Trade Agreements

Laos has bilateral agreements with Vietnam, Thailand, Myanmar, Cambodia, China, Mongolia, Russian Federation, and other eastern European countries. These agreements are of general character with the aim to further develop and strengthen in every possible way the trade relations between the two countries on Principle of equality and mutual benefits.

Private sector participation.

The government is encouraging private sector participation in new economic system giving full support in every sector. Soon after the government of Lao PDR has adopted its move towards market economy, private businessmen lost no time to step into new economic environment. The number of exporters, importers, business representatives, partnership firms, limited companies, foreign companies, commodity associations, joint venture corporations and chambers of commerce and industries registered with the ministries concerned up to June 1996 has come up to many thousands.

Trade Patterns and Trends

Like most developing countries Laos is mainly an exporter of agricultural and other primary products while its imports consist of manufactured goods. Main export items include wood and wood products, electricity, forest products. agricultural products, coffee, tea, minerals, garments, handicrafts and others. The major import items are capital goods, industrial raw materials, spare parts, and consumer goods. In the short term and medium term, the export and import patterns may more or less remain unchanged, but in the long term with the development of natural resource-based industries and implementation of economic reforms, it can be reasonably expected that Lao export/import patterns may become valued-added items like semi-manufactured or manufactured products.

Border Trade

The policy of the Lao Government is to further develop strengthen the bilateral trade relations with the neighboring countries: Vietnam, Thailand, China, Myanmar, Cambodia, using border trade as a mechanism for trade expansion.

Lao Export Structure

Increasing and diversifying exports, and improving the quality of export products, are among the main objectives of the Government: A number of new items in the manufacturing and processing sectors have been introduced. The volume of exports according to the provisional data reached more than 300 millions dollars in the financial year 1994-95.

Lao Import Structure

The volume of total imports in the financial year 1994-95 accounted more than 500 millions dollars. The traditional import pattern, as mentioned earlier, includes capital goods, industrial raw materials and consumer goods among others. Reflecting the trade liberalization measures, substantial changes are being taken place in the pattern of import as well. In spite of the fact that capital goods and raw materials are still taking the lion's share, there is also a sharp increase in the import of consumer goods.

Direction of Trade

Lao foreign trade is mainly with other Asian countries: Japan, Singapore, Thailand, China, Vietnam are its main trading partners. Regionally, the European Union, ranks second in importance. With the change in the pattern of trade, the direction of trade may also be changed.