Lao PDR Market Access Guide: Trading with ASEAN Dialogue Partners – Republic of Korea

Laos benefits from the comprehensive ASEAN-Korea Free Trade Agreement (AKFTA), which in large part has supported the fast growing exports of Laos to Korea. Since Laos became a member of ASEAN in 1997, its exports destined for Korea have increased 10-fold. That expansion is nearly twice as large as Lao exports to all destination and has contributed to Korea being one of its top 10 export destinations. How Lao Producers and Exporters Benefit from AKFTA - The AKFTA allows 90% of all products imported into Korea from Laos to enjoy duty-free treatment, and tariffs on the remaining 10% are being lowered to 0% to 10% by 2016. The Agreement also eliminates non-tariff barriers to trade like customs surcharges and import licensing; it facilitates trade in services, particularly communications and shipping between Korea and Laos; and it guarantees equal treatment on investments in Korea by Lao companies. - Without preferential market access, other foreign suppliers to Korea are subject to an average tariff of over 8%. This high level of protection gives Lao businesses a large competitive advantage over competitors who are not AKFTA members. - For agricultural products, Korea’s average tariff is 65% for non-AKFTA member countries. Lao businesses therefore have a huge competitive advantage in agricultural exports. - Korea is among the top countries having a highly conducive environment for doing business. Moreover, Korea’s logistics environment greatly facilitates trade. - Korea is one of the fastest growing markets in Asia. Two-way trade between Korea and ASEAN increased by nearly 30% in 2011, and is targeted to expand by another 20% by 2015. This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources.