Lao agribusiness set to benefit from WTO membership

Lao agribusiness set to benefit from WTO membership

Agribusiness can expect to get a major cash injection when Laos joins the World Trade Organisation (WTO) at the end of this year, a senior official from the Lao National Chamber of Commerce and Industry (LNCCI) has said.

“In my opinion, agribusiness will be one of the sectors to benefit from Laos' membership in the WTO,” LNCCI Secretary General Mr Khanthavong Dalavong said on Monday.

Mr Khanthavong's comment comes after Ukraine agreed to back Laos' membership in the global trading body. Ukraine's vote was the last of nine needed from various countries, as required by the WTO. It is expected that Laos will be accepted as a WTO member in October this year.

Mr Khanthavong said it was the government's policy to promote foreign investment in agribusiness as part of efforts to diversify the country's economic base and to end reliance on the natural resource sector, including mining, to ensure sustainable economic growth.

Laos still has a large area of fertile land and most people are farmers, which makes the country an attractive investment proposition.

Mr Khanthavong was optimistic that overseas businesses would invest in Lao agribusiness, in particular the cultivation of organic fruit and rice for export. He noted that global food prices are increasing rapidly.

“Food is very important for everyone so overseas operations will invest in agribusiness so they can import food to their own countries,” he said.

At present, some foreign investors are reluctant to invest in Laos because they cannot import goods produced here due to high tariffs. Only the European Union and some other developed countries charge a low import tariff on Lao products.

Once Laos joins the WTO, it can export to other member countries at low tariffs.

Mr Khanthavong said the government had amended a number of laws to encourage foreign investment in agribusiness. The government has also improved its import and export regulations in line with WTO requirements.

He also said the LNCCI was providing information for Lao business operators about WTO regulations so they could gain the most benefit from the trading opportunities that would open up.

Mr Khanthavong said one of the major concerns that various sectors have to address is the enforcement of laws and regulations. He also said some of Laos' economic laws must be further amended to facilitate and boost domestic and foreign investment.

Laos would have to work on the certification of organic products, he said, explaining that Lao products must be certified before they can be exported. Many countries have standards in relation to imported products and Laos must become familiar with these regulations before goods can be exported to other WTO members

vientiane times