[NEWS] - The future of export to the Lao’s market
24/06/2022
Vietnam is the third largest trading partner of Laos after Thailand and China. In recent years, the two countries’ trade relations between Vietnam and Laos have grown tremendously, becoming more and more substantive and in-depth.
With stable economic growth, increasing people’s income as well as consumption, Laos is considered as one of the stable markets for trade and investment development. Therefore, this market is becoming more and more attractive to Vietnamese exporters.
Steady growth
According to experts, in the 2016-2020 period, the trade turnover between Vietnam and Laos has grown steadily and has reached the target of over 1 billion USD/year. After 2 years of being affected by the COVID-19 epidemic, natural disasters and floods caused trade between Vietnam and Laos to encounter some obstacles and difficulties.
However, since the beginning of 2021, trade between the two sides has grown strongly, so the balance of exports and imports is relatively balanced. Therefore, the structure of import and export of goods has changed in a sustainable way, and the list of goods exchanged between the two countries has been expanded, diversified and richer.
According to statistics of the Ministry of Industry and Trade, trade turnover between Vietnam and Laos in 2020 will reach more than 1 billion USD, down 11.5% compared to 2019; in which, exports of Vietnam to Laos reached 571.7 million USD, down 18.5% compared to the previous year. In the opposite direction, Vietnam’s import turnover from Laos reached 458.1 million USD, down 0.7%. In 2021, the trade turnover between Vietnam and Laos will reach 1.37 billion USD, up 33.3% over the previous year. Of these, Vietnam’s exports to Laos reached US$594.7 million, up 4% over the previous year and Vietnam’s import turnover from Laos reached US$778.2 million, up 69.8%.
In the first 5 months of this year, two-way trade turnover between Vietnam and Laos reached more than 690 million USD, up 21% over the same period last year, of which exports reached more than 255 million USD. The main export items of Vietnam to Laos include products from iron and steel, means of transport and spare parts, machinery, equipment, tools, other spare parts, fertilizers of all kinds, plastic products, Vegetables.
Take advantage of the two countries
With 8 pairs of international border gates, 7 pairs of main border gates and 18 pairs of secondary border gates, economic exchanges as well as travel, import and export of goods and labor between Vietnam and Laos are very favorable. . Another great advantage for economic cooperation between the two countries is that Vietnam - Laos has a long and friendly border with localities, forming a large area including 10 provinces of Vietnam and 10 provinces. of Laos.
In addition, the two countries’ trade benefits from the reduction of tax rates to 0% for most products under the ASEAN Trade in Goods Agreements, the Vietnam-Laos Bilateral Trade Agreement, and the Vietnam-Laos Trade Agreement. Vietnam-Laos border. Other advantages such as Laos market does not have strict requirements on product quality, consumers have a lot of sympathy for goods from Vietnam.
On the other hand, enterprises can also take advantage of the wave of investment from Vietnam to Laos to increase the scale of exports. Notably, Vietnam is the third largest investor in Laos and vice versa, Laos is the country receiving the largest source of investment capital from Vietnamese enterprises. Large investment projects focus on the energy industry, banking, industrial crops, garment... Along with the investment wave, Vietnamese enterprises will have the opportunity to increase the export of goods. such as iron and steel, means of transport and spare parts, machinery, equipment, tools, fertilizers, animal feed.
Although the potential for exporting Vietnamese goods to Laos is great, it is important to build trust with Lao consumers. Vietnamese businesses need to actively promote Vietnamese products in Laos, build distribution channels for businesses in Laos, to bring quality products to consumers. On the other hand, Vietnamese enterprises often face difficulties in finding importers in Laos or in the process of preparing export documents and procedures. Indochina Holdings – an experienced enterprise in the field of trade promotion, export consulting; is also a partner of the Consulate General of Laos in Ho Chi Minh City. Ho Chi Minh City will help your business solve all difficulties in the process of exporting goods to Laos. We always accompany and support to become a solid bridge to open up many cooperation opportunities between Vietnam - Laos businesses, contributing to increasing the bilateral relationship between the two countries.
Kieu Anh
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