ASEAN KEY DESTINATIONS
Laos moves towards WTO membership
Gaining membership status with the WTO will boost trade with other countries and help the Lao economy to develop, and the benefits of increased trade should trickle down to help alleviate poverty in poorer regions of the country. However the World Bank has cautioned that Laos still has a number of issues to address before it can be finally admitted to the WTO, including import and export regulations and quarantine laws.
The government is in the process of implementing legislation to address issues surrounding sanitary measures and quarantine law, establishing new customs procedures, addressing other technical barriers to trade and creating greater protection for investor capital in Laos.
In February this year the government incorporated the principle of "national treatment" into Lao law, which establishes the principle of equal trading rights for Lao and foreign owned companies. Equal trading rights are stipulated by the WTO as central to gaining membership of the organisation.
Laos is also being encouraged to continue pursuing a policy of tariff reduction, with the aim that all WTO listed products will have zero tariffs between the Asean Free Trade Area nations by 2015.
As well as working towards achieving WTO membership status, the government is pursuing bilateral trade agreements with foreign governments. It has recently signed agreements with China and Japan, as well as reaching agreements with India and New Zealand which have yet to be ratified.
The government is also close to finalising a trade agreement with the EU, which will give it unprecedented access to western consumer markets.
The latest report by the World Bank's economic monitor found that the Lao economy continues to grow at a robust 8.6 percent. This growth comes largely due to mineral resource extraction and a relaxation of EU laws regarding raw material sources, on which the Lao economy is largely dependent.
Despite its strong growth though, the Lao economy is suffering from increasing inflationary pressures.
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