Commercial cooperation of Laos with countries in the Great Mekong subregion

Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.Commercial cooperation of Laos with countries in the Great Mekong subregion.

INTRODUCTION

Rationale

Cooperation for development is increasingly recognized as essential in today's globalized world, as no nation can thrive in isolation Regardless of their economic status, countries must engage in exchanges to share knowledge and support one another This interconnectedness is vital for both less developed nations with limited foreign relations and developed countries that maintain extensive global ties Research consistently shows a positive correlation between trade agreements and economic growth, with Frankel & Romer (1999) offering strong econometric evidence of trade's beneficial effects on national income.

Rodrik (2018) argues that the advantages of trade liberalization are not distributed equally, potentially worsening income inequality A compelling aspect of the literature is the link between trade cooperation and peace; Oneil (2009) suggests that nations with strong trade relationships are less prone to conflict, a concept termed "capitalist peace." However, this notion is challenged by Barbieri (2002), who highlights instances where economic interdependence has resulted in conflicts Consequently, fostering cooperative economic and trade relations among countries and international organizations has emerged as a critical global concern and an inevitable trend.

The Greater Mekong Subregion Cooperation (GMS), established in 1992 by the Asian Development Bank, encompasses six Southeast Asian countries—Cambodia, China (Yunnan Province and Guangxi Zhuang Autonomous Region), Laos, Myanmar, Thailand, and Vietnam—sharing the Mekong River Home to approximately 326 million people as of 2020, this region is noted for its rich biodiversity, cultural diversity, and rapid economic growth The GMS features diverse geography, including mountains, fertile floodplains, forests, and numerous water bodies, with the Mekong River being vital for agriculture and the livelihoods of millions Despite its biological richness, which includes many endangered species, the region faces threats from habitat loss, overexploitation, pollution, and climate change.

The Greater Mekong Subregion (GMS) is characterized by its rich cultural and linguistic diversity, featuring hundreds of ethnic groups and languages that influence local traditions, festivals, cuisine, and art In recent decades, the GMS has experienced significant economic growth fueled by foreign investment, tourism, and infrastructure development, leading to increased economic and infrastructural interconnectivity through cross-border initiatives supported by the Asian Development Bank's GMS Program Key sectors driving this growth include agriculture, manufacturing, and services, positioning the region as a vital player in global supply chains However, economic disparities persist, particularly between more developed nations like China and Thailand and less developed countries such as Cambodia, Laos, and Myanmar The GMS also grapples with challenges including environmental degradation, climate change, uneven economic development, and social issues like human trafficking and migrant labor exploitation To combat these issues, regional cooperation, sustainable development programs, and policy reforms are being implemented.

Lao PDR, strategically located in the heart of the Greater Mekong Subregion (GMS), is endowed with abundant natural resources and a vast land area, yet it faces challenges with a relatively impoverished population Sharing borders with all GMS countries except Cambodia, Laos plays a pivotal role in regional connectivity, facilitated by major infrastructure projects like highways and railways that connect it to more developed nations such as Thailand and China The country is a key player in the regional economy, particularly in agriculture and hydropower, while its pristine natural landscapes and rich biodiversity position it as a promising destination for sustainable tourism Furthermore, Laos is integral to the GMS's economic corridors strategy, which seeks to bolster economic cooperation through enhanced transportation networks Despite these advantages, as of 2019, a significant portion of the population remains in poverty, with about 80% living on less than $2.50 a day, prompting the Lao government to implement various socio-economic development measures aimed at elevating the nation from its underdeveloped status.

In 2020, Laos aims to enhance trade promotion and investment by strengthening cooperation with GMS countries, focusing on trade liberalization and facilitating intra-regional economic activities Despite its potential, Laos grapples with challenges such as limited economic development, poverty, rural-urban disparities, and environmental conservation issues However, as a member of the GMS, Laos has opportunities for growth through regional collaboration, infrastructure development, and the sustainable management of its natural resources.

Evaluating trade cooperation among nations and its influence on economic growth highlights the significance of integrating into regional and international supply chains This concept remains relevant and valuable for both academic research and practical applications, particularly for researchers and policymakers in Laos.

