Laos has begun to reduce import tariffs in line with Asean Free Trade Area (AFTA) policy but has until 2018 to fulfill all of its obligations.
Minister of Industry and Commerce Dr Nam Vinhaket yesterday presided over the opening ceremony of a meeting of the Lao National AFTA unit in Vientiane to review and plan for the fulfillment of its obligations under the AFTA framework.
According to a press release from the meeting’s organising committee, as one of the newer Asean member countries, Laos has until 2018 to eliminate all import tariffs on goods imported from other Asean countries. This is part of moves to create a single Asean market in which all tariffs on goods are removed.
The new Asean member countries are Cambodia, Myanmar, Laos and Vietnam. These countries need time to build their capacity to fulfil all their obligations under the AFTA.
The older Asean member countries – Brunei, Thailand, Singapore, Malaysia, Indonesia and the Philippines – have been reducing import tariffs to zero since 2010, opening up the regional export market.
Laos has eliminated tariffs on 7,525 items in recent years. The country has also reduced tariffs on 9,110 other items to below 5 percent.
Asean nations have begun to streamline customs procedures for the clearance of goods, as well as eliminating non tariff measures, developing the Asean Single Window and the Asean Trade Repository, improving investment protection, providing dispute settlement and better property rights protection, and removing the obstacles hindering the movement of professional and skilled workers.
Asean hopes the creation of a free regional market will enhance competitiveness in the region, attract foreign investment and boost economic growth.
One of the main reasons that Laos needs until 2018 to cut import tariffs is that it relies on these fees as a significant source of income.
Although the government introduced Value Added Tax as a replacement source of revenue, it still needs time to implement this tax comprehensively and ensure that all monies owed are collected.
According to the press release, Laos and other Asean nations have signed Asean Plus One agreements with China, Japan, the Republic of Korea, India, Australia and New Zealand. Asean member countries are now in the process of ratifying these agreements.
One of the most urgent tasks facing Laos is to fully eliminate tariff barriers, specifically after encountering problems in exporting sweetcorn to Thailand, which contravene the Asean Free Trade Area Agreement.
Published with the permission of Vientine Times