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Non-Tariff Barriers Facing Lao Exporters. NTM Workshop, World Bank 4-5 May 2006, Krabi, Thailand. Background. Necessary to bear in mind the characteristics of Laos as a landlocked country.
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Non-Tariff Barriers Facing Lao Exporters NTM Workshop, World Bank 4-5 May 2006, Krabi, Thailand
Background • Necessary to bear in mind the characteristics of Laos as a landlocked country. • Dealt not only of NTBs imposed by trading country partners but also of mechanisms within Laos or the lack of these that limit exporters.
Lao Export Profile • In the 1990’s, export growth was around 15% per year; • In first 6 months of 2004, this increased by 22% • Mainly driven by garments, electricity, mining and coffee.
Composition of Lao Export Goods • Highly concentrated to 3 product categories: • Wood and wood products • Garments • Coffee
Cont: • These products account for 96% of total exports of merchandise goods (electricity not included). • Almost 80% of exports are directed to EU and Thailand.
Cont: • Insufficiently exploited export potential include: • Secondary wood processing products; • Knitted garments; • footwear; • Livestock-based products; and • Light manufacturing
Major Export Product Categories • GARMENT • Accounts for 25% (equal to electricity) of the total exports; • EU is the biggest recipient country/region, 88% in 2000 and increased to 91% in 2003.
Cont: • WOOD AND WOOD PRODUCTS • From 2001-2003, this accounted for 17% of the total exports • Main destinations were Thailand (76%), Japan (14%), China (12%) and Taiwan (3%)
Cont: • COFFEE • From 2001-2003, coffee products accounted for 3% of the total exports. • Since 1995, EU has emerged as the dominating recipient country accounting for 50-60% of the Lao coffee exports.
Other export products • TEXTILE HANDICRAFTS • Estimated total export value as a whole was approximately 12 M dollars in 2002-2003. • Though having the benefits of GSP, destinations are mainly to EU countries, Singapore, Japan, and USA. Informal border trade to Thailand occurs.
Cont: • OTHER AGRICULTURAL PRODUCTS AND NON-TIMBER FOREST PRODUCTS (NTFPs) • These include commercialized products such as cardamom, broom grass, sticklac, mulberry and resin • Industrial crops such as: soybeans, job tears, sesame seeds, ground nuts.
Cont: • Trading partners are neighboring countries like Thailand, Vietnam and China using border trades with a few cases of exports to EU like France. • Data indicates quite fluctuated export figures: 6.6 USD in 2000-01, 8.2 USD in 2001-02 and 5.7 USD in 2002-03.
Main Products affected by NTMs • Internal restrictions: • Wood (timber, natural wood) • External barriers: • Garments (textile, cloth materials) • Handicrafts (silk woven products)
Types of NTMs • Internal measures that affect export: • Unclear and changing regulations and procedures. • Restrictive practices: Administrative procedures where too many steps and paper works are required to get ones’ products approved
Cont: • Irregular amounts that have to be paid. • Extra expenses paid (“to make the process faster”) which cannot be declared as there are no receipts issued for these. • Customs valuation in which charges are not standard or the same.
Cont: • External Measures • Most prohibitive were transport costs due to monopoly in Thailand • Third country transit costs and paper works on Thai side • Customs services and procedures both in Thailand and in Lao side
Cont: • Pre-shipment inspection: Double checking that cause delay and extra charges both on the Lao and Thai side • Technical barriers; technical regulations and standards.
Cont: • Strict requirements set and additional costs to testing in other countries. • Lack of laboratories in Laos for testing that can be accepted internationally.
Countries Most Constraining • Thailand • EU • Japan • Laos
SABAIDEE, KOP CHAI LAI LAI
