WTO: 2008 NEWS ITEMS

> Previous news items on Laos

NOTE :
THIS NEWS ITEM IS DESIGNED TO HELP THE PUBLIC UNDERSTAND DEVELOPMENTS IN THE WTO. WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE THE CONTENTS ARE ACCURATE, IT DOES NOT PREJUDICE MEMBER GOVERNMENTS' POSITIONS.

  
 

Australian Ambassador Bruce Gosper, who chairs the working party, described the meeting as “productive and businesslike”. He said: “I think we have made good progress at this meeting although I recognize that there are still areas where further work is needed. With hard work, flexibility and goodwill on all sides, I believe this [least-developed country] accession has the potential to accelerate.”

Thirty WTO members are in Laos’s working party (57 if the EU’s member states are also counted). WTO members are free to choose whether to participate in the working party.

EARLY STAGES STILL. 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” — which goes beyond the facts and includes draft commitments — and eventually the final agreement.

As a least-developed country (LDC), Laos’s application is covered by the 2002 General Council guidelines for accelerating membership negotiations (document WT/L/508). Laos is also land-locked. In order to support the negotiation, Laos is receiving technical assistance from other WTO members. Laos thanked them for this and called for more.


Since the last meeting in November 2007, Laos has improved its market-opening offers on goods and services. The countries interested in negotiating market access bilaterally with Laos said the revised offers will be useful for the bilateral talks. These countries include: Australia, Canada, Chinese Taipei, the EU, India, Japan and the US. (WTO membership agreements require bilateral agreements to be “multilateralized”, ie, whatever Laos agrees bilaterally would have to apply to all WTO members.)

Laos — officially the Lao People’s Democratic Republic (PDR) — “seeks to use its WTO accession as a way to hasten economic integration while fostering real social development,” Laotian Industry and Commerce Minister Nam Viyaketh said.

“This is key to achieving successful negotiations that are also viable and legitimate domestically. In this respect, my concern at this stage is not on improving our market access offers for the sake of playing with the numbers.

“Rather, it is in the well-understood interest of Lao PDR and the world community that we take commitments we can and will implement and continue in our process of reform rather than to agree to commitments which both you and we know we will not be able to adhere to.”

LAWS, REGULATIONS, TRANSITION PERIODS. Laos also reported on a range of new laws and regulations adopted in order to meet WTO requirements (see details).

“We have been working very hard to seize on the good will and enthusiasm members have shown in Lao PDR’s accession,” Dr Nam said. “To achieve progress, Lao PDR has been working hard in bringing related laws and regulations in line with WTO requirements.”

Revisions in the pipeline include reducing the range of goods subject to price controls, import and export prohibitions and licensing.

Other issues being studied or where further work is required include trading rights, customs valuation, rules of origin, subsidies, sanitary and phytosanitary measures (i.e. food safety, animal and plant health), technical barriers to trade (i.e. product standards, labelling, etc), investment measures and intellectual property.

Laos has asked to be allowed transition periods so that it has longer to implement WTO agreements in some areas such as customs valuation, sanitary-phytosanitary measures, technical barriers to trade, investment and intellectual property.

These could be discussed at the next meeting. No date was set but the Chairman (Ambassador Gosper) suggested that it may be held in the first half of 2009.

“I would urge Laos to keep the Working Party regularly informed of legislative developments in Vientiane by submitting translated copies of all WTO-related legislation, including laws enacted recently,” the chairperson said.

“I would also request Lao PDR to update and revise its Legislative Action Plan(s) before the next meeting. This would enable us to track the process of implementing and enforcing a WTO-consistent trade regime in Lao PDR. In this context, I should underscore the critical importance of technical assistance for Lao PDR which, as an LDC [least-developed country], faces particular challenges and capacity constraints. I would urge all TA [technical assistance] providers to continue and, where possible, step up this much needed support.”

 

Next

No date set. Could be in the first half of 2009. Based on the inputs from Laos, the Secretariat will again 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, Philippines, 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, 30 November 2006, 15 November 2007 and 4 July 2008.

 

 

____________

Statement by H.E. Dr Nam Viyaketh,
Minister of Industry and Commerce, Laos
at the 4th Session of the Working Party on the Accession of Laos to the WTO

4 July 2008, Geneva, Switzerland


Mr Chairman
Distinguished delegates
Ladies and gentlemen,

It is a great honour for me and the Lao delegation to take part in this Fourth Working Party meeting. On behalf of the Lao Government, please allow me to express our profound gratitude to you, Mr Chairman, as well as the Accession Division for preparing and providing support to this Working Party to further move the accession process of Lao PDR.

