Non-Tariff Barriers Facing Lao Exporters

1
Non-Tariff Barriers Facing Lao Exporters

• NTM Workshop, World Bank
• 4-5 May 2006, Krabi, Thailand

2
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.

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Lao Export Profile

• In the 1990s, 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.

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Composition of Lao Export Goods

• Highly concentrated to 3 product categories
• Wood and wood products
• Garments
• Coffee

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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.

6
Cont

• Insufficiently exploited export potential
  include
• Secondary wood processing products
• Knitted garments
• footwear
• Livestock-based products and
• Light manufacturing

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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.

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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)

9
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.

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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.

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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.

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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.

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Main Products affected by NTMs

• Internal restrictions
• Wood (timber, natural wood)
• External barriers
• Garments (textile, cloth materials)
• Handicrafts (silk woven products)

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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

15
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.

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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

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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.

18
Cont

• Strict requirements set and additional costs to
  testing in other countries.
• Lack of laboratories in Laos for testing that can
  be accepted internationally.

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Countries Most Constraining

• Thailand
• EU
• Japan
• Laos

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• SABAIDEE,
• KOP CHAI LAI LAI

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Summary NTBs (external)
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Internal Factors
23
Cont