SUMMARY

ARISE Plus Lao PDR (The ASEAN Regional Integration Support from the EU Plus – Lao PDR) aims at promoting inclusive economic growth, increased climate change resilience, mitigation of vulnerability and job creation in Lao PDR. The project is oriented towards the improvement of the overall business environment and the increased participation in global value chains for two selected sectors: processed wood and coffee. The four-year project is the national Lao PDR component of the ARISE Plus programme supporting regional economic integration under EU’s 2014-2020 Multiannual Indicative Programme for Asia. The project’s main partner is the Ministry of Industry and Commerce (MoIC) through its National Implementation Unit (NIU). Project beneficiaries include line Ministries such as Ministry of Agriculture and Forestry, Ministry of Science and Technology; and Trade and Investment Support Institutions, e.g. the Lao National Chamber of Commerce and Industry. A Project Coordination Office, located at MoIC, supports project implementation.

CONTEXT

 The Lao PDR joined the World Trade Organization (WTO) in 2013 and committed to regional integration in form of the ASEAN Economic Community (AEC) that entered into force in 2015 and the AEC Blueprint 2025. Resource-intensive exports, however, resulted in only limited gains for small and medium sized enterprises (SMEs). Existing opportunities from economic integration are not yet fully seized and compliance with sectoral market requirements,

such as the EU’s Forest Law Enforcement, Governance and Trade (FLEGT) that prevents EU-bound imports of illegally sourced wood-based products, remains inadequate. The economy also suffers from complex regulatory procedures and a narrow product range. Thus, an integrated effort is needed to diversify economic activity to ensure inclusive economic growth.

EXPECTED RESULTS

In line with Laos’ National Socio-Economic Development Plan (NSEDP) 2016-2020, the European Consensus on Development, the WTO Agreement on Trade Facilitation (TFA) and the AEC Blueprint 2025, the project aims at reaching three expected results (ER):

Increased regional integration (ER 1)

The project will help Lao PDR to identify and address the ASEAN Trade in Goods Agreement (ATIGA) commitments still to be implemented and priority obligations under the AEC Blueprint 2025. This will result in a better understanding of the challenges and benefits of the implementation of ATIGA. Having started mid-2019, the project is undertaking the following activities:

• Gap analysis of ATIGA implementation in Lao PDR: diagnostic of the measures and level of implementation and export potential assessment to prioritize sectors for ATIGA implementation
• Review of the gap analysis results with Government of Lao PDR and the private sector: design of a strategic roadmap
• Technical assistance and capacity-building: quality conformity assessment, specific consultations, tailored technical assistance, awareness-raising and set-up of a monitoring system in order to align with ATIGA.

Increased benefits from trade opportunities and market linkages with the EU (ER 2)

The project will strengthen awareness on preferential market access opportunities that exist under the ‘Everything But Arms’ (EBA) scheme in order to improve export performance to the EU and under regional schemes. It will also prepare for the country’s graduation from its current Least Developed Country (LDC) status. Planned activities:

• Review of export potential and existing trade with the EU and the regional market
• Awareness raising about Everything But Arms (EBA) preferences: capacity-building for officials and the private sector, publications on EBA and export potential, and information about graduation from LDC status
• Awareness raising on EU quality-related mandatory market requirements and voluntary industrial standards for the priority sectors
• Development of a pool of national quality champions
• Development of a practical online export curriculum to support private sector exports.

Improved participation in global value chains (ER 3)

The project will help Lao PDR address supply-side constraints, strengthen support services, enhance the investment climate, and support trade and investment promotion – with a focus on processed-wood products and coffee. Activities include:

• Participative development of sectoral export roadmaps: identification of supply-side constraints and remedial actions
• Review of quality and availability of statistical trade data: capacity-building to strengthen data collection and statistical production capacities
• Promotion of predictable legal timber supply: assessment of legal supply of timber, tailored capacity-building, assessment of markets for high quality timber products and niches
• Development of market linkages with regional and EU markets: organisation of study tours, trade fair preparation and participation
• National training and advisory support capacities in quality management
• Investment promotion in the targeted sectors
• Promotion of environmental and social standards: capacity building on key standards, assessment of climate risks for SMEs