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Lao, Thai businesses seek cooperation on transportation
Lao and Thai trade officials and businesses are asking for increased cooperation in transportation to promote production and export.
Laos is losing its advantage in transportation, which is costly in this climate of competition in global trade.
“Local businesses hav e little experience in operations management and they face transportation challenges because of the country's geography,” Import Export Department representative Ms Souphanh Keokhamphet said during a meeting between Thai businesspeople and officials from the Foreign Trade Department and the Lao Import Export Department on Friday.
Some Lao export products for overseas markets have to transit through Thailand, which results in increased business costs.
Lao-Indochina Group (LIG) Chairman Mr Sengmaly Sengvatthana said “We have to pay about 400,000 kip (US$50) per tonne of cassava powder to transport it from Vientiane to Laem Chabang Port in Thailand.”
The port lies on the south-eastern shores of the Gulf of Thailand and is the country's third largest port.
“The US$50 is much higher than the transportation cost from Thailand to the destination country and passing through Vietnam is similar,” Mr Sengmaly said.
LIG is a local cassava powder producer and exports most of its product to China.
Ms Souphanh said that it would be good if the Lao and Thai business communities and state sectors help each other by providing more transport facilities.
Another challenge is that Laos currently has no Generalised System of Preferences (GSP) agreement with China, which means that some Lao agricultural exports are levied the full import tariff rate.
“We are still trying and if we get the GSP, the import tariff payment will be greatly reduced,” Ms Souphanh said.
GSP is a formal system of exemption from the more general rules of the World Trade Organisation (WTO) based on the Most Favoured Nation (MFN) principle that obliges WTO member countries to treat the imports of all other WTO members no worse than they treat the imports of their “most favoured” trading partners.
Importantly, a GSP agreement exempts least developed countries that are WTO members from MFN rules for the purpose of lowering tariffs without also doing so for rich countries.
“In 2015 we will integrate with the Asean community and will become members of one large, competitive market.
Thailand is also a major cassava producer and exporter, so if there is more cooperation we will have a greater advantage in powder export to China and globally,” Ms Souphanh said.
vientiane times
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