Economic and trade cooperation between Laos and its neighboring countries is experiencing stable development, yet several complex challenges persist Differences in political, economic, and diplomatic policies hinder effective collaboration Thus, enhancing bilateral and multilateral trade in a mutually beneficial manner remains crucial for Laos and other nations in the Mekong sub-region This study, focusing on the period since the formation of the ASEAN community in 2015, aims to evaluate both the positive outcomes and existing challenges in trade relations Ultimately, it seeks to provide insights and solutions to strengthen commercial ties between Laos and its Mekong partners in the future.

Research objectives

This research aims to evaluate and find recommendations to enhance Laos's commercial cooperation with neighbouring countries in the Greater Mekong Subregion area.

There are three specific objectives to achieve the aforementioned general objective.

First, evaluate the current Laos trade relations with the Greater Mekong Sub- region countries.

Secondly, identify existing challenges and opportunities for expanding trade.

Thirdly, actionable recommendations should be developed in key economic sectors to strengthen cooperation and build trade relations between Laos and theMekong sub-countries.

Research scope

The thesis studies Laos' trade cooperation with the Greater Mekong sub-region countries from 2015 to 2022.

Laos has significantly enhanced its trade relations with Mekong sub-region countries, including Vietnam, Thailand, Cambodia, Myanmar, and China's Yunnan and Guangxi provinces This article explores both subjective and objective factors influencing economic, political, and social dynamics, proposing strategic solutions to further develop Laos's trade ties within the context of regionalization and globalization.

1.3.2 The research scope of the thesis

Laos' trade cooperation within the Mekong sub-region encompasses diverse and dynamic forms, yet this article emphasizes the critical area of goods trade, recognized as a key driver of the Lao economy The research delves into the significance and status of trade relationships, exploring themes such as the growth of import-export turnover, market dynamics, trade barriers, and the overall trade balance.

In terms of time: from 2015 - 2022

Regarding space: Laos with countries in the Mekong subregion, includingVietnam, Thailand, Myanmar, Cambodia and the two Chinese provinces of Yunnan and Guangxi.

Research Methodology

This study utilizes a mixed-methods research design, integrating both qualitative and quantitative approaches This methodology is selected to facilitate a thorough analysis of commercial cooperation between Laos and other GMS countries, merging statistical insights with detailed understanding.

Quantitative data will be sourced from multiple channels, such as trade statistics, economic reports, and databases of international organizations like the World Bank, Asian Development Bank, and United Nations Comtrade This data encompasses trade flows, foreign direct investment, infrastructural development, and various economic indicators.

Qualitative data will be gathered through semi-structured interviews and document analysis, focusing on key informants such as policymakers, business leaders, and trade experts from Laos and other GMS countries The document analysis will encompass various materials, including policy documents, trade agreements, and official reports.

All research activities will strictly follow ethical guidelines, ensuring that informed consent is obtained from all interview participants while maintaining their confidentiality Additionally, proper citation of all sources in the document analysis will be implemented to prevent plagiarism.

Scientific contributions

This research aims to deepen the theoretical understanding of regional commercial cooperation, economic integration, and sustainable development It seeks to propose innovative theoretical models or refine existing ones to elucidate the dynamics of commercial cooperation, particularly in developing, landlocked nations such as Laos within their regional context.

This research aims to enhance understanding of how institutional and policy frameworks at bilateral and regional levels influence trade and investment partnerships among developing countries, specifically through the lens of Laos' diplomatic and economic strategies By evaluating theories of small-state diplomacy and analyzing the impacts of Laos-GMS cooperation, the thesis seeks to refine existing frameworks that connect regional economic collaboration to development objectives Additionally, it will explore value chain and industrial clustering theories, examining linkages in priority sectors while addressing cooperation challenges and trust-building among diverse developing nations Ultimately, this study aspires to contribute to the discourse on regional integration and cooperation by providing empirical insights and perspectives relevant to developing countries.

This research offers valuable new data on Laos' commercial relationships within the Greater Mekong Subregion (GMS), shedding light on trade dynamics, foreign direct investment, and infrastructure development, thereby enhancing our understanding of economic integration in the region.

