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WEEKLY NEWSLETTER
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Laos
Index
Because Laos is a landlocked country, its foreign trade
volume
is highly dependent on transit routes through neighboring
countries. Bangkok serves as the major port, but the
Vietnamese
ports of Da Nang--the most distant from Vientiane at 1,000
kilometers--and Cua Lo--the closest to Vientiane at 460
kilometers-
-are also used. The Express Transit Organization of
Thailand has a
monopoly on the LPDR's transit business through Thailand,
initially
imposed as a way to regulate trade in strategic goods.
Transshipment of goods through Vietnam and especially
Thailand
increased the prices of Laos's goods greatly--by as much
as 60
percent, or, according to some sources, as much as 300
percent--
severely reducing the competitiveness of export
commodities on the
world market. In December 1991, and again in the fall of
1993,
Cambodia offered Laos the use of its seaport at Kompong
Som, but
Cambodia's poor infrastructure and lawlessness make this
an empty
gesture.
As of 1991, limitations on trade resulting from
transshipment
began to ease. Plans were made to establish a Thai-Lao
joint
venture responsible for handling transit goods to Laos,
with the
potential of cutting transit costs in half. To further
reduce the
Thai company's monopoly on transshipment of goods to Laos,
Thai
import duties on more than twenty agricultural goods,
including one
of Laos's major exports, coffee, were reduced from a 40 to
80
percent range to a maximum of 20 percent. By 1991 Thailand
had
expanded from three to eight the number of approved border
transit
points with Laos. Completion of the first bridge over the
Mekong,
which opened in April 1994, is likely to further encourage
regional
trade.
Data as of July 1994
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