Thursday, July 14, 2016
Laos - Laos still facing challenges in AEC integration
VIENTIANE - Although Asean has cut more than 90 per cent of tariffs and barriers towards AEC integration, there are behind-the-scenes issues that pose a challenge for Laos, a senior trade official said recently.
Shortly after the AEC officially came into effect at the end of last year, many Asean members began to seek opportunities in trade and investment. The governments of Asean nations have been working hard for decades to eliminate unnecessary measures and barriers in a bid to drive business integration in the region.
Laos has only 7 per cent more to achieve to reach 100 per cent implementation of the various measures but still needs more time to complete the process.
Deputy director general of the Ministry of Industry and Commerce's Foreign Trade Policy Department, Saysana Sayakone, said at a recent seminar on 'Turning Vision into Reality for a Dynamic Asean Community' that although most measures have been fully implemented, there are other less obvious matters that remain a challenge.
"For instance, Laos has to deal with several issues when it comes to the export of goods to neighbouring countries, because product labelling will have to be in the language of the importing country. That is another challenge for the Lao government," he said.
In contrast, products imported into Laos from neighbouring countries do not have to carry labels in the Lao language, one of several disparities between Laos and other Asean countries that need to be addressed.
There are also regulations that have to be complied with in regard to sanitary and phytosanitary measures, Rules of Origin, and other measures.
In the AEC Blueprint 2025, the region is already set to become highly integrated and develop an interconnected economy over the next 10 years. It is also expected to rise globally as one market with each member gaining from each other's strengths, thus increasing its competitiveness and opportunities for development.
If Asean was a single entity, it would rank as the 7th largest economy in the world, behind the United States, China, Japan, Germany, France and the UK.
AEC acknowledges the free movement of skilled labour, goods, services and investment within member countries. Obviously, many Asean employees are now working at hotels, restaurants and other service sectors in Laos, and the trade between Laos and Asean is on the rise.
In 2015 alone, intra-Asean trade was worth more than US$2 trillion, covering over 20 to 25 per cent of the total trade value of Asean. It is projected that its trade value will continue to rise over the years to come, according to a senior trade official.
Meanwhile intra-Asean investment stood at US$22 trillion, equal to 17-18 per cent of the total value of Asean investment in the same year.