This thesis aims to make significant empirical contributions by providing new primary and secondary data on the commercial linkages between Laos and Greater Mekong Subregion partners over time, utilizing mixed methods for both qualitative and quantitative research It will measure the outcomes of cooperation policies and agreements through metrics such as trade volumes, investment projects, and job creation, while in-depth case studies will offer detailed insights beyond mere statistics By applying established concepts to the Lao context, the research will analyze cooperation trends across sectors to identify dominant and emerging industries Primary data will be collected through interviews and surveys with stakeholders, enhancing secondary sources, while statistical analyses of GDP, poverty, and competitiveness will explore the impacts of economic integration and development Additionally, an original database cataloging regional project characteristics may be compiled, providing unique sectoral or provincial cooperation profiles This research aims to uncover overlooked factors, opportunities, and limitations, offering valuable policy guidance and deepening the understanding of Laos' economic dynamics through novel empirical data and a contextualized case study approach.

Structure of the thesis

The thesis consists of 5 chapters as follows:

Chapter 2 Literature review on commercial cooperation between different countries

Chapter 4 Research findings commercial cooperation between Laos and the countries of the Greater Mekong subregion

Chapter 5 Recommendation for Laos to strengthen commercial cooperation with other countries in the Greater Mekong Subregion

LITERATURE REVIEW ON COMMERCIAL COOPERATION

Conceptualisation

2.1.1 Concepts of trade and international trade

Trade and commerce are fundamental economic categories that arise with the development of a commodity economy Broadly defined, commerce encompasses the profit-seeking business activities of individuals in the marketplace More specifically, it refers to the processes of buying, selling, and exchanging goods and services, as well as the distribution and circulation of these commodities.

Commerce has evolved from barter systems to the use of precious metals, money, and cheques as intermediaries between buyers and sellers Today, e-commerce plays a crucial role in facilitating trading and payment activities, particularly in developed nations like the United States and Japan, while traditional trade methods remain prevalent in developing countries.

International trade has evolved from its initial definition as the exchange of tangible goods between countries, which offered benefits not found in domestic trade In recent decades, the understanding of international trade has broadened to encompass not only the trade of physical products but also the buying, selling, and exchange of intangible goods and services, as well as investment activities aimed at generating profit.

International trade, as defined by the United Nations Commission on International Trade Law (UNCITRAL), encompasses a wide range of business activities in the global market This includes not only the buying and selling of tangible goods but also services such as insurance, finance, credit, technology transfer, information, transportation, and tourism.

According to Clause 1, Article 3 of the 2005 Vietnam Commercial Law, commercial activities are defined as profit-making endeavors, encompassing the purchase and sale of goods, provision of services, investment, trade promotion, and other profitable activities This broad definition extends to international trade, which involves commercial activities with foreign elements, including cross-border transactions, international service provision, global investment, trade promotion, and various other profit-driven activities.

International trade encompasses the buying and selling of goods and services, investment, trade promotion, and technology transfer between countries or territories It involves various activities aimed at profit generation, highlighting the interconnectedness of global economies.

International trade encompasses various approaches, traditionally categorized into two main flows: exports and imports However, in today's dynamic trade environment, new forms have emerged, including spot exports, temporary imports for re-export, and quick exports for re-import, as well as the growing significance of service trade As a result, this conventional classification of international trade is increasingly inadequate.

This thesis examines international trade through two main categories: goods and services Goods, defined as products of labor that fulfill specific human needs, can be further classified into tangible and intangible items.

International trade encompasses both tangible and intangible goods Tangible goods involve the exchange of physical items like machinery, agricultural products, food, raw materials, and natural resources In contrast, intangible goods include intellectual property such as inventions, utility solutions, industrial designs, copyrights, and trademarks.

Exporting involves sending domestically produced goods to foreign markets for consumption, while importing refers to bringing foreign-made goods into the country Local export activities can also be considered part of the broader export framework Additionally, regional exports, which may not cross national borders, hold similar economic importance, such as supplying goods to diplomatic representatives and international tourists.

International outsourcing involves delegating production tasks to foreign countries, with Vietnam currently utilizing this strategy for its textile and footwear industries Industrialized nations frequently engage developing countries to manufacture goods, compensating them with a processing fee for their services.

Regarding re-export and transhipment, goods are temporarily imported from foreign markets and then exported to a third country, provided such goods are not processed or processed.

In border-crossing activities, there is no act of buying and selling goods but performing services such as transit transportation and warehousing here.

