Dr Laohoua Cheuching, Deputy Director of the Foreign Trade Policy Department, Ministry for Industry and Commerce of the Lao PDR, officials of the Lao government, members of the private sector, ladies and gentlemen. A very warm welcome to you all and thank you for sparing the time to come to today’s forum.
I am very pleased to be able to address today’s event. The British Embassy is proud to work with the Ministry of Industry and Commerce on this event and I am very grateful to the Ministry for enabling us to work with you. We have established a good working relationship and today’s event is a clear sign of our commitment to work with you on these important issues.
We are living in a period of perhaps unprecedented economic expansion in the world. The emergence of new economic powers, especially here in Asia, along with globalisation and the widespread use of the internet have opened up the world to so many new economic possibilities. For example, it is estimated that by 2050 emerging economies will be up to 50% larger than those of the current G7, including the United Kingdom. As a result, the size of the global economy will increase.
As an open and trading economy, the UK understands that prosperity depends on global economic stability and growth, access to new markets and new sources of inward investment. We will only thrive in the long-term within a healthy global economy. The UK is clear that an open global trading system is vital to economic success and we are committed and continue to work on this free trade agenda.
The World Trade Organisation (WTO) plays a crucial role in the promotion of global free trade. As we approach the 20th anniversary of its inception in January 2015, much progress has been made in global trade facilitation though a global free trade deal and conclusion of the Doha Round has of course proved elusive since its launch in 2001. The recent adoption of the Trade Facilitation Agreement by the WTO membership was an encouraging sign that the next WTO Ministerial meeting in December 2015 might be able to reach a final deal to conclude the Doha Round.
However, in the meantime, the WTO structure enables a range of trade facilitation measures between its membership (of 160 countries) in areas such as trade rules (opening markets, lowering tariffs and trade barriers) , dispute resolution and a framework for governments to negotiate trade agreements (the WTO currently consists of 16 multilateral agreements to which all WTO members are party and two plurilateral agreements to which only some WTO members are party).
These measures have enabled great progress in global trading in the last 20 years because they have created the legal ground rules for international commerce which helps trade flow as freely as possible, key for economic development and prosperity. These rules are transparent and predictable (and enforceable) so that governments, companies and individuals know what to expect when they do business on the international stage. And those of you here today who are in business know that transparency and consistency are key elements when taking business decisions.
So what does all this mean for the Lao PDR? As an emerging economy in a dynamic region, it is absolutely vital that Lao PDR is well prepared to meet the challenges of this inter-connected trade world. The successful accession of the Lao PDR to the WTO in February 2013 was a hugely important milestone on this journey and I would like to congratulate once more the vision of the leadership of the Lao PDR and the hard work of the Ministers and officials who negotiated Lao accession. In time, this decision will be seen as perhaps one of the most important taken by this country as trade is a vital tool in today’s world in order to progress economic development.
In addition, Lao membership of ASEAN and the advent of the ASEAN Economic Community in 2015 (AEC) are further key drivers of the need for Lao PDR to be well-prepared for global and regional trading. Once established, the AEC will be one of the biggest trading blocks in the world with more than 600 million inhabitants and a combined GDP of £ 1.53 trillion, making ASEAN the seventh largest economy in the world.
As with the WTO, the AEC will have a series of rules and procedures to enable free trade between the ten ASEAN member states with some special provisions for the least developed members. The key point though is that these rules and procedures will be applied across the ASEAN bloc. So whether you are trading with Singapore or Indonesia or Malaysia, and of course with Lao PDR, the basic rules remain the same.
So membership of the WTO and the AEC will present both opportunities and threats for Lao PDR. Opportunities because membership enables Lao PDR to compete on a level playing field when looking to expand into foreign markets. And threats because it will be easier for companies from other countries to do business here. So Lao business will need to increase its competitiveness both to seek new markets outside Laos and to compete here in Laos itself. This may be a tough proposition but, in time, the overall result will be a much bigger economy and much stronger Lao companies (and we will hear from some of the most successful Lao companies who have expanded beyond Laos later on).
The purpose of today’s event is to highlight, particularly to the private sector but also to government Ministries, what the WTO and AEC mean for the Lao PDR and how to make the most of the opportunities and to mitigate the threats. The Ministry of Industry and Commerce has already done excellent work in this area and I would like to congratulate them on initiatives such as the Lao Trade Portal and their ongoing work in ASEAN trade negotiations, as they seek to get the best deal they can for Laos.
But the Ministry cannot do this alone. Free trade and open markets involve a wide range of actors from both the private and public sectors, working together to ensure that each country is in the best possible condition to meet the challenges of trade in the 21st Century.
So it is highly appropriate that today’s event involves individuals from both sectors to share and learn from each other and I am grateful to see so many of you here today.
I wish you a successful workshop and I look forward to hearing your discussions later on.