Laos’ exports to EU decline despite assistance

By:  Vientiane Times, August 24, 2017

VIENTIANE - Exports from Laos to European Union countries have declined and stagnated as the private sector has been unable to fully benefit from the Generalised System of Preferences (GSP).

Exports have also declined because products from Laos did not meet quality standards set by the destination countries, according to the Ministry of Industry and Commerce.

Most Lao exporters still lack understanding of the GSP privilege scheme awarded by the EU to poorer nations, and have not been able to reap the benefits of this preferential tariff system.

Most Lao businesses are small and run as family ventures, with those involved having limited business acumen.

Traders still face problems in obtaining the GSP’s Certificate of Origin to export goods as authorities in the destination countries have not provided full cooperation and facilitation.

Lao exporters also face the challenge of language as the Certificates of Origin required are in English.

However, a joint committee meeting between the Lao government and the European Union in Vientiane last week noted that the EU will try to promote exports by Lao businesses to European markets while conforming to international standards and the obligations of Laos under the World Trade Organisation.

The EU has allocated some 207 million Euros for this purpose during 2014-2020.

The UK is one of Laos’ most important trade partners among European countries. Currently, a wide range of goods from Laos are targeted for export, including clothing, agricultural produce and handicrafts.

Besides the UK, other major European trade partners for Laos are Germany, Switzerland, France, Italy, Denmark and Portugal.

Last year, Laos imported medicine from the UK worth US$869,707, down from US$1 million in 2015. In terms of exports, shoes were placed second after clothing.

Vehicle spare parts, electronic devices, medical equipment and machine tools were imported from several countries in Europe.

The EU’s main exports to Asean are chemical products, machinery and transport equipment while the main imports from the region are machinery and transport equipment, agricultural products, textiles and clothing.

The EU’s imports from Laos are dominated by textiles, clothing and agricultural products, with EU exports to Laos dominated by machinery.