Vientiane, December 5, 2012 --- The World Trade Organization (WTO) has approved Lao PDR’s bid to become a member. The green light from the WTO is the culmination of a 15 year process that has seen negotiations with international trading partners and the implementation of reforms to modernize trade and investment in the country.
Lao PDR, also known as Laos, is classified as a “least developed country” and, as a result, received special and differential treatment during the accession process. This meant that it did not have to give the same level of commitments as other acceding countries. It has also been given more time to fully implement these.
What WTO membership means for Lao PDR
“By acceding to the WTO, Laos is showing its commitment to operating a rules based system of economic governance,” said Keiko Miwa, the World Bank’s Country Manager for Lao PDR, “It's sending a strong signal that it is now open for business,”
She adds: “WTO accession is - more importantly - an important milestone for Lao PDR as it moves along its development path. WTO commitments will help the country diversify away from natural resource dependency, attract quality investment in the non natural resource sectors, create jobs, and reduce poverty,”
Membership means that the WTO principles of non-discrimination, transparency, and predictability (including confidence that trade barriers aren’t raised arbitrarily) are incorporated into Lao law. In addition, substantial reform measures needed to bring laws in line with WTO agreements on subsidies, price controls, trade restrictions, state enterprises, and more.
Market access commitments have been made, allowing foreign investors to access 10 service sectors. These include banking, telecommunications, distribution, health and environmental services, tourism, construction, and air transport. As such, there are limits on how the government now regulates these sectors. The average tariff on imported goods has also been bound at 18.8 percent.
“WTO membership for Laos means that we will attract more foreign direct investment and have more power to negotiate with trade partners,” says Prachit Xayavong, Vice President of the Vientiane Capital Chamber of Commerce and Industry.