The Impact of Commodity Export Market Development on Export Performance of the Lao People's Democratic Republic

Some Lao products exported to China increased in value compared to 2008 such as minerals, agricultural products , wood and wood products. In particular, cotton is a new and relatively large export product of Laos to the Chinese market, in 2009 the export value reached 14.232 million USD . However, Lao cotton only accounts for a small part of China's market share and this ratio is on the rise [22].

Particularly for the textile item, it is forecasted that the export turnover to China in 2010 will likely increase slightly by about 14% compared to 2009. On the other hand, China and ASEAN countries have established the ASEAN-China Free Trade Area and officially put this area into operation since January 2010, which is also a favorable condition for Laos to promote the development of free trade and develop the export market with China and ASEAN.

In general, China is both an important and potential trading partner and a competitor of Laos. Therefore, Laos needs to be more active and proactive in promoting trade with China, especially focusing on the provinces of Yunnan and Guangxi, China. One of the ways is to seek agreements at the government level on the exchange of a number of goods in large quantities, on a stable basis, promoting official trade. In addition, Laos should have appropriate policies, attach importance to border trade, and take advantage of this method to increase the export of goods.

2.2.4.3. Countries of the European Union - EU

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Currently, the export turnover of Lao goods to the EU market in recent years has tended to increase, accounting for 60.48% of the total export turnover of the Lao PDR. The groups of goods with stable export turnover to the EU market and continuous increase from 2006 to present are coffee products and textiles. Coffee is one of the goods that is being exploited well and has a relatively large market share in this region. The export turnover from 2006-2009 reached 40.233 million USD.

In addition to objective reasons such as the EU's policy towards Laos has just been formed and is in the process of being perfected, besides that, the awareness of the EU market of Lao enterprises has had clear changes. Therefore, the production, processing, consumption of goods, and export of products to the EU market has been specialized, capturing consumer tastes better. However, if comparing Laos with many other exporting countries to the EU market, it can be said that the competitiveness of Lao goods is still weak. In addition, a disadvantage for Laos is that many European - EU countries do not have much information about Lao goods, on the contrary, Lao export enterprises even lack information about enterprises and the European market.

Part of the reason for the difficulty in penetrating, or even being limited in conquering consumers in the European region, is that Lao enterprises have not really paid attention to investing in product quality strategies associated with brand building and product promotion. Lao product designs and packaging are still too sketchy and monotonous. On the other hand, awareness of the importance of trade promotion is not high, and the introduction and promotion of goods by enterprises in general, and agricultural enterprises in particular, have not received due attention. The ability to collect information and analyze the market of State agencies and enterprises is still very limited. In-depth studies on the EU market for new goods have only been carried out individually and have not been compiled into reference documents.

Therefore, in order for Lao goods to be competitive in the EU market, businesses need to increase investment in building product brands, pay attention to brand registration, design labels and designs, and product packaging, cooperate with raw material producers to register the origin of goods, and ensure the necessary certificates when exporting to the EU market.

The brand is not only of the enterprise but also of the farmer. It is necessary to link with farmers, in which farmers are responsible for ensuring quality and sharing profits with the enterprise.

Moreover, this is especially important for fruits and vegetables when exporting to the EU market. This is a decisive solution for the consumption and export of fresh fruits. For green coffee, the connection between processing facilities and farmers will increase income for both, thanks to increased output and quality of coffee, while also ensuring the development in accordance with natural conditions and more sustainable for coffee trees. The connection between businesses to regulate reasonable purchase and selling prices, and share market information will ensure stable efficiency for both farmers and businesses. In which, factories and large companies can use their brands to consume products for small units on the basis of controlling technology, product quality, training and guiding them in production to create a consistent and stable source of goods, and towards maintaining and developing more new export markets.

