Laos — officially the Lao People’s Democratic Republic — this year added an offer on services to the one on market access for goods submitted a year ago, along with more details on the reforms it is undertaking. And delegations have before them the first compilation of points raised in their multilateral discussions.

“With flexibility and goodwill on all sides, I believe this [least-developed-country] accession has the potential to accelerate in 2008–2009,” said Australian Ambassador Bruce Gosper, who chairs the working party of 29 WTO members negotiating with Laos (55 if the EU’s member states are also counted).

EARLY STAGES STILL. Nevertheless, the talks are still in their early stages. The working party’s discussions are now based on a “factual summary of points raised”, a preliminary document that still has to evolve through some more stages before it can become the “draft working party report” and eventually the final agreement.

Ambassador Gosper said Laos should revise its offers on goods and services following comments from WTO members.

In this third working party meeting, Laos summarized the various reforms it has been undertaking, partly for WTO membership but also for its own development and integration into the world economy.

“We have therefore been working hard to improve the overall investment, business and trade environment,” said Laos’ Industry and Commerce Minister Nam Viyaketh. “We are off to a good start, but the process is an on-going, medium-term endeavour.”

He reported that the Laotian delegation was using the week to hold six bilateral consultations, which he described as “open and constructive”, in addition to the multilateral meeting of the working party. Australia, the US, Japan, Chinese Taipei and Canada agreed that the bilateral discussions had been useful (the EU’s bilateral discussion was scheduled after the working party’s meeting).

“I very much appreciate that members have reiterated their desire to arrive at a package of rights and obligations in line with Laos PDR’s [least-developed country] status,” Dr Nam said.

“Lao PDR is committed to integration into the global economy,” he said. “We consider WTO accession as an important and useful instrument to assure that we progress steadfastly on this path and that our reforms are in conformity with international standards.”

LAND-LOCKED, LEAST-DEVELOPED. When Laos joins the WTO it will be the 10th and final member of the Association of Southeast Asian Nations (ASEAN) to do so. As a least-developed country, it is covered by the 2002 General Council guidelines for accelerating membership negotiations (document WT/L/508). Laos is also land-locked.

Previously Laos did not have a representative in Geneva. It now has an ambassador, and several members saw this as another sign that the membership bid can accelerate. There was a gap of two years between the working party’s first and second meetings, following a wait of seven years after Laos first applied to join the WTO. This third meeting was held a year after the second, and the working party chairperson envisaged a fourth possibly in mid-2008.

Some details

LAOS’S REFORMS. Since the last meeting in November 2006, Laos has submitted written replies to members’ questions, and a revised action plan introducing and implementing laws and regulations, with details on standards (technical barriers to trade and sanitary-phytosanitary measures), customs valuation and intellectual property protection.

In this meeting, the Laotian minister reported the following:

• Laws adopted, including on: value added tax, budget and labour.

• Forthcoming laws and regulations, aiming to be compatible with the WTO e.g. national treatment and non-discrimination including on: import and export procedure, pricing, investment, foreign exchange, veterinary regulations, value added tax, standards, and intellectual property.

• Trade policy: a revised shorter list of export-import goods subject to control or prohibition (October 2006), tariff cuts under the ASEAN Free Trade Area and work with ASEAN members on non-tariff barriers.

• Laos has joined the World Customs Organization, and adopted a decree to implement the new Customs Law. A proposed similar decree for value added tax is in its final stages.

• Finance: a Commercial Bank law was passed in December 2006; amendments expected soon on regulations on managing foreign exchange and precious metals.

• Private sector: its importance is recognized in the Sixth Socio-economic Development Plan (2006-2010), with various laws, regulations and activities in support, including a strategy for small and medium enterprises.

QUESTIONS AND ANSWERS. Most of time of any membership working party meeting is spent going through questions and answers under all the headings covered by the eventual agreement. These become an input into the final working party report.

