August 20, 2014


After Joining the WTO, What's Next for Laos? (Buavanh Vilavong,  9 August 2014, East Asia Forum)

Laos has used its WTO accession to implement its decision to establish a market economy. The accession process allows countries to align their trade policy with the principles of non-discrimination and transparency. Over the course of 15 years of accession negotiations, Laos enacted some 90 laws and regulations to bring them in line with WTO rules. This is expected to help create an enabling environment for the private sector. Such reform momentum should be maintained post-accession if Laos is to be competitive in the region.

WTO membership provides export opportunities for Laos, but such opportunities need to be realised. Despite its relatively robust growth of around 7.5 per cent per year over the last decade, Laos has to broaden its export base. To date, its exports are dominated by a limited number of products, mainly resource-based products (mining and electricity), primary commodities (agriculture and wood) and products with low value add (garments). Opening up the internal market to
foreign competition will help to stimulate reform in both the import-competing and export-oriented sectors.

Laos has bound its tariffs for all agricultural and industrial products, while a grace period has been granted for tariffs on items that are significant parts of Laos' domestic production or tariffs that contribute significantly to government revenue. In the medium to long term, alternative measures that are legal under the WTO, such as trade remedies, need to be put in place to address the possible impacts of an import surge.

Adapting to the WTO rules is a long-term challenge. Both the public and private sectors need to be prepared. Joining the WTO is not an end in itself. It is a tool to assist countries in adjusting their internal system to the norms of the world trade community. The true benefits of WTO accession can only be gained if Laos takes the results of the accession negotiations seriously and implements its obligations proactively -- but its first year has been a good start.

Posted by at August 20, 2014 7:38 PM

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