2.2.4.4. United States

The United States is one of the countries with the largest trade in goods in the world. The supply of goods to the United States mainly comes from China, Mexico, Canada, EU countries, Australia and Brazil. Although the United States is not yet Laos' largest trading partner, it is one of Laos' potential export markets. During the period 2006-2009, Laos' export turnover to the United States reached 146.096 million USD, accounting for 5.21% of Laos' total export turnover.

In 2008 and 2009, the US economy experienced major fluctuations, which affected the import and export of goods between the US and Laos. In 2009, the majority of exports to the US will

The decrease was mainly due to a sharp decrease in import demand due to the impact of the economic recession. According to statistics from the Lao General Department of Customs, in 2009, the export turnover of agricultural and forestry products to the US only reached 5.752 million USD, accounting for 3.94% of the total export turnover of agricultural and forestry products from Laos to the US in the period 2006-2009.

In 2011, according to the forecast of the International Monetary Fund (IMF), the economic growth of the United States will likely recover slightly, the USD will strengthen relatively compared to most other currencies in the world although the increase is not much. Therefore, the demand for imported goods from the United States is also forecast to increase compared to 2009. Many potential products, export strengths of Laos such as wooden furniture with export turnover of over 200 million USD, with the growth rate of export turnover of this product to the US market increasing to 43.041 million USD in 2010 [26].

The US market is a potential market, with a huge demand for imported goods every year. However, to conquer this market requires not only the efforts of Lao export enterprises, but also the support of the Government and relevant agencies. If Laos has penetrated the market and won the trust of consumers in this market, this is a good opportunity for Laos to build and expand its export market in the coming time.

2.3. IMPACT OF EXPORT MARKET DEVELOPMENT ON EXPORT PERFORMANCE OF THE LAO PEOPLE'S DEMOCRATIC REPUBLIC

2.3.1. Analysis of policies and measures applied by Laos to develop commodity export markets

* International market and trade policy . The consistent and correct international market and trade policy issued by the Lao State has made trade relations with many countries in the world achieve significant progress.

developed and increasingly expanded, has been granted GSP preferences on tariffs and non-tariffs at different levels by over 32 friendly countries in the world for goods originating (C/O) from Laos exported to those countries. But each country has its own preferential policies. In which, the important markets are Vietnam, China, Thailand, EU.

The Vietnamese market is a neighboring, traditional, easy-going market with a socialist orientation. From 1999 - 2000 onwards, Laos and Vietnam have had a preferential policy for each other, reducing import tax by 50% on goods originating from Laos imported into Vietnam, including 29 groups of goods.

Chinese market: China has granted preferential tariffs and quotas to Lao exports with more than 200 Lao origin (C/O) items imported into the Chinese market since 2002.

Thailand market for agricultural and forestry export market in the form of raw materials of farmers through the form of informal export. In particular, Thailand is a market for consuming electricity of Laos, the leading staple product today.

EU market, EU member countries give GSP incentives to products with (C/O) Laos and 100% domestic materials, exempted from import tax (tax rate is 0%).

Japan and South Korea markets. Japan's GSP incentives for Laos include 26 agricultural product groups and 14 industrial product groups. South Korea's GSP incentives for Laos include 60 product groups.

Norway and Switzerland markets offer GSP incentives to Laos including: 78 product groups with the condition that 75% of raw materials are imported and 25% are domestic raw materials.

The Russian market, Czech Republic, Hungary, Bulgaria, Slovakia, Poland, Belarus, Australia, and New Zealand all offer GSP incentives to Laos, but with the condition that 50% of the raw materials are domestic. The US market has allowed 632 Lao products to enter the US market with the condition of exemption from import tax.

It can be said that Laos' export market is very large, with favorable opportunities and incentives from many countries in the world. That allows for a new development step for Laos' export trade in the coming decades.

* About tools and measures

Lao PDR uses many policy tools and measures to develop commodity export markets.

- The State uses planning tools to develop the market, trade, market orientation and activities of traders, of all economic sectors, using economic levers and international trade balance.

