Việt Nam-laos trade ties growing sustainably, hitting $1.37b last year
Since the establishment of bilateral diplomatic ties in 1962, Việt Nam and Laos have promoted cooperation across numerous spheres, with their trade exchange posting substantial growth, benefiting both countries.
During the 2016-20 period, the two-way trade saw stable expansion and reached the target of over US$1 billion, but then suffered from the impact of the COVID-19 pandemic and natural disasters.
The Asia-pacific Market Department at the Vietnamese Ministry of Industry and Trade (MOIT) said that the bilateral trade exceeded US$1 billion in 2020, down 11.5 per cent year-on-year, of which Việt Nam’s exports were worth $571.7 million, down 18.5 per cent.
However, the bilateral trade bounced back since early 2021, surging 33.3 per cent to $1.37 billion for the year, with Việt Nam’s export revenue reaching $594.7 million, a rise of 4 per cent from 2020, and its import hitting $778.2 million, up 69.8 per cent.
The results are attributable to the political resolve by Vietnamese and Lao leaders and the drastic management of competent agencies to remove obstacles facing businesses of the two countries and create optimal conditions for them to quickly adapt to the new situation.
In the first four months of this year, the two-way trade was valued at $558.2 million, representing a year-on-year increase of 20.2 per cent, of which Việt Nam’s export was $192.2 million, down 11.8 per cent.
Việt Nam mainly shipped iron and steel, means of transport and accessories, machinery, equipment, tools, fertilisers, plastic products and vegetables to Laos.
Lê Hoàng Oanh, head of the department, explained that domestic firms have focused on iron and steel exports to the EU, thus resulting in the recent decrease in shipments to Laos.
In the four-month period, Việt Nam imported $366 million worth of goods from the neighbour, up 48.5 per cent year-on-year. Its major import items included rubber, wood and timber products, fertilisers, vegetables, ore and minerals.
Minister of Industry and Trade Nguyễn Hồng Diên said since the 11th conference on border commerce cooperation in 2018, bilateral trade ties have made new strides.
The two countries aim to increase their trade by 10-15 per cent each year in a stable and sustainable manner, Diên noted.
Experts, however, pointed out that the policies that are intended to attract investment in production, manufacturing, infrastructure, transport and logistics at border gate areas have yet to prove their effectiveness.
According to them, with eight pairs of international border gates, seven pairs of main gates and 18 other auxiliary gates, Việt Nam and Laos have favourable conditions to boost trade ties.
The two countries have also benefited from trade agreements in the Association of Southeast Asian Nations (ASEAN) along with their bilateral trade deals. Moreover, Vietnamese goods have been favoured in the neighbouring country.
Vietnamese exporters should also ride the wave of Vietnamese investment in Laos to boost exports, experts said, noting that Việt Nam is currently the third biggest investor in Laos, while Laos is Việt Nam’s largest recipient of outbound investment, mainly in energy, banking, the planting of industrial trees, and garment-textile.
Minister Diên said Việt Nam and Laos will work on preferential breakthrough mechanisms and policies to lure more investment in infrastructure in border gate economic zones, and in production and trade activities in border areas, while pushing ahead with negotiations of a memorandum of understanding on border trade infrastructure development and connectivity between the two governments.
Apart from amending and supplementing the signed documents like the Việt Nam-laos trade agreement and the 2007 Hà Nội agreement, the two sides will further coordinate in the fight against smuggling and trade fraud to create a healthy environment for border trade, he said.