International trade in services is becoming increasingly vital to the global economy Despite their growing significance, services are difficult to define due to their complex nature Notably, the General Agreement on Trade in Services (GATS) under the World Trade Organization (WTO) lacks a comprehensive definition of services, highlighting the challenges in categorizing this essential sector.

Services represent a crucial third economic sector encompassing all activities beyond agriculture and industry Defined as intangible benefits or activities exchanged without transferring ownership, services can exist independently of physical products.

Services are activities designed to generate intangible products that do not exist in physical form and do not involve the transfer of ownership rights, aimed at meeting production needs and enhancing daily life.

Commercial cooperation refers to diverse economic collaborations among businesses, industries, and countries While widely applied, its interpretation varies in academic literature Extensive research has focused on micro-level commercial cooperation, particularly between businesses, highlighting common forms such as strategic alliances, joint ventures, and partnerships.

Different perspectives of commercial cooperation

As a multifaceted concept, commercial cooperation has been widely examined across various levels, including countries (macro level) and companies (micro level).

Commercial cooperation at the country level is often seen through international trade agreements, economic unions, and regional development initiatives, grounded in theories like comparative advantage and the Heckscher-Ohlin model However, the evolving global economy has introduced new trade theories, such as those by Krugman, which emphasize economies of scale and network effects that large markets can provide Critics, including Rodrik, caution that such cooperation may increase inequalities, undermine national sovereignty, and cause social and environmental issues, highlighting the importance of balancing commercial cooperation with sustainable development and social equity.

Commercial cooperation at the country level is primarily driven by trade agreements, regional integration, and economic alliances Foundational theories like Ricardo's comparative advantage and the Heckscher-Ohlin model provide essential insights into this cooperation New trade theories, particularly Krugman's work on economies of scale, highlight how access to larger markets can lead to cost savings and industry growth However, scholars such as Rodrik caution that these benefits may exacerbate economic and social inequalities, creating disparities both between and within countries Additionally, the literature on regionalism suggests that while regional integration can foster peace and stability, as noted by Mansfield and Milner, it may also risk undermining multilateral trade systems, as warned by Bhagwati.

Commercial cooperation is essential for developing countries to drive economic growth, improve competitiveness, and tackle socioeconomic challenges This analysis highlights the significant advantages these nations can gain from collaborating with others, supported by theoretical frameworks and empirical evidence A key benefit of such cooperation lies in its ability to stimulate economic growth, as illustrated by the traditional theory of comparative advantage proposed by Ricardo in 1817 This theory posits that developing countries can enhance their economic output and income by focusing on goods and services with lower opportunity costs and engaging in international trade Additionally, the concept is reinforced by endogenous growth theory, which emphasizes the role of innovation and knowledge in economic development.

Knowledge and technology transfer play a crucial role in economic development, particularly for developing countries seeking to enhance productivity and innovation By engaging in commercial cooperation, these nations can gain access to advanced technologies and best practices from developed countries, which in turn improves their market access and competitiveness Krugman's new trade theory (1980) emphasizes that trade agreements can provide access to larger markets, enabling economies of scale that lower per-unit costs and further boost competitiveness.

Developing countries can enhance their economic resilience by diversifying their economies and reducing reliance on a few commodities Commercial cooperation not only brings economic advantages but also fosters socioeconomic development, aligning with the United Nations' Sustainable Development Goals (SDGs) that emphasize the importance of international trade in combating poverty and inequality By engaging in commercial partnerships, these nations can attract foreign direct investment (FDI), which generates jobs, boosts local entrepreneurship, and aids in infrastructure development However, it is crucial to approach these opportunities with caution, as Stiglitz (2002) warns that without proper regulations, free trade and FDI may worsen income inequality and lead to the exploitation of labor and natural resources in developing regions.

Rodrik (2011) highlights that the advantages of commercial cooperation are not guaranteed; they depend on effective domestic policies and institutions Similarly, Prebisch's dependency theory (1950) warns that such collaboration may create an unfavorable specialization pattern, fostering dependency on developed nations and hindering the long-term growth of developing countries While commercial cooperation can enhance economic growth, competitiveness, and socioeconomic development, it is essential for developing nations to negotiate fair agreements and implement robust domestic policies to maximize benefits and address potential challenges.

