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Laos, Vietnam enhance trade and economic cooperation
Bilateral trade and investment between Laos and Vietnam will increase signi-ficantly over the next few years as the two governments boost their economic cooperation.
Both countries view economic cooperation as an important jigsaw puzzle that they have to complete to ensure effective implementation of the special relationship and comprehensive cooperation policy of the two nations in the post war era.
Despite closer political cooperation, Vietnam is still a small trading partner that accounts for only 8 percent of the value of Laos' total international trade.
In the first half of this year, the two-way trade between Laos and Vietnam stood at US$349.8 million, about a 65.8 percent increase compared to the same period last year. In 2010, the two nations' bilateral trade reached US$490 million, up 17.2 percent over 2009.
Most of the goods exported to Vietnam are raw materials such as copper and farm and forest products, while Laos imports consumer goods and steel.
In response to the low bilateral trade volume, the Lao and Vietnamese governments have placed the neighbours' economic cooperation at the top of the agenda, which they have pledged to fulfill over the upcoming years as part of measures to strengthen their special relationship and comprehensive cooperation.
Last month, Vietnam's Deputy Minister of Industry and Trade Mr Nguyen Thanh Bien held bilateral talks with his Lao counterpart, Ms Khemmani Pholsena, in Vientiane to discuss measures to increase the value of trade between the two countries to US$2 billion by 2015.
According to the agreement reached at the meeting, Laos and Vietnam will continue granting tax incentives to businesses, consider expanding the list of goods benefiting from tax incentives and implement projects on cross-border trade development.
So far 98 percent of goods, which have their origin in either country, have been included in the zero percent import tax rate.
Since last year, the two countries have also reduced 50 percent of the tariffs on 26 categories of goods that Laos imports from Vietnam, including trucks with a maximum weight of 5 tonnes. Vietnam has similarly reduced tariffs on 32 categories of goods imported from Laos.
In 1998, the two governments signed a trade agreement and in 2002 signed the Cua Lo Agreement to facilitate the passage of people and goods across their shared border. The agreement mentioned reductions and exemptions of import tariffs for various categories of goods that originate in either country.
As one of the major efforts to increase bilateral trade, Laos and Vietnam will hold future trade fairs, seminars and business conferences to allow businesspeople of both countries to exchange goods, establish trade partnerships and exchange lessons, experiences and technology in the processing industry and business operation.
The Lao government is also encouraging and facilitating Vietnamese investment in Laos, particularly in the shared border area.
According to a report from the Ministry of Planning and Investment, between 2000 and 2010 Vietnam became the largest foreign investor in Laos with a total of 256 investment projects valued at US$2.77 billion. It was the first time in a decade that Vietnam was able to overtake Thailand and China as the country's top foreign investor.
Most of the Vietnamese investment projects are in mining and hydropower, rubber plantations, tourism and real estate projects.
The increased Vietnamese investment in Laos and closer economic cooperation is set to be one of the major driving forces boosting bilateral trade between the two nations.
vientiane times
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