Border bottlenecks hinder Lao imports: Study

VIENTIANE (Vientiane Times/ANN)  Limited procedural knowledge amongst both government authorities and traders at border areas is being blamed as the cause of trade bottlenecks at borders between Laos, Thailand and Vietnam.

However, while problems in some areas are well known, a study conducted by the Department of Import and Export of the Ministry of Industry and Commerce under the Trade Development Facility project Phase II says Lao traders are generally unaware of these issues.

Since they hire brokers from Thailand and Vietnam to handle transit procedures, this may not be surprising.  It also means Lao traders generally aren’t directly responsible when problems occur. 

One trader said that one Vietnamese border crossing isn’t functioning properly as there are insufficient Customs and Ministry of Transport staff posted there to carry out joint inspections, the report noted.

It was also found that Lao traders have limited awareness or understanding of the laws and regulations in the countries with which they regularly conduct transit trade.

Lao, Thai and Vietnamese authorities often do not follow their own departmental regulations related to transit trade at borders. The report found that it is not unusual for border authorities to arbitrarily create new regulations which invariably result in higher fees charged to traders.

Transporters and customs brokers are also not fully transparent in their interactions with traders.  They often take advantage of a trader’s lack of procedural understanding and will charge higher than necessary fees.

Lao Customs has suggested that it would be a good idea to place Lao staff at Thai ports of entry to serve as liaison officers between Lao traders and Thai authorities.

A similar arrangement exists between Laos and Vietnam at the Dansavan-Lao Bao border crossing.  This is a result of the Coordinating Committee on Implementation of the ATIGA agreement between the two countries. The Asean Customs Transit System agreement also allows for similar agreements to proceed.

Lao Customs recently reported that they plan to fully implement the Greater Mekong Subregion Cross-Border Transport Agreement in the near future. Along with the Asean trade transit system, it is expected that trade in the region will become faster, easier, and cheaper. Laos, however, will require considerable technical assistance to implement these initiatives.

Laos and its neighbours are signatories to numerous international agreements regarding the transit of goods. These agreements, if fully implemented, would increase the speed and lower the cost of trade for Lao businesses.

Implementation of these agreements has been hampered by several factors, the most significant being the poor practices by government authorities.  As such, traders routinely encounter administrative and regulatory bottlenecks during the shipment of their goods.

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