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Iron and steel are the commodities with many opportunities to promote exports to Laos. Photo: Nguyen Thanh

According to the Asia-Africa Market Department (Ministry of Industry and Trade), in the first five months of 2021, the total bilateral trade turnover between Vietnam and Laos reached US$570.7 million, up 39.3% over the same period year of 2020. In which, Vietnam's exports to Laos reached US$280.3 million, up 23.5%; Vietnam's imports from Laos reached US$290.4 million, up 58.9%.

In the 2016-2020 period, the two sides' trade turnover has grown steadily, so far, it has reached the target of over US$1 billion/year. The balance of exports and imports is relatively stable, the structure of import and export of goods has changed towards a sustainable direction. The list of goods exchanged between the two countries is increasingly expanding with a growing diversity of goods.

A representative of the Asia-Africa Market Department said that Vietnamese enterprises need to improve their initiative to exploit all advantages of exporting to Laos and increase the export scale.

Firstly, businesses need to properly position themselves in the Lao market, identify the potentials and advantages of Vietnamese enterprises that can be exploited when entering this market to have a suitable business strategy.

Analysis by the Asia-Africa Market Department, based on the very good political-diplomatic relationship with Vietnam, the Lao government strongly supports and creates favorable conditions for Vietnamese businesses to participate in the process of investment and business in Laos.

With eight pairs of international border gates, seven 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 convenient.

In addition, the two countries' trade benefits from the reduction of tax rates to 0% for most of the two countries' products under the ASEAN Trade in Goods Agreement, the Vietnam-Laos Bilateral Trade Agreement, and the ASEAN Trade Agreement, as well as the border Trade Agreement between Vietnam and Laos.

In addition, other advantages can be mentioned such as: the Lao market does not have strict requirements on product quality, Lao consumers have a lot of sympathy for goods from Vietnam.

Secondly, a representative of the Ministry of Industry and Trade said that businesses need to take advantage of the wave of investment from Vietnam to Laos to increase their export scale.

Currently, Vietnam is the third largest investor in Laos; Laos is the largest recipient of overseas investment capital of Vietnamese enterprises. Major investment projects focus on energy industry, banking, industrial crops and garments.

Laos continues to call on foreign businesses to invest in infrastructure, cultivation and livestock development to exploit the full potential of land in North and South Laos. Along with the investment wave, Vietnamese enterprises have the opportunity to increase exports of items such as iron and steel, means of transport and spare parts, machinery, equipment, tools, fertilizers, and animal feed.

Third, in the current context, it is necessary to strengthen linkages, form production and supply chains, and build brands of Vietnamese goods in Laos, creating a firm foothold for Vietnamese goods in Laos.

In the immediate future, Vietnamese enterprises can coordinate with Lao enterprises to build and form production-supply chains for products that the two countries have advantages such as exploitation, processing and export of wood and wood products; manufacturing and exporting rubber, coffee, cashew nuts, textile products branded with Vietnamese goods.

“Along with localities sharing a border with Laos, the Ministry of Industry and Trade has been closely coordinating with relevant agencies to ensure that trade between the two countries takes place smoothly, effectively and beneficially for businesses, contributing to the growth of trade between Vietnam and Laos," the representative of the Ministry of Industry and Trade said.