As it is the 4th of July, I also wish to congratulate the delegation of the United States of America and wish them a very happy national day.

Before providing an overview on our achievements since the last Working Party, I am pleased to highlight that the Lao PDR’s development strategy is underpinned by its 6th Five-Year National Socio-Economic Development Plan for 2006-2010, which is built upon a broad-based growth and pro-poor policy in four pillars: i) human-development-driven economic growth; ii) competitiveness, trade and regional integration; iii) social development and focused poverty reduction interventions; and iv) good governance.

Mr Chairman,

As you suggested in your concluding remarks at the end of the Third Working Party meeting, Mr Chairman, we have been working very hard to seize on the good will and enthusiasm Members have shown in Lao PDR’s accession. To achieve progress, Lao PDR has been working hard in bringing related laws and regulations in line with WTO requirements. Allow me to draw your attention to our achievements since the last Working Party meeting in November 2007, in particular:

  • The Standards Law was promulgated in early 2008 which incorporates key principles of the TBT Agreement in the areas of technical regulations, standards and conformity assessment.

  • The Law on Intellectual Property was also enacted, covering copyrights and industrial property. It incorporates the WIPO model law and incorporates key provisions of the TRIPS Agreement.

  • An implementing decree of the Customs Law was adopted outlining customs valuation methods and other key provisions under the CVA.

  • A progress has been made to implement the Enterprise Law.

  • To facilitate cross-border trade, the Government of Lao PDR reduced the number of agencies represented at border check points to 3 agencies namely immigration, customs and quarantine.

  • The Government is now in the formal process of acceptance of Article VIII of the IMF which would formally recognize what is already done in practice — open current account foreign transactions.

  • Improvements occurred in the banking system including the passage of the Commercial Bank Law, strengthening bank supervision, reductions in non-performing loans, and preparation of a financial sector strategy.

  • The centralization of treasury, customs and tax administration has commenced, including the work on a new revenue sharing mechanism and piloting centralization in some pilot provinces. Implementation of the revised Chart of Accounts has progressed well.

  • Technical assistance, including on trade related, are being elaborated with development partners and implemented under the Integrated Framework, including under Window II and the Trade Development Facility (Multi-donors Trust Fund). The aim is to mainstream trade into the national development agenda. Further assistances are taking momentum through the Enhanced Integrated Framework and Aid for Trade.

That foresaid progress has marked an important milestone in the Government’s efforts at economic integration to create an enabling business environment and enhance competitiveness in addition to earlier enactments of laws and regulations in the fields of value added tax, budget, accounting, audit, labour, enterprise and customs. Forthcoming laws and regulations planned to be adopted or amended in the near term include regulations on import and export licensing procedures, pricing policies, foreign exchange as well as laws on investment and veterinary. These, in a nutshell, aim at ensuring non-discrimination, predictability and transparency as underpinned by the WTO principles.

Mr Chairman,

Lao PDR’s economic outlook remains favourable, with continued strong growth. GDP growth remained at above 7 percent in 2007. Output expanded in mining, hydropower, emerging processing industries, agriculture, tourism and other services. Lao PDR has also benefited from increased demand for its exports and large FDI inflows from neighbouring countries as it is surrounded by some of the fastest growing economies in the world.

In addition, despite the fairly stable macroeconomic situation, one cannot underestimate the effect that may cause the risk of rising inflation due to global fuel and food price crisis. After falling to a record low level of 4.5 percent in 2007, overall inflation climbed to 6.4 percent in February 2008. These facts underline the economic vulnerability of the Lao population, and it is our job to ensure that our WTO accession is both perceived and in reality, improves their lives.

Nevertheless, Lao PDR is still facing formidable challenges in terms of its narrow production and export base. Until recently, key merchandise exports were reliant on agriculture and garments. In addition, Lao PDR is also faced with important human resource constraints. We do recognize that the capacity building and sufficient flexibilities are key factors to assist Lao PDR to bring its customs valuation, sanitary and phytosanitary, technical barriers to trade, trade related intellectual property rights and trade related investment measures in compliance with WTO requirements. At the same time, we have to proceed with our reforms with a view to ensuring that our national development objectives are maintained. Therefore, Lao PDR obviously needs time, technical and financial assistance from Members to help us on this effort.

