The new Vietnam-Laos trade agreement, signed by Vietnamese Minister of Industry and Trade Nguyen Hong Dien and Lao Minister of Industry and Trade Malaithong Kommasith on April 8 in Vientiane, Laos, aims to create more favorable conditions for import-export activities and strengthen bilateral trade relations.

Overview of the signing ceremony.  Photos: moit.gov.vn

The signing was part of a working visit to Laos by a delegation from the Vietnamese Ministry of Industry and Trade, led by Minister Nguyen Hong Dien, from 6 to 8 April.

At the pre-signing talks, the leaders of both sides agreed that the enforcement of the new agreement would help resolve issues that arose during the implementation of the 2015 Vietnam-Laos Trade Agreement and further improve the legal framework for trade between the two countries.

The review and provision of incentives on tariff rates and pre-agreed import duty reduction schedules between Vietnam and Laos in ASEAN will facilitate import and export activities and further promote Vietnam-Laos trade relations.

The previous version of the Vietnam-Laos trade agreement was signed in 2015. Since then, the governments of the two countries have instructed their respective Ministries of Industry and Trade to negotiate, revise, and amend the agreement to adapt it to the current context. After three years of negotiations, both sides have reached an agreement on the content of the new trade deal.

Speaking at the conference, Minister Nguyen Hong Dien said that from 2012 to date, bilateral trade between the two countries has grown by 10-15% per year, but has only reached US$1.65 billion, which does not reflect the potential and special relationship between the two countries.

Vietnamese oil is one of the commodities encouraged for increased export to tap the trade potential between Vietnam and Laos, he added.

The Vietnamese Minister stressed that Vietnam has a high demand for importing various raw materials and electrical energy from other countries, including Laos. He said the neighboring country is gradually becoming an important source of products and raw materials for Vietnam within the ASEAN bloc.

During the discussion, Minister Malaithong Kommasith asked for Vietnam's assistance in sharing experience in oil market management and ensuring a stable supply of petroleum products.

Delegates from the Vietnamese Ministry of Industry and Trade delegation led by Minister Nguyen Hong Dien.

In response, Minister Nguyen Hong Dien said the Ministry of Industry and Trade was ready to help Laos secure oil supplies. Recently, the ministry has encouraged Vietnamese traders to link up with companies in Laos to increase supply and stabilize the oil market in Laos.

Minister Dien also mentioned that Vietnam has issued a plan for strategic reserves and supply of petroleum and natural gas for the period of 2021-2030.

The ministry will create favorable conditions for businesses from both countries to cooperate in building petroleum storage facilities, he added.

In the long term, to ensure domestic supply, he suggested that the Lao government should maintain a stable exchange rate and predict and ensure the supply of foreign exchange.

He also recommended that Laos create favorable business conditions to ensure profit for leading oil companies, whose commodity price is controlled by the state.

"This is an important condition to ensure supply to the market," said the Minister.

After signing the new agreement, the two ministries also witnessed the signing of a memorandum of cooperation between the General Department of Market Surveillance (Vietnamese Ministry of Industry and Trade) and the Department of Business Competition and Trade Inspection Bureau (Lao Ministry of Industry and Trade); and a memorandum of cooperation between GP Holdings, the National Research Institute of Mechanical Engineering and Phonesack Group to cooperate in the construction of coal storage facilities and conveyor belts.