Among the topics raised in follow-up questions in this meeting were: investment policies including incentives and local content requirements; pricing policies; trading rights; import/export prohibitions and licensing; sanitary and phytosanitary measures (food safety and animal and plant health and safety); technical barriers to trade (product standards and related issues); trade-related investment measures; and intellectual property.

TECHNICAL ASSISTANCE. This is essential to help least-developed countries prepare for membership, both in the negotiations with other WTO members and for the reforms the applicant has to undertake. Laos thanked members for their assistance and called for more.

Next

No date set. Could be before the summer break in 2008. Based on the inputs from Laos, the Secretariat will revise the “factual summary of points raised”.

Background

WORKING PARTY MEMBERS (according to the latest official list, but regularly updated): Australia, Brazil, Brunei, Bulgaria, Cambodia, Canada, China, Dominican Republic, European Union, Haiti, Honduras, Hong Kong China, India, Japan, Rep. of Korea, Malaysia, Mongolia, Myanmar, Nepal, New Zealand, Panama, Paraguay, Singapore, Switzerland, Chinese Taipei, Thailand, United States, Viet Nam, Zambia

CHAIRPERSON: Ambassador Bruce Gosper of Australia

Lao People’s Democratic Republic applied to join the WTO on 16 July 1997. The General Council agreed to set up a working party on 19 February 1998. The working party met on 28 October 2004 and 30 November 2006.

  

Statement by H.E. Dr Nam Viyaketh,
Minister of Industry and Commerce, Laos
at the 3rd Session of the Working Party on the Accession of Laos to the WTO

Geneva, 15 November 2007

Mr. Chairman
Distinguished delegates
Ladies and gentlemen,

It is a great honour for the Lao delegation to take part in this Third Working Party meeting on the accession to the World Trade Organization of Lao PDR. On behalf of the Lao delegation, allow me to take this opportunity to express our gratitude to you, Mr. Chairman. Under your competent chairmanship, I am confident that this meeting will bring Lao PDR further steps closer to accession. I also want to thank all the members of the Working Party for taking a keen interest in Lao PDR’s efforts to fulfil the accession requirements. We would also like to express our sincere appreciation to the WTO Secretariat, the Accessions Division, for their continued support in facilitating the accession process of Lao PDR.

Lao PDR is in the process of deeply reforming its economic system. We have implemented a lot of means and measures in our transition from a centrally planned economy towards a market oriented economy. But much still remains to be done. We believe that the Factual Summary provides an accurate picture of what we have done so far, where we are, the issues we are still facing, and how we go about resolving them.

Lao PDR is committed to integration into the global economy. We consider WTO accession as an important and useful instrument to assure that we progress steadfastly on this path and that our reforms are in conformity with international standards. Our approach in the accession process reflects this basic philosophy. We see Lao’s accession process as a mutually agreed reform process in which Lao PDR commits itself to reforms and a timetable to implement them.

WTO Members are assisting Lao PDR in its reform process to help us overcome the technical and institutional bottlenecks we are facing. We believe that such a cooperative effort creates both confidence as well as support to sustain our reform efforts. This is our view based on the spirit of the 2002 General Council Decision on LDC Accessions and Lao PDR is privileged to accede to the WTO in such a cooperative and mutually reinforcing way.

Before we begin our substantive discussions, please allow me first to highlight some significant improvements in Lao PDR since our last meeting:

• A number of laws have been adopted to provide a legal framework for enabling investment and business environment, including the Law on Value Added Tax, Budget Law and Labour Law. In the near term, the Government is preparing to adopt a number of laws and regulations mainly those in the Legislative Action Plan, including in import and export procedure, pricing, investment, foreign exchange, veterinary, value added tax, standards, and intellectual property. All these legislations are aiming to be compatible with WTO requirements in particular as far as national treatment and non-discrimination are concerned.

