Bilateral trade between Cambodia and Laos is predicted to pick up after a recent series of key meetings between national leaders and prominent members of the business community, following a reported jump of roughly three-tenths last year over 2021.
A Cambodia Chamber of Commerce (CCC) delegation accompanied Prime Minister Hun Sen on his February 13-14 visit to Laos, led by its president Kith Meng, and met with the Lao National Chamber of Commerce and Industry (LNCCI) on the second day, at the “Laos-Cambodia Business Meeting” held at the latter’s headquarters, the CCC affirmed in a statement.
At the meeting, the two chambers – their respective country’s apex business associations – discussed ways to boost Cambodian-Lao economic relations as well as forge trade and investment ties between businesses, the statement said.
They also exchanged views on the investment climate and opportunities in the two countries, along with sectors deemed to present bright economic prospects, it said.
It added that the two sides “agreed” to pen a memorandum of understanding (MoU) to encourage business between the two countries as well as promote the exchange of information and policies.
Accompanying images of the meeting show Meng and his LNCCI counterpart Oudet Souvannavong signing a document, which CCC vice-president Lim Heng confirmed was indeed the aforementioned MoU.
Heng told The Post on February 15 that Cambodian-Lao trade relations remain limited, despite public and private efforts to bring up cross-border trade that centre on the provinces along the frontier – Preah Vihear, Stung Treng and Ratanakkiri on the Kingdom’s side, along with Champasak and Attapeu in Laos.
According to CCC data, the two-way trade topped $160 million in 2021, rising to about $210 million last year.
Market platform Trading Economics indicates that imports from Laos of items in the “mineral fuels, oils, distillation products” category – or Chapter 27 of the Harmonised System (HS) – made up $142.49 million, or nearly 89 per cent, of the more than $160.9 million worth of goods collectively that Cambodia exported to and imported from Laos in 2021.
Regardless, Heng expects two-way trade to rise, underpinned by at least one planned railway link and the potential fruits of other recent commitments made by the two governments, as well as benefits resulting from the two countries’ memberships in ASEAN and the RCEP (Regional Comprehensive Economic Partnership).
Laos – which is landlocked – could ship goods through any proposed railway links to export elsewhere via seaport in Cambodia, he suggested.
“Following the prime minister’s visit and the MoU signing between the leaders of the Cambodian and Lao chambers of commerce, I see trade relations between the two countries gaining momentum,” he said.
Cambodia and Laos trade sizeable volumes of agricultural products, he said, adding that the Kingdom is a major buyer of Lao electricity. Cambodian players have also gained a significant presence in the Lao financial sector, Heng added.
At a meeting with Lao Prime Minister Sonexay Siphandone on February 13, Hun Sen touched on bilateral cooperation on electricity and coal issues, describing Laos as an ASEAN “battery” on which Cambodia depends.
The Cambodian premier briefed Lao attendees on the Kingdom’s new Law on Investment, which he said provides better conditions and a more favourable environment for foreign investors.
Hun Sen called on both countries to fast-track negotiations on a double tax avoidance agreement (DTA) and hold more business matching events, exhibitions and seminars, to further boost bilateral trade, investment and economic activity.
The meeting also covered tourism-oriented land and air links, with a focus on connecting Laos’ Luang Prabang to Siem Reap and Phnom Penh, as well as offering travellers to one country more convenient options to subsequently visit the other.