Developing countries pursue commercial cooperation with other nations for various reasons, including economic growth, diversification, and political influence The motivations for such cooperation are complex and multifaceted, impacting both the economies and political landscapes of these nations A key driver is the potential for economic development, supported by the theory of comparative advantage, which suggests that these countries can enhance their economic output and income by specializing in the production of goods and services where they hold a relative advantage.

Endogenous growth theory posits that commercial cooperation can enhance technology and knowledge transfer from developed to developing countries, boosting productivity and innovation (Romer, 1986) Additionally, such cooperation encourages economic diversification, helping developing nations reduce reliance on a limited number of commodities and mitigate risks associated with price volatility (Prebisch, 1950) Political motivations also play a role, as regional trade agreements can increase a country's political clout and promote stability, which is crucial for developing nations aiming to improve their geopolitical standing (Mansfield and Milner, 1999) However, these benefits warrant scrutiny, as the distribution of gains from commercial cooperation may be uneven, potentially worsening income inequality and exploitation without proper domestic policies (Stiglitz, 2002).

Commercial collaboration can lead to a dependency cycle on developed nations, potentially hindering the growth of domestic industries While such partnerships may enhance a country's geopolitical standing, they can also attract external influence that may conflict with national interests Developing countries pursue commercial cooperation for economic diversification and political leverage, yet these motivations carry intricate implications The advantages of such cooperation are not guaranteed or evenly shared, making it crucial for developing nations to critically evaluate both the potential benefits and challenges of engaging in commercial partnerships.

Commercial cooperation encompasses strategic alliances, joint ventures, and business collaborations, influenced by theories such as the resource-based view and transaction cost economics, which highlight the benefits of accessing valuable resources and minimizing transaction costs The knowledge-based view further underscores the importance of knowledge sharing and innovation, indicating that companies can achieve a competitive edge by leveraging collective expertise However, challenges such as knowledge leakage, conflicts of interest, and cultural differences must be managed effectively, emphasizing the need for trust-building in successful commercial partnerships.

Commercial cooperation at the company level often takes the form of strategic alliances, joint ventures, mergers, and acquisitions, driven by the resource-based view which emphasizes accessing valuable resources and capabilities Transaction cost economics highlights the importance of minimizing market transaction costs through trust, contracts, and governance mechanisms Additionally, the knowledge-based view and network perspective underscore the significance of knowledge sharing and relationship networks in fostering cooperation However, potential challenges such as opportunistic behavior, coordination difficulties, and knowledge leakage, as discussed by Das and Teng, indicate that managing these alliances requires careful planning and ongoing management to ensure success.

Multinational companies (MNCs) are crucial to their home economies, driving economic growth, enhancing competitiveness, and impacting policy-making Despite these contributions, they face criticism for issues such as tax evasion, inequality, and regulatory capture This review explores the significant role of MNCs in boosting their home countries' gross domestic product (GDP) by generating income, creating jobs, and stimulating economic activities (Rugman and Verbeke, 2004).

Investing in research and development (R&D) allows multinational corporations (MNCs) to drive innovation and foster long-term economic growth, enhancing the competitiveness of their home economies By operating at the cutting edge of technology and investing in human capital, MNCs can significantly boost productivity Their global presence provides valuable market insights and international business expertise, benefiting domestic firms and industries Additionally, MNCs play a critical role in policy-making, advocating for policies that encourage economic openness and innovation However, this influence can be contentious, as MNCs may also sway policies in their favor, risking regulatory capture.

While multinational corporations (MNCs) play a crucial role in home economies, their impact warrants careful scrutiny MNCs can exacerbate income and wealth inequality, as they often create high-paying jobs that require advanced skills, benefiting a limited segment of the workforce while primarily enriching shareholders Additionally, these corporations frequently engage in tax evasion by shifting profits to low-tax jurisdictions, which diminishes their tax contributions to their home countries Furthermore, MNCs may influence policy-making, leading to regulatory capture that prioritizes their interests over the public good Therefore, it is essential for policymakers to develop strategies that harness the advantages of MNCs while addressing the associated challenges.

Components of commercial cooperation among nations

Commercial cooperation among nations is a complex and multifaceted process.

The article discusses key elements such as trade agreements, foreign direct investment (FDI), technology transfer, and dispute resolution mechanisms, highlighting their role in promoting economic growth and development However, it also emphasizes the potential challenges and risks associated with these components.

Trade agreements are essential for fostering commercial cooperation by reducing or eliminating tariff and non-tariff barriers, which facilitates the exchange of goods and services between countries They often include provisions on intellectual property rights, labor standards, and environmental protection While such agreements can drive economic growth and enhance competitiveness, they may also result in trade diversion and negatively impact domestic industries Additionally, they can exacerbate regional disparities, benefiting more competitive areas while leading to job losses and economic decline in less competitive regions.

Trade agreements are essential for fostering economic cooperation between nations by establishing trade terms and reducing barriers They facilitate the exchange of goods and services, promoting economic growth by allowing countries to leverage comparative advantages and achieve economies of scale (Krugman, Obstfeld, and Melitz, 2015) However, these agreements can also have negative consequences, such as diverting trade from more efficient non-member countries to less efficient member countries (Bhagwati, 1991) and exacerbating regional disparities, benefiting competitive regions while disadvantaging others (Baldwin and Venables, 1995).

Trade agreements serve as vital tools for enhancing diplomatic relations and ensuring geopolitical stability According to Mansfield and Milner (2012), these agreements foster peace by creating interdependencies and encouraging cooperation among nations Additionally, they can advance specific political and social goals, such as human rights, labor standards, and environmental protection (Lechner, 2009) However, the political landscape can complicate these agreements, as noted by Dür, Baccini, and Elsig (2014), where powerful countries often exert disproportionate influence over the terms, resulting in asymmetric benefits.

Trade agreements can profoundly influence social dynamics, as highlighted by Rodrik (2018), who notes that while these agreements may boost national income, they can simultaneously exacerbate income inequality and result in job losses, especially in sectors vulnerable to international competition Furthermore, such agreements frequently encompass intellectual property rights provisions that may hinder access to essential medicines and knowledge.

2013) While these provisions can incentivize innovation, they can also raise prices and limit access, particularly in developing countries.

Trade agreements significantly enhance economic growth among member countries, as evidenced by NAFTA, which was implemented in 1994 between the United States, Canada, and Mexico According to the Congressional Research Service (2017), NAFTA increased trade from $297 billion in 1993 to over $1.3 trillion by 2017, fostering foreign direct investment and job creation through improved cross-border trade Additionally, the European Union exemplifies a successful trade agreement, encompassing 27 countries and demonstrating the economic benefits of such collaborations.

The establishment of a single market in the EU has facilitated the free movement of goods, services, capital, and people, significantly boosting intra-EU trade, which now represents over 60% of total trade for each member country According to the European Commission (2020), this trade dynamic is a key driver of economic growth and job creation throughout the region.

Established in 1992, AFTA was designed to boost economic growth among ASEAN member states by lowering intra-regional tariffs As reported by the ASEAN Secretariat in 2020, intra-ASEAN trade surged from $91.2 billion in 1993.

In 2018, ASEAN's economy reached an impressive $579.4 billion, establishing it as one of the most dynamic economic regions globally Additionally, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), involving 11 Pacific Rim nations, is anticipated to bring significant advantages, as highlighted in a study by Petri and Plummer.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), projected to be in effect by 2030, could boost the GDP of member countries by 0.5%-1.0% and generate an increase of $147 billion in global income However, while these trade agreements can lead to positive economic outcomes, they may also present challenges, with varying effects across different sectors and groups within a country.

Trade agreements are vital for international commercial cooperation, impacting economic, political, and social landscapes They can drive economic growth, enhance diplomatic relationships, and support social goals, but may also result in trade diversion, regional inequalities, income disparity, and limited access to essential goods To navigate these complexities effectively, policymakers must engage in a thorough literature review and develop a nuanced understanding of the implications of trade agreements.

Foreign Direct Investment (FDI) plays a vital role in economic globalization and commercial cooperation, allowing firms to access new markets, reduce costs, and navigate trade barriers For host countries, FDI can stimulate economic growth, create jobs, and facilitate technology transfer; however, it may also lead to the exploitation of labor and natural resources Additionally, FDI's benefits are not guaranteed, as local firms may struggle to absorb new technologies Furthermore, it can exacerbate income inequality by favoring skilled workers and distort domestic markets by crowding out local businesses.

Foreign Direct Investment (FDI) plays a crucial role in international economic transactions, significantly influencing the development of recipient countries It serves as a vital source of capital for developing nations, stimulating economic growth by providing essential financial resources (Alfaro et al., 2004) FDI is more impactful than domestic investment, as it brings a combination of technology, skills, and capital (Borensztein et al., 1998) Multinational enterprises (MNEs) facilitate the transfer of technology and knowledge, leading to productivity improvements and innovation in host countries (Blomström and Kokko, 1998) This "spillover" effect enhances the technological capabilities of local firms, increasing their competitiveness Additionally, FDI contributes to job creation and income generation, significantly reducing unemployment in developing countries, particularly in labor-intensive sectors (Farole and Winkler, 2014).

Moreover, FDI can contribute to skills development as local employees gain exposure to international business practices and advanced technologies (UNCTAD,

Foreign Direct Investment (FDI) plays a crucial role in enhancing infrastructure in developing countries, with foreign investors contributing to transport, energy, education, and healthcare facilities, thus fostering socio-economic growth However, despite its advantages, FDI poses challenges such as rising income inequality, environmental harm, and risks to national sovereignty.

Foreign Direct Investment (FDI) can significantly drive economic growth and development; however, it also poses potential drawbacks, particularly regarding income inequality Research by Figini and Gửrg (2011) indicates that the benefits of FDI often favor skilled workers and capital owners, leading to a widening wage gap as foreign firms tend to hire more skilled labor This preference can exacerbate income inequality within host countries Additionally, heavy reliance on foreign investments may increase vulnerability to economic shocks from the investors' home countries, potentially resulting in financial instability for the host nation (Gửrg et al.).

Theoretical frameworks of commercial cooperation among nations

Commercial cooperation among nations is a multifaceted subject explored by numerous scholars and economists Various theories elucidate the reasons behind international trade, highlighting the advantages of such collaboration and the regulatory policies nations may implement to govern trade practices.

Adam Smith's theory of Absolute Advantage suggests that a country should specialise in and export goods that it can produce more efficiently than other nations.

In exchange, it should import goods that different countries can have more efficiently (Smith, 1776).

Adam Smith's theory of Absolute Advantage, outlined in "The Wealth of Nations" (1776), is a cornerstone of classical economics that emphasizes the importance of specialization in international trade According to Smith, nations should focus on producing goods they can manufacture more efficiently than others, which enhances overall productivity and efficiency By identifying their strengths, countries can specialize in certain goods or services, allowing them to export their high-efficiency products while importing those they produce less effectively This approach fosters commercial cooperation among nations and optimizes resource allocation in the global market.

Countries can enhance resource utilization by specializing in goods where they hold an absolute advantage and engaging in trade, resulting in improved global efficiency and increased wealth creation This specialization fosters economic interdependence, promoting peaceful relations and cooperation as nations benefit from each other's prosperity Smith's theory underpins free trade policies and agreements aimed at eliminating trade barriers, allowing countries to fully leverage their absolute advantages and countering protectionist arguments.

Smith's theory boosts global economic efficiency by advocating for specialization based on absolute advantage By concentrating on the production of goods that each country can produce most efficiently, resources are utilized to their fullest potential, resulting in increased global output This approach allows for a greater quantity of goods and services to be produced and consumed worldwide compared to a scenario where countries attempt to produce a wider variety of goods inefficiently Furthermore, the theory promotes international trade, strengthening economic ties and fostering improved diplomatic relations Such interconnectedness enhances cooperation on various global issues, including environmental policies and security, making countries with robust trade partnerships more likely to collaborate and less prone to conflicts.

Smith's theory indirectly stimulates nations to develop competitive advantages.

Focusing on industries with an absolute advantage allows countries to enhance efficiency and output through investments in research and development, infrastructure, and skills training, fostering innovation and new technologies The principles of absolute advantage are foundational to numerous international trade policies and agreements, including those promoted by the World Trade Organisation, which seek to lower trade barriers like tariffs and quotas This approach facilitates a more integrated global economy, enabling the free movement of goods, services, and labor across borders.

