Vietnam-Laos-Cambodia trade Vietnamese goods gain a strong foothold

10:03 | 25/12/2013 Trade

(VEN) - For the past few years, Vietnam-Laos-Cambodia border trade has seen positive changes with continuously increased import and export revenues.

Moc Bai Border Crossing in Tay Ninh Province

Acknowledgeable figures

According to Vietnamese Trade Counselor in Laos Tran Bao Giam, Vietnamese-Lao trade revenue reached US$866 million in 2012, twice as much as that in 2008. In the first 10 months of 2013, total bilateral trade revenue reached US$817.6 million, a year on year increase of 12.7 percent, in which Vietnamese exports to Laos scored nearly US$376 million, up 9.3 percent year on year. Major Vietnamese exports to Laos include petroleum (US$82 million), steel and iron (US$88.9 million), means of transport and spare parts (US$33.7 million), electric wire and electric cable (US$18.1 million) whereas Vietnamese imports from Laos reached US$441.7 million, up 15.8 percent year on year with major imports including wooden products (US$272.5 million) and metals (US$40.8 million). It is estimated that Vietnamese-Lao trade revenue could reach US$1 billion in 2013.

As for Cambodia, according to Vietnamese Trade Counselor in Cambodia Vu Thinh Cuong, total Vietnamese-Cambodian trade revenue in 2013 is estimated to reach US$3.5 billion, up US$0.5 billion compared with 2012. Of that figure, Vietnam’s export to Cambodia score US$3 billion. It is forecast that in 2014, trade revenue between the two sides will reach about US$4 billion. Major Vietnamese exports to Cambodia include consumers’ goods, processed food, milk, instant noodles, coffee, fish sauce, vegetables, flowers and fruits, fertilizers, agricultural materials and pesticides. Meanwhile, Vietnamese key imports from Cambodia are mainly raw agricultural products such as cashew nuts, cassavas, green beans, soybeans and rubber latex.

The effective competition of Vietnamese goods in the two markets was attributed to good quality, perse designs and reasonable prices. Director of the Trade Departments of Kratie and Stung Treng provinces (Cambodia) said Vietnamese goods occupy 50 – 60 percent of the market share in these areas.

In Laos, according to the Director of the Trade and Industry Department of Champasak Province, Vietnam goods account for about 30 percent of the provincial market share. Especially, Vietnam’s steel and iron products and steel are favored thanks to good quality and cheaper prices compared with the same kinds from Thailand. Not only people from Champasak Province but also from others come to Champasak to seek for Vietnamese commodities.

Solutions to boost trade

Vietnamese-Lao trade relation over recent years has seen strong growth but remained low compared to Chinese-Lao and Vietnamese-Lao trade in terms of both growth rate and value.

Statistics from the General Department of Customs show that in 2010, Vietnamese exports to Laos reached US$198 million, accounting for over 10 percent of Laotian import revenue. In 2011 and 2012, the figures increased by 11.4 percent and 16.4 percent respectively. Also in 2010 and 2011, Lao’s import revenues from Thailand reached nearly US$1.4 billion and US$1.45 billion respectively while that import figures from China reached US$145 million and 392 million.

One of the reasons that led to a weak increase of Vietnam’s export to Laos was due to the declining competitiveness of Vietnamese goods compared to those of Thailand and China. The two competitors have also developed distribution systems while Vietnam’s similar system in Laos was almost zero, plus small and scattered trading methods, mainly by sub-border gates. In addition, import and export procedures have not been clear, traffic infrastructure have not been upgraded to meet trade demand.

In Cambodia, despite Vietnam’s increased export revenue in 2013, the growth has been slower than before due to Cambodia stricter controls on import taxes. The retail price of many Vietnamese consumer goods in Cambodia has increased from 10-15 percent, some items from 20-25 percent, with lower competitiveness compared to other countries’ goods.

Potentials and opportunities are open

The potentials and opportunities to develop Vietnamese-Lao and Vietnamese-Cambodian trade are very large. In the coming time, to boost trade activities with a target to lift Vietnamese-Lao trade revenue to over US$2 billion, and Vietnamese-Cambodian trade revenue to US$5 billion by 2015, many difficulties and obstacles need to be removed.

First of all, Vietnam needs to promote official border trade activities between Vietnam and Lao, Vietnam and Cambodia, build border markets, shopping and goods distribution centers and commercial warehouses in border economic zones to prepare good supplies to these two markets.

The Vietnamese enterprises need to take full advantage of the preferential treatments from FTAs in the ASEAN block and of preferential import/export taxes from Vietnam, Laos and Cambodia regulated in bilateral agreements. They also need to persify export items, expand distribution systems and change trading modes in accordance with business customs of the partners.

When exporting goods to these two markets, especially the consumer’s goods, Vietnamese exporters need to give instruction uses that are printed in Cambodian and Laotian language. According to the Director of the Trade and Industry Department of Champasak Province, many Laotian consumers buy Thai goods as they have instruction in Laotian language.

To boost trade promotion activities, Vietnam should organize various promotion programs in different localities apart from those held in Phnom Penh and Vientiane. Vietnamese organizers should mobilize and encourage large, well-known businesses to take part in exhibition and trade fairs in a bid to make a good impression for Vietnamese commodities and enterprises.

In particular, favorable conditions should be created for Vietnamese transport vehicles to transit from Cambodia (through Tay Ninh gateway) to Laos and vice versa. Thus, Vietnamese businesses could save time and transportation costs.

The Vietnamese banks should also enable enterprises that undertake investment in Cambodia and Laos to access preferential credit loans so that they can carry out their investment project efficiently./.

By Chi Tien