Boosting Trade Activities
The trade fair, investment, tourism, and art performance exhibition of the Cambodia-Laos-Vietnam Development Triangle Area for 2024 was inaugurated tonight, February 27th, in Attapeu Province, southern Laos. This is one of the many events taking place during the 13th General Coordination Committee Meeting of the Cambodia-Laos-Vietnam Development Triangle Area, held in Attapeu Province from February 26th to March 1st.
Chu Lai Port serving the export of fresh fruits from farms in Laos and Cambodia
At the fair, many Vietnamese companies investing in the Cambodia-Laos-Vietnam Development Triangle Area in Laos have displayed various products, especially high-quality organic agricultural products for export such as bananas, green-skinned pomelos, pineapples, and organic sugar.
The attractiveness of the products has attracted a large number of local residents and visitors to try them out, and all have highly praised the quality and taste of the aforementioned products.
In January 2024, Vietnam-Laos trade turnover increased by 75.8% compared to the same period in 2023, reaching $174.4 million. Of which, Vietnam’s exports to Laos reached $56.8 million, up 104.4% compared to the same period in 2023.
The main export items include various types of petroleum (up 276%); iron and steel products (up 176.6%); transportation means and spare parts (up 118.7%); machinery, equipment, tools, and other spare parts (up 83.6%); various types of iron and steel (up 18.2%); ceramic and porcelain products (up 79.4%);… Conversely, Vietnam’s imports from Laos reached $117.6 million, up 64.7% compared to the same period in 2023.
In 2023, bilateral trade turnover between Laos and Vietnam reached $1.6 billion. Previously, the Asia-Africa Market Department (Ministry of Industry and Trade) estimated that Vietnam’s exports to Laos could continue to grow based on the positive trade relationship between the two countries.
The products that Vietnam can enhance its exports to Laos include: Essentials such as food, personal items, and household goods; industrial and construction goods such as building materials, machinery, and industrial equipment; agricultural products and processed food;…
Increasing Trade Cooperation Opportunities
Laos and Vietnam currently have 10 border provinces adjoining each other, with 8 pairs of international border gates, 7 pairs of main border gates, and 18 pairs of auxiliary border gates, facilitating regional trade, reducing time and costs compared to other countries in Asia and the world.
In addition, trade between the two countries benefits from the 0% tax rate on most goods from both countries under the ASEAN Goods Trade Agreement, Vietnam-Laos Bilateral Trade Agreement, and Vietnam-Laos Border Trade Agreement. Other advantages, such as the Lao market not having strict requirements on product quality, consumers having favorable opinions about goods from Vietnam.
Laos almost accepts standards certification from exporting countries, including Vietnam. Currently, food safety certified products from Vietnam are accepted when entering Laos.
On the other hand, Vietnamese businesses can also take advantage of Laos’ connections with Thailand and China to export to these two markets. As a result, transportation costs are reduced, and Vietnamese goods become more competitive in neighboring markets.
In the future, the completion of the Hanoi-Vientiane expressway and the Vung Ang-Vientiane railway project are expected to facilitate faster trade with Laos, reducing delivery costs and prices…
Regarding the evaluation of trade cooperation potential between the two countries in the coming time, the Ministry of Industry and Trade stated that Vietnam and Laos have a special friendly and comprehensive relationship. Economic cooperation between the two countries has achieved many positive results, bringing practical benefits to people and businesses. Recent bilateral trade exchanges have continuously grown annually at double-digit rates.
Experts believe that Vietnamese businesses have many opportunities to export to this market. With the strong growth in January, Vietnam-Laos trade exchanges throughout 2024 are expected to achieve and exceed the growth target of 10 – 15% set by the leaders of the two governments at the 46th Vietnam-Laos Inter-Government Committee Meeting.
In addition to the advantages, Vietnamese agricultural and food products face significant competition from China and Thailand. Although the people of Laos prefer Vietnamese goods, Thai goods are more popular. Due to geographical factors and professional communication strategies of Thai businesses, Thai goods have always been preferred by the Lao people.
On the other hand, time and price factors also limit Vietnamese businesses. It only takes one day or more from the Northeast region of Thailand to the Laotian capital, Vientiane, while it takes longer from Vietnam.
For seafood products, Laotian consumers prefer fresh products. The transportation time factor has helped Thai businesses have an advantage over Vietnamese businesses.
In addition to Thailand, Vietnamese goods also face competition from Chinese goods. Starting from the end of 2021, China and Laos put into operation a railway connecting the two countries. Therefore, transportation costs and export time of Chinese goods to this market have also decreased significantly, directly competing with Vietnamese goods.
To further tap into the trading potential between the two countries, experts also recommend the need for joint efforts from both sides, including improving transportation infrastructure, strengthening the management of border area activities, and promoting policies to support trade cooperation.