- The State uses financial and credit instruments: bank interest rates and tax rates. The Government also develops public services to support commercial activities, regulate business, domestic circulation of goods and regulate import and export. The State does not intervene but only regulates the use of after-tax profits.

- The Lao government has used price tools for a number of essential goods, such as electricity, water, gasoline, postal and telecommunications fees, and airfares. The exchange rate tool is used to stabilize the macro-economy, stabilize the domestic market, stimulate exports, and establish a reasonable trade balance in each period.

The tools commonly used to implement trade policies and management are: 1. Import and export tax tools, business tax, special consumption tax. 2. Administrative tools (export quotas or import quotas); 3. Economic levers; 4. Technical measures. To implement state management innovation on the trade market, the Lao Government and the Lao Ministry of Industry and Trade have continuously and actively improved trade management policies and operating mechanisms, specifically issued many policies to develop the market, such as:

Regulation No. 0106/BTM dated January 25, 2002 of the Lao Minister of Commerce on "Regulations on management of State-managed import and export goods".

Decision No. 1195/BTM dated October 19, 2001 of the Lao Minister of Commerce on "Temporary import and re-export business".

Decision No. 24/TTg dated September 22, 2004 of the Prime Minister of the Lao PDR on orientation for import-export policy.

Order No. 24/TTg dated September 22, 2004 of the Prime Minister on promoting import and export activities, creating all favorable conditions for import and export.

Regulation No. 703/BTM dated June 26, 2002 of the Lao Minister of Commerce on "Management and use of certificates of origin (C/O).

2.3.2. Impact on the export situation of goods of Lao PDR from 2001 to 2010

During the period 2001 to 2010, the situation of Lao goods export generally showed positive and encouraging signs. Many results in export activities were achieved thanks to the expansion of goods export markets.

The scale of Laos's goods exports has been expanding both in terms of turnover and volume. In the period from 2001 to 2009, in general, the development of goods trade has achieved good results with the export turnover in 2001 reaching 324.885 million USD, and in 2009 it increased by more than 248.52 times compared to 2001 reaching 1,124.402 million USD. With the export growth rate increasing gradually over the years, and higher than the import rate, it has helped Laos's goods trade activities in recent years to significantly reduce the large trade deficit compared to many previous years.

In addition, the export of goods has built many industries with high export turnover such as minerals, textiles, electricity, wood and wood products, and coffee. In particular, the spectacular growth of mineral export turnover in the period must be mentioned.

2001 - 2009. During the period from 2001 to 2009, the export turnover of minerals achieved high growth and continuously had a trade surplus despite the general trade deficit. The number of minerals increased sharply over the years. In 2001, the export turnover of minerals reached 3.845 million USD, by 2005 it reached 128.353 million, an increase of 124.508 million USD and in 2009 it reached 523.610 million USD, an increase of more than 500 million USD compared to 2001. In general, these key products accounted for about 80% of the total export turnover of goods in the period 2001-2009 [21].

In addition, the structure of export products has had positive changes. Traditional products such as coffee, sugar , and vegetables have also been diversified in terms of increasing high-quality products, suitable for international consumer tastes. In addition to traditional products, there are now many new types of goods being exported such as dragon fruit, honey, and some types of fresh vegetables. At the same time, export goods have had positive changes in terms of increasing the proportion of processed goods, instead of only exporting raw, unrefined products as before.

One of the other achievements that Laos has achieved is that the competitiveness of Lao goods in particular, and Lao export enterprises in general, has been improved compared to before. In addition to the outstanding characteristics of Lao goods compared to other countries exporting goods due to weather and soil conditions, the improvement of harvesting, transportation, processing, packaging and labeling techniques has helped Lao goods improve their competitiveness with many similar products in the world export market. In addition, along with the application of international standards to the products created, Lao export goods are increasingly standing firm in the market, and continue to conquer new export markets in the region and the world.

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