Vietnam, Laos sign free trade accord
(VOV) - A new Vietnam-Laos trade agreement that was recently signed in Vientiane is expected to give businesses of both nations a myriad of enhanced trade and investment opportunities, particularly in light of the formation of ASEAN.
On the occasion, Industry and Trade Minister Vu Huy Hoang sat down with a Radio the Voice of Vietnam (VOV) reporter to discuss the prospects for augmented trade ties between the two nations.
Following are key excerpts from the interview:
Reporter: Could you elaborate on the underlying reasons giving rise to the need for the new trade pact? What new horizons will it open up?
Minister Hoang: In 1998, the governments of Vietnam and Laos first signed a trade pact to work towards close economic cooperation. This new agreement will build upon the strong economic political and trade ties that have developed over the past 17 years.
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| Industry and Trade Minister Vu Huy Hoang |
However, in light of ASEAN coming into existence it was necessary to update our agreement in line with the ASEAN Framework Agreement on Comprehensive Economic Cooperation.
The new agreement is much more forward-looking in hopes of forging a closer economic partnership in the 21st century
Most importantly, it lowers the cost on items traded by eliminating import tariffs on substantially all goods and services. Technically the actual percentage of items that are duty free is 95%.
In addition, it contains provisions aimed at increasing intra-regional trade and investment not only between the two nations but within the larger market created by ASEAN and elevates both nations’ ability to attract capital and talents.
Reporter: How does the new agreement facilitate trade between the two nations?
Minister Hoang: Once implemented, this agreement will help streamline border procedures, reducing the time and cost of trade operations across the border. The benefits have been estimated to be in the millions of US dollars per year.
It also addresses the need to innovatively and collectively work together to attract investment to stimulate jobs and growth. It recognizes the importance of the two sides targeting selective investment in areas such as the service sector that will be mutually beneficial.
Reporter: How can the new agreement affect the economic links between Vietnam and Laos in the context of the formation of the ASEAN Economic Community (AEC) later this year?
Minister Hoang: ASEAN will officially come into existence in December this year.When that happens, the member states markets will be treated as if they were one country for economic trade purposes.
The new trade agreement was specifically written to dovetail in line with ASEAN so that both Vietnam and Laos could capitalize on the many opportunities it presents for both Vietnam and Laos businesses and achieve economic prosperity for the benefit of their citizens.
Reporter: Thank you very much!