The GSP program, which is designed to promote economic growth in developing countries, provides preferential duty-free treatment for over 3,500 products from 127 designated beneficiary countries (BDCs) and territories, including 44 least-developed beneficiary developing countries (LDBDCs) which is not consistent with Lao PDR. An additional 1,500 products are GSP-eligible only when imported from LDBDCs for which the U.S will provide for the status of least-developed beneficiary developing countries.
Lao PDR has not yet received GSP status and has already proceeded with application for GSP in the middle of April 2013. The Office of the U.S. Trade Representative (USTR) has informed that the initiation of process has been started in order to review the eligibility of Lao PDR and Burma to receive GSP status from the U.S. If Lao PDR fully meets two conditions for the status above it will receive preferential duty-free entry for up to 5,000 products. The GSP application mission has had the full contribution of all government authorities with attending the negotiation session, hearings, and giving an explanation to U.S authorities, giving clarifications on all the various topics related to the GSP requirement. At the end of this application process, the U.S held a public hearing on 4 June 2013 to gather testimony regarding the eligibility of the Union of Burma and the Lao People’s Democratic Republic for GSP trade benefits, under the chairmanship of Mr. William Jackson, Deputy Assistant U.S. Trade Representative for GSP and Chair of the GSP Subcommittee and GSP Subcommittee representatives participating in the hearing. On the Lao side the lead was taken by H.E. Seng Soukhathivong, Ambassador, Embassy, Washington DC. In the public hearing ceremony H.E. Seng Soukhathivong, expressed thanks the USTR for organizing this Public Hearing on GSP designation for Lao PDR on behalf of the Government of Lao PDR, and also reported the achievements related to the Trade area which Lao PDR has attempted and strived for. This is a long awaited moment and Lao PDR is well positioned to benefit from such a program. In light of the U.S-Lao PDR Bilateral Trade Agreement and Lao PDR’s recent membership of the World Trade Organization along with other international organizations, Lao PDR has made steady progress in meeting the expectations and requirements of the international community in the area if economic integration which has shown that Lao PDR has reviewed and enacted over 90 laws and regulations from 1997 to 2012, covering a wide range of areas including trading rights, import licensing, customs valuation, investment, sanitary and phytosanitary measures, technical barrier to trade, and intellectual property rights, copyrights, trademarks and patents. The Bilateral Trade Agreement and WTO membership is an excellent guide for the social-economic reform of Lao PDR, which is privileged in seeing the benefits of these reforms. Lao PDR has experienced a protracted period of sustained growth rate of its economy above 7 percent on average over the last decade. The World Bank has projected about 8 percent growth rate for 2013. Foreign direct investment has increased from $25 million in 2002 to almost $ 3 billion in 2011. Over the same period, its exports have gone up from $300 million to almost $2 billion, and imports from $446 million to almost $2.5 billion.
The U.S-Lao economic relation is growing rapidly and holds considerable promise for the future. The U.S. goods trade surplus with Lao PDR was recorded at $8 million in 2012, shifting from a deficit of $33 million in 2011. The U.S. goods exports in 2012 were $33 million, up 27.5 percent from the previous year. Corresponding U.S imports from Lao PDR were $25 million, down by 57.5 percent. Lao PDR is currently the 176th largest export market for the U.S. in terms of trade in goods.
Lao PDR’s joining the multilateral trading system and preparation for the ASEAN Economic Community has greatly contributed to improvements to the business environment and trade facilitation. In 2012, Lao PDR launched the so-called Lao Trade Portal, an online resource that seeks to provide all trade-related information from Lao government agencies in a single site: http://www.laotradeportal.gov.la/.
In additional, Lao PDR has worked closely with the International Labor Organization (ILO) and has ratified several ILO’s conventions, which demonstrates its commitment to compliance with international labor rights standards.
All accomplishments above show the progress and potential of Lao PDR in demonstrating its eligibility to the Trade Benefits of the GSP.
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