Business Guide to help Lao businesses increase exports to European Union

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International Trade Center (ITC)
International Trade Center (ITC)

The International Trade Centre (ITC), in collaboration with the Ministry of Industry and Commerce in the Lao People’s Democratic Republic (Lao PDR), launched the country’s EU Everything But Arms Business Guide for Lao PDR.

It will help Lao businesses to understand the application of the EU’s preferential market access schemes; and guide Lao exporters on complying with technical and regulatory requirements to export effectively to the European Union and benefit from duty free access under the Everything But Arms (EBA) scheme.

The guide was developed as a component of the ASEAN Regional Integration Support from the EU Plus – Lao PDR (ARISE Plus Lao PDR), funded by the European Union.

Background

As a least developed country, Lao PDR is entitled to duty-free, quota-free exports for all goods to the European Union (EU) market, except for ammunition and arms, under its ‘Everything But Arms’ scheme. According to a 2020 ITC study, Lao PDR only uses 27% of its total export potential to the EU, while 73% remains unused. Lao exporters have a significant opportunity to take advantage of this export potential and benefit from this duty-free access under the EBA scheme.

Lao PDR is scheduled to graduate from least-developed-country status in 2026, after which a three-year transition period will apply before its duty-free access is withdrawn. This means that Lao exporters have at least another eight years during which they can benefit from the duty-free access to the EU market. Lao PDR has potential to further grow its exports to the EU market by leveraging on the market access opportunities available under the EBA scheme.

The Business Guide sets out to increase awareness of these opportunities and capacitate Lao exporters to make use of the market opportunities. In addition to a general section, the guide also focuses on five product sectors with export potential: raw agricultural products; processed food products; garments/textiles; footwear; and processed wood products.

Quotes

“The second wave of the Covid-19 pandemic in 2021 has caused the government to put on some tough measures. Consequently, it has set back the efforts for country’s economic recovery – thus, trade is fundamental in supporting social and economic stability. With this incredible opportunity, Lao producers can take advantage of existing opportunities and increase their exports to the EU, while simultaneously creating more jobs for local people.”

Xaysomphet Norasingh, Director General, Department of Trade Promotion, Ministry of Industry and Commerce

“Currently, Lao’s exports to the EU account for around 5% of total exports, but these exports have potential to grow further. To establish a market presence in the EU market, Lao exporters are required to meet certain requirements regarding the quality of the products, key standards and market preferences, among others. The European Union is hopeful that this guide will engage more Lao exporters participating in duty-free and quota-free access to the European market under the Everything But Arms scheme.”

Vincent Vire, Head of Cooperation, Delegation of the European Union to Lao PDR

“Under the ARISE Plus Lao PDR project, ITC is working towards facilitating regional economic integration, increasing awareness on trade preferences for exports, including to the EU, and strengthening support for trade and investment promotion in targeted sectors. The Business Guide is a tool for Lao PDR to understand the opportunities available and work through the requirements to be met to effectively export to the EU under the EBA scheme. Further, to ensure that the learning is effectively passed on to stakeholders, ITC is delivering a series of trainings based on the Business Guide to make stakeholders aware of its existence and capacitate them to use it.”

Jean-Sébastien Roure, Senior Officer, Business and Trade Policy, Division for Market Development, International Trade Centre

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