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Laos-Korea trade reaches new heights
The Republic of Korea has become a major trading partner of Laos as Korean goods rise in popularity among local consumers.
According to Lao Trade Magazine, a publication of the Ministry of Industry and Commerce's Planning and Cooperation Department, bilateral trade between Laos and Korea has seen continuous growth over the past five years, from only US$16 million in 2005 to US$119 million in 2011.
The rapid increase in bilateral trade puts Korea among Laos' top four trading partners, after Thailand, Vietnam and China. Lao-Thai trade value reached US$4 billion over the first half of this fiscal year; Lao-Vietnamese trade value was about US$700 million in 2011; and trade between Laos and China stood at about US$500 million last year.
The magazine reports that Laos is facing a major trade deficit as Laos continues to import more goods from Korea, in particular vehicles, electronic equipment, and some cosmetic and fashion items for younger consumers. Laos imported US$13 million worth of goods from Korea in 2005 while exporting only US$2 million, resulting in a trade deficit of about US$11 million.
In 2006, Laos imported US$23 million worth of goods from Korea while exporting US$17 million, still leaving a trade deficit. However, the following year the situation reversed, with Laos importing US$55 million worth of goods in 2007 while exporting items worth US$70 million, resulting in a trade surplus of US$14 million.
But despite the increase in bilateral trade, Laos continues to see a major trade deficit with Korea. In 2008, Laos imported US$53 million worth of goods while exporting US$52 million.
In 2009, Laos imported US$55 million worth of Korean products while exporting US$19 million. In 2010, Laos imported US$112 million worth of goods from Korea while exporting US$19 million. In 2011, Laos imported items worth US$115 million while the value of exports amounted to just US$3.7 million.
The value of goods imported from Korea continues to increase, reflecting the popularity of Korean-made goods in Laos. Korea has launched a number of trade missions in Laos in recent years, with more business operators coming to Laos to find partners to sell their goods.
The Korean government has also established a business centre to help its entrepreneurs set up operations in Laos.
Lao consumers are avid fans of televised Korean soap operas, leading Korean firms to advertise their products here, in particular electronic goods and vehicles. Korean vehicle distributors also offer a leasing service, making car ownership more affordable for Lao consumers.
The value of exports from Laos to Korea has declined largely due to a drop in copper exports, one of Laos' major export commodities. Another major Lao export is natural resource products, which is not sustainable.
vientiane times
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