles, and fine art.
Laos exported more than 10 billion kip (US$1.3 million) in handicraft products in 2008, mainly to the US and Asian markets, especially Thailand.
About 30 percent of Lao handicraft exports went to the US, with jewellery accounting for more than half, the manual noted.
The owner of a handicraft business in Vientiane, Phaeng Mai Gallery Director Ms Kongthong Nanthavongdouangsy, said her exports to the US are increasing.
From 2006 to 2008 her exports amounted to US$15,000 to US$20,000 per month.
“However, since 2009 the export value has risen to US$30,000 to US$50,000 each month,” Ms Kongthong said yesterday.
Her main exports are home accessories such as scarves, curtains, sofa covers, and artistic items used for decor.
The US imports significantly more home accessories than all European countries combined, with the US and EU representing the largest markets for handicrafts worldwide.
In 2007, the value of the US home accessories market was estimated at US$74.2 billion. The value of jewellery imported into the US in 2008 is estimated to have been US$8.5 billion, the manual noted.
Asian exporters tend to dominate in accent furniture and other goods produced with tropical hardwoods, while European exporters tend to dominate in decorative accessories, such as glass or ceramic products.
Jewellery, meanwhile has many suppliers worldwide.
Despite the lack of a dominant handicrafts supplier, the industry has experienced a ‘commodification' effect, whereby unique designs from one country are mass-produced in another country where production costs are lower.
As a result, larger, more cost-competitive countries such as China and India have been capturing a greater share of the US market.
Because of this, producers are now expected not only to meet product specifications, but also to provide competitive pricing, on-time delivery, responsive communications, good packaging, and the capacity to increase production quantity while maintaining quality standards and deliverability.
vientiane times
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