1. Introduction
Laos has undertaken substantial trade reforms and liberalization in recent decades under the overall direction of the New Economic Mechanism (NEM). The process was initiated in mid-1980s when the country made efforts to transform the national economy from a centrally planned to a market-oriented one. Laos is making significant progress in moving forward its trade policy reforms and in pursuing a development strategy that recognizes openness to trade as the key engine for growth and poverty alleviation. To a large extent, Laos’ trade policy is now shaped by trade agreements, either at bilateral regional or multilateral fora. To date, Laos has also signed trade agreements with 18 countries, including: Vietnam; China; Cambodia; Burma; Thailand; North Korea; Philippines; Mongolia; Indonesia; Malaysia; Bulgaria; Russia; India; Belarus; Argentina; the United States; Kuwait and Turkey, the most recent and significant one is the bilateral agreement with the US by which Laos accords Normal Trade Relations (NTRs).
At the regional level, Laos is participating in the ASEAN Free Trade Area (AFTA) and undertaking commitments under the Common Effective Preferential Tariffs (CEPT) scheme. It is also engaging in free trade area (FTA) negotiations with ASEAN-dialogues partners: China, Republic of Korea, Japan, India, and Australia and New Zealand together as Closer Economic Relation (CER). Apart from that, Laos benefits from the Asia Pacific Trade Agreement (APTA) which was formerly known as the Bangkok Agreement. Despite joining APTA as early as 1975, Laos has not yet had the capacity to offer any concessions but has benefited from the Special and Preferential Treatment granted by the other five participating states (Bangladesh, China, India, Republic of Korea and Sri Lanka).
In the long term, Laos will be expected to commit to reduce and bind its Most Favored