• On trade policy developments, the Ministry of Industry and Commerce issued a notice in October 2006 which introduced a revised shorter list of export-import goods subject to control or prohibition. The implementation of tariff reduction commitments under ASEAN Free Trade Area is going well. The Government has also worked with other ASEAN members to identify and further eliminate NTBs that hamper trade flows.

• Lao PDR became the 170th member of the World Customs Organization and is working further to implement the ASYCUDA World. Following the revision of the Customs Law in 2005, the Government has just adopted its implementing Decree. The implementing decree of the Value Added Tax Law is in the final stage of passing.

• In the financial sector, the most recent development is the passage of the Law on Commercial Banks in December 2006. The Law aims to promote a sound financial system and provide a level playing field for commercial banks. The Presidential Decree Law on the Management of the Foreign Exchange and Precious Metals is soon to be amended and this would help in the acceptance of the IMF Article VIII.

• The Sixth Socio-economic Development Plan (2006-2010) further recognizes the importance of private sector development and its contribution in fostering economic growth and poverty reduction. The Enterprise Law promulgated in 2005, represents a significant step forward with respect to streamlining regulations on business registry. The Prime Minister Order No. 37 of October 2006 introduced a time-bound action plan for implementing the Law, including developing the Negative List on enterprise registration. The Third Lao Business Forum met in beginning November this year, drawing over 300 participants from the private sector, government and donors to discuss progress in resolving issues facing the private sector and government plan to enable the business environment. Again, with an eye to WTO principles of non-discrimination and transparency.

• The Small and Medium Enterprise development strategy is under preparation. One of the strategy’s underlying visions is to create a conducive business environment, and enable SMEs to increase their productivity, which in turn will create employment opportunities and improve the availability of goods and services for the people.

We have therefore been working hard to improve the overall investment, business and trade environment. We are off to a good start, but the process is an on-going, medium-term endeavour.

Mr. Chairman,

We are aware that bringing Lao PDR’s trade regime into compliance with WTO principles, rules and norms would entail further positive changes to several areas of current trade and economic policy. In this regard, we look forward to receiving continued comprehensive support and technical assistance from the international community, in particular from our WTO partners, in order to ensure a smooth transition to and implementation of the required legal and regulatory frameworks, for example, in the areas of Customs Valuation, SPS, TBT, and TRIPS. The action plans we have submitted will be further refined in view of the progress made in implementation. We are confident that, by the time we accede to the WTO, we will have sufficiently advanced so that WTO Members will be assured about our adherence to the timetables so that any transition period requested with implementation will be agreed.

In sum, it is important for my Government that trade liberalization and membership in the WTO is perceived by the people to be of an overarching modernization process which will benefit them. This is extremely important to ensure the sustainability of the reforms that are being implemented.

Mr. Chairman,

A brief word perhaps on our bilateral meetings this week related to market access. I am pleased to report that we have held 6 consultations this week with trading partners. These discussions have been open and constructive. They have allowed for a good exchange of views, allowing my delegation to better understand the reasons for the requests being made of Lao PDR, while at the same time allowing Lao PDR to indicate areas of its flexibility and flag sensitivities. I very much appreciate that Members have reiterated their desire to arrive at a package of rights and obligations in line with Lao PDR’s LDC status.

The Government of Lao PDR would like to thank and acknowledge the valuable support and contribution from Members and development partners. I am pleased to inform you that, following the validation of the Diagnostic Trade Integration Study and the Action Matrix last September, Lao PDR is making good progress on the Integrated Framework. The projects proposed under Window II funding were recently approved and their implementation has now begun. The Government is working to initiate the Enhanced IF and the multi-donor trust fund. This exercise under the IF and Aid for Trade would help to ensure that trade is mainstreamed into the national development agenda and trade-related technical assistance is well coordinated.

In conclusion, on behalf of the Lao Government, I wish to reaffirm the enormous importance that Lao PDR attaches to the accession negotiations. We see WTO Membership as a critical step to further integrating our economy into the world trading system. Membership will also contribute to our national economic development and poverty alleviation agenda.

Thank you for your attention.