Laos will face critical challenges in various fields including trade in products, trade in services, foreign investment and facilitation for trade when it comes to the ASEAN Economic Community integration.
According to a report from the Ministry of Industry and Commerce at the 10th ordinary session of the National Assembly’s Seventh Legislature last week, Laos will face negative impacts on trade in products and the import of goods will be affected more than exports, The Vientiane Times reported on Tuesday (29 Dec 2015).
The ministry also referred to the World Bank Economic Report 2015, which said the tariff rate of imports stands at 89 percent this year, which is expected to decrease to zero. Meanwhile the remaining tariffs on unprocessed agricultural products, especially rice, will be erased by 2018.
For the export of goods to other ASEAN countries, Laos has already accessed the markets of Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand since 2010 and it will gradually move into the markets of Cambodia, Myanmar and Vietnam during the years 2016-18.
However, local exporters expect they will gain only small benefits from accessing ASEAN markets because production capacity is still limited. Abilities in relation to business competition and meeting sanitary and phytosanitary or SPS measures still need to be improved.
Laos is now on track to reach more than 93 percent of requirements in implementing the AEC Blueprint, which is significantly higher than the average percent among the entirety of ASEAN countries at 91 percent.
Laos is not only opening its door for neighboring ASEAN countries but many countries from the rest of the world are also becoming crucial trade and investment partners for Laos.
In 2014, total investment amounted to some US$23.39 billion, which came from domestic businesses, foreign investment and joint-venture businesses between domestic and foreign investors.