Vietnam-Laos Border Trade Agreement: Great progress in trade, investment ties

15:11 | 18/07/2015 Cooperation

(VEN) - Vietnam and Laos concluded a Vietnam-Laos Border Trade Agreement (VLBTA) on June 27 in Nghe An Province after official negotiations held in Hanoi and Vientiane. Vietnamese Deputy Prime Minister Nguyen Xuan Phuc and his Lao counterpart Somsavad Lengsavath witnessed the signing.

Vietnam-Laos Border Trade Agreement: Great progress in trade, investment ties

Vietnamese Minister of Industry and Trade Vu Huy Hoang and his Lao counterpart Khemmani Pholsena concluded the agreement on behalf of the governments of the two countries.

The VLBTA includes 23 articles including regulations on trade between border businesspeople and residents, developing border markets and border trade support services, and facilitating trade at  border crossings. The two parties agreed that  mainland border crossings are open for border trade in compliance with bilateral and multilateral international treaties, and with the zero percent import tariff rate for goods of Vietnamese and Lao origin.

The VLBTA is to attract and encourage investment in border, mountainous and remote areas, provide the zero percent import tariff and added value tax preferences, and terminate technical barriers on several kinds of products which are made by Vietnamese investors in Lao border provinces and are imported into Vietnam.

The agreement also regulates border trade payment, control of cash movement via border crossings, immigrants and means of transport, quarantine, and commodity check at border gates.

The two parties committed to enhance trade, investment and tourism promotion activities, develop border trade support services and facilitate border trade.

The two parties agreed to establish a Vietnam-Laos Border Trade Steering Committee and a Vietnam-Laos Border Business Association and to continue the biennial Vietnam-Laos Border Trade Development Cooperation Conference.

The VLBTA is expected to bring about tremendous benefits to both countries, contributing to increasing bilateral trade revenues, economic and trade cooperation and ASEAN and Greater Mekong Subregion (GMS) regional integration, helping develop the mutual border crossings into  gateways for products between countries in the region and worldwide, facilitating trade in the region, and further strengthening the special friendship between Vietnam and Laos, while promoting close ties between the border provinces of the two countries in the areas of economics, trade, society and culture. The agreement should also help foster socioeconomic development, poverty reduction among ethnic minorities in border, mountainous and remote areas in both countries, and contribute to defense and social security along the Vietnamese-Lao border.

Vietnamese Deputy Prime Minister and Chairman of the Vietnam-Lao Cooperation Sub-committee Nguyen Xuan Phuc was happy to see the robust development of the friendship, solidarity and comprehensive cooperation between the two countries so far this year.

He said at the signing ceremony that the agreement would create a legal corridor for border trade and simplify ways to resolve border trade problems, while contributing to reducing hunger and poverty, developing the economy and society in border provinces and increasing bilateral trade revenues to US$2 billion this year.

Lao Deputy Prime Minister Somsavad Lengsavath also said that the agreement would promote trade cooperation between the two countries. “This agreement is an important historical event as it was first concluded after 40 years of the relations between the two countries, contributing to strengthening trade ties between Vietnam and Laos,” he said.

Vietnamese Minister of Industry and Trade Vu Huy Hoang underlined at the signing ceremony that the friendship and cooperation between the two countries had been strengthened and developed across the board over the last years. Of these, the economic and trade relations and border trade had achieved very good results.

The conclusion of the agreement is vital for realizing the border economic and trade development goals of each country, improving the legal corridor and  economic and trade coordination between the two countries to contribute to the successful establishment of the ASEAN Economic Community (AEC) at the end of the year.

Vietnamese-Lao trade relations have achieved good results over recent years. The two countries saw  US$1.3 billion in imports and exports value in 2014, a 14.2 percent on 2013, and US$686 million in the first half of this year. However, current trade development is not commensurate with potential in the two countries, particularly now that both countries are going to become members of the AEC. For this reason, the conclusion of the Vietnam-Laos Border Trade Agreement would bolster trade exchange and generate great benefits for the two countries in the near future.

Duong Quang