09:37 | 30/10/2015 Trade
(VEN) – The Vietnamese government recently approved the Vietnam-Laos Border Trade Agreement, promoting the implementation of commitments to facilitate trade and investment between the two countries.
The Vietnam-Laos Border Trade Agreement was signed on June 27 in Nghe An Province’s Cua Lo Township, marking a new milestone in bilateral relations and economic relations in particular. Lao Deputy Prime Minister Somsavad Lengsavath, Chairman of the Laos-Vietnam Cooperation Subcommittee, said this was a historical event because the two countries signed no border trade agreement over the last four decades.
Vietnamese Deputy Prime Minister Nguyen Xuan Phuc believed the agreement would create a legal corridor for cross-border trade between the two countries and contribute to eradicating hunger, reducing poverty, and promoting socioeconomic development in border provinces, looking towards the US$2 billion bilateral trade target set for this year.
The Vietnam-Laos Border Trade Agreement consists of 23 articles, forming the legal basis for increasing bilateral cooperation in the field of trade, investment, and services catering for border trade, contributing to boosting the friendship between the two countries. The agreement regulates the sale, purchase, and exchange of goods between traders and residents in border areas, the development of border markets, and the facilitation of trade via border crossings. It also indicates land border crossings that are open to border trade between the two countries.
Notably, the agreement offers a zero percent tax rate to goods of Vietnamese and Lao origin; encourages investment in border, mountainous, and remote areas; offers an exemption from import and value added taxes as well as technical barriers to some products created by Vietnamese businesses operating in border areas of Laos when they are exported back to Vietnam.
The agreement also consists of detailed stipulations on payments in border trade, and the cross-border transportation of cash, as well as the exit and entry of people and transport means, and the examination of goods in border trade between Vietnam and Laos. Through the agreement, the two countries are committed to increasing border trade, investment and tourism promotion activities, and developing services catering to border trade to facilitate trade via border crossings. The two sides will set up a steering committee for Vietnam-Laos border trade, encourage the establishment of an association of cross-border traders, and organize biennial conferences to promote bilateral cooperation in border trade development.
In the context of fierce competition with exports from Thailand, Indonesia, and Malaysia, the agreement will create new advantages for Vietnamese goods in Laos.
Data from the Ministry of Industry and Trade show that trade between Vietnam and Laos increased from US$866.1 million in 2012 to over US$1.12 billion in 2013 and US$1.5 billion in 2014. In the first nine months of this year, Vietnam exported US$437 million worth of goods to Laos and imported US$474 million worth of Lao products.
Vietnamese Vice President Nguyen Thi Doan paid an official visit to Laos from October 15-18 to discuss measures to further strengthen the traditional friendship, special solidarity, and comprehensive cooperation between the two countries, as well as to increase bilateral cooperation through sub-regional, regional, and international cooperation mechanisms.