Mr Chairman,

Let me turn now to market access. In agriculture, we have revised in a substantive manner our initial offer and made deep cuts in a wide range of agricultural products of interest to our trading partners. The average tariff for agricultural products has been reduced to 39%. In NAMA, we have again reviewed and made further cuts in the offer, tailored to the specific requests that we received. The average tariff for industrial products is about 26%. We believe that these substantial revisions propose a level of liberalization that has been offered by other recently acceded LDC Members, and well below the average tariffs of WTO Members at a similar stage of development. We hope that this offer will allow us to conclude goods market access negotiations in the very near future.

As for services, we have doubled the number of sub-sectors contained in the offer, which now total some 56 sub-sectors. We are working very hard — together with parties concerned on scrutinizing our services sectors. We have held workshops with the help of USAID and the World Bank, which were very useful and helpful. We also realized how important it is to have the regulatory framework in place to ensure that liberalization has its intended efficiency and developmental effects. Unfortunately, these are often non-existent in Lao PDR and our professional knowledge and institutional capacity in these complex fields are very small.

As Lao PDR is formally a participant in the Doha Development Agenda, Mr Chairman, please allow me to draw a few comparisons with those negotiations. Chairman Stephenson in his draft modalities proposes that LDCs be exempt from any tariff reductions, and that their “contribution” include a substantial increase in their level of tariff binding to the extent possible within their individual development needs. Lao PDR proposes in its offer to bind 100% of its tariff lines at a low ad valorem level. Chairman Crawford in his draft modalities proposes that the market access text on NAMA be applicable LDCs, too. Again, Lao PDR proposes to bind 100% of its tariff bindings at a low level, except for a few of our most sensitive products for which a higher tariff is required. For domestic support, all of Lao PDR’s support is well within de minimus levels. Finally on services, Ministers at Hong Kong noted that LDCs should not be expected to undertake new commitments in the DDA. Nonetheless, Lao PDR has tabled a new offer with twice the average commitments by LDC Members.

If I draw some general comparisons, Mr Chairman, it is not to say “this is the end of the road”. On the contrary, Lao PDR seeks to use its WTO accession as a way to hasten economic integration while fostering real social development. This is key to achieving successful negotiations that are also viable and legitimate domestically. In this respect, my concern at this stage is not on improving our market access offers for the sake of playing with the numbers. Rather, it is in the well-understood interest of Lao PDR and the world community that we take commitments we can and will implement and continue in our process of reform rather than to agree to commitments which both you and we know we will not be able to adhere to.

We have had meetings this week with 8 delegations, including one in this afternoon, and our discussions have been open and productive, and I wish to thank these delegations for their interest and understanding of our economic and social development strategies.

Mr Chairman,

As you have seen Lao PDR is committed to integrate into the world economy and to become an active Member of the WTO. The speed and depth of our liberalization efforts — as well as their sequencing — need to be adapted to both the capacity of our economy to change and our human resources and institutional capacities. We urge WTO Members to base their final requests on the needs of our country rather than on theoretical and/or systemic requests. All we ask is to be able to make commitments in line with our developmental needs and sequence them according to our capacities. In this spirit, we hope to conduct the final part of our negotiations thereby assuming that we have a solid roadmap for our continued effort to reform our economy.

At last but not least, on the behalf of Lao delegations and government of Lao PDR, please allow me to thank and acknowledge the valuable support and contribution from WTO secretariats and Members as well as our development partners. We believe under continuous support and contribution, the WTO accession of Lao PDR will not be in the far sight.

Thank you for your attention.

Jargon buster

accession: becoming a member of the WTO, signing on to its agreements. New members have to negotiate terms:
— bilaterally with individual WTO members
— multilaterally, (1) to convert the results of the bilateral negotiations so that they apply to all WTO members, and (2) on required legislation and institutional reforms that are need to meet WTO obligations

• binding: commitment not to increase a rate of duty beyond an agreed level. Once a rate of duty is bound, it may not be raised without compensating the affected parties.

sanitary and phytosanitary (SPS) measures: measures dealing with food safety
and animal and plant health:
— sanitary: for human and animal health.
— phytosanitary: for plants and plant products

technical barriers to trade (TBT): regulations, standards, testing and certification procedures, which could obstruct trade. The WTO’s TBT Agreement aims to ensure that these do not create unnecessary obstacles

working party (accession): group of WTO members negotiating multilaterally with a country applying to join with the WTO.

working party report (accession): final document passed on to the General Council for approval, covering the applicant country’s commitments on opening its markets and on applying WTO rules.

> More jargon: glossary

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