Plenty of room to boost Vietnam-Laos trade relations

Statistics indicate that the trade value jumped from roughly US$1 billion in 2020 to US$1.37 billion in 2021, rising further to US$1.63 billion last year, representing a bright spot in terms of bilateral relations.

Vietnamese export to Laos grew from US$571.7 million in 2020 to US$594.7 million in 2021, with major export items including steel, means of transport and accessories, machine, plastic products, and vegetables.

Vietnamese Minister of Industry and Trade Nguyen Hong Dien said the industry and trade ministries from each side have worked together in a bid to maintain annual growth at least 10% as set by leaders since 2012.

The two sides have also closely co-ordinated efforts in building a complete, comprehensive trade framework, as well as offering special incentives to each other through the Vietnam-Laos Trade Agreement and the Vietnam- Laos Border Trade Agreement in 2015.

In terms of energy, the two Governments signed a memorandum of understanding on building ties in developing hydropower projects in Laos, thereby connecting the electricity systems and power trading between both sides.

Due to the impact of complex, unexpected developments in the regional and global economy, Minister Dien suggested the energy and mining sectors of both sides strive to tighten their connectivity and further support each other to sail through the difficulties and develop in a sustainable manner.

Pointing to limitations in terms of two-way trade, experts said that investment attraction policies in production, manufacturing, infrastructure, transport, and logistics at border gates have not been effective.

Other problems relate to infrastructure, especially routes leading to border gates and connecting districts, which has so far failed to satisfy the demand for good exchanges occurring in border areas.

The MoIT’s Asia-Africa Market Department noted that with the current growth pace, mutual trade between is expected to hit US$2 billion in the near future.

The department suggested that Vietnamese firms invest in building their own brands, fully understand rules set out in trade agreements, and utilise trade promotion programmes to seek partners.

Lao Minister of Industry and Trade Malaythong Kommasith also noted that trade co-operation has yet to match the potential of both nations, as well as their political ties.

The two ministries have consented to actively working to implement a score of measures to boost trade ties, rapidly finalise the negotiations and signing of a memorandum of understanding on border trade infrastructure development and connectivity, as well as completing adjustments to the bilateral trade agreement to facilitate the operations of Vietnamese and Lao businesses.