While Adam Smith's theory of Absolute Advantage is foundational in economics, it has limitations, particularly its assumption that trade is a zero-sum game David Ricardo's theory of Comparative Advantage refuted this notion, demonstrating that countries can benefit mutually from trade, even if one is more efficient in all goods Additionally, modern trade theories, including New Trade Theory, introduce complexities such as economies of scale, product differentiation, and technological innovation, indicating that trade is influenced not only by production efficiency but also by consumer preferences and first-mover advantages in certain industries.

The theory of Absolute Advantage is essential for grasping the principles of international trade and economic collaboration, serving as a foundational rationale for trade and emphasizing the advantages of economic interdependence.

David Ricardo built upon Adam Smith's economic theories by introducing the principle of Comparative Advantage He posited that countries should focus on producing goods for which they face a lower opportunity cost, regardless of whether they hold an absolute advantage in those goods This specialization, coupled with trade, has the potential to enhance overall efficiency and increase wealth for all participating nations.

David Ricardo's theory of Comparative Advantage, introduced in his work

"Principles of Political Economy and Taxation" (1817) is a key text in international trade economics, building on Adam Smith's theory of Absolute Advantage It emphasizes that countries should focus on specializing in the production and export of goods in which they possess a relative efficiency, rather than an absolute one.

Ricardo's theory of Comparative Advantage posits that even without being the most efficient producer, countries can still gain from trade by focusing on goods with the lowest opportunity costs This principle encourages broader trade, allowing all nations to benefit, regardless of their absolute production capabilities By specializing based on comparative advantages, countries can achieve a more efficient global resource allocation, boosting worldwide output and consumption possibilities This fosters economic interdependence, leading to enhanced cooperation across diplomatic and political spheres Additionally, Ricardo's theory supports free trade and serves as a foundation for trade policies aimed at reducing barriers, enabling countries to maximize their comparative advantages effectively.

Ricardo's theory of Comparative Advantage, while foundational in international trade, has notable limitations, such as assuming perfect mobility of production factors within a country but immobility between countries, and oversimplifying global trade by considering only two countries and two goods Modern trade theories, like the Heckscher-Ohlin theory, enhance this concept by attributing a country's comparative advantage to its factor endowments, suggesting that nations export goods that utilize their abundant resources and import those that require scarce ones Additionally, recent theories incorporate elements such as economies of scale and differentiated products, with Paul Krugman's research highlighting how countries can achieve comparative advantages through these factors Despite its critiques and adaptations, Ricardo's theory remains essential for understanding international trade dynamics, advocating for trade as a means to enhance economic efficiency and foster mutual benefits among nations.

The Heckscher-Ohlin (H-O) Theory, developed by Eli Heckscher and Bertil Ohlin, enhances the idea of comparative advantage by linking it to a nation's factor endowments This theory posits that countries will export goods that make extensive use of their abundant and inexpensive production factors, while importing goods that require their scarce and costly factors of production.

The H-O Theory promotes international trade by emphasizing differences in factor endowments like land, labor, and capital Countries rich in specific factors will focus on producing and exporting goods that utilize those resources, while importing goods that require factors they lack This specialization leads to a more efficient allocation of resources, ultimately increasing global output and consumption, which enhances overall welfare The theory highlights how trade allows nations to overcome their limitations in factor endowments, enabling them to enjoy a diverse range of goods Additionally, as countries engage in trade based on their unique factor endowments, they foster economic interdependence, which can lead to greater commercial, diplomatic, and political cooperation.

The H-O Theory underpins trade policies that aim to minimize trade barriers, promoting free trade and enabling countries to maximize their factor endowments This theory is frequently cited in opposition to protectionist measures, which can hinder nations from achieving their full potential based on their available resources.

The H-O Theory, while influential, has notable limitations, including its assumptions of perfect competition and factor mobility, as well as its neglect of economies of scale and technological disparities It simplifies production to just two factors, labor and capital, overlooking the complexities involved Extensions like the Stolper-Samuelson theorem enhance the theory by analyzing trade's impact on factor prices, indicating that trade can increase returns for abundant factors while decreasing them for scarce ones Recent trade theories further expand on this by incorporating technological differences, economies of scale, and imperfect competition, suggesting that a country's comparative advantage and trade patterns are influenced by factors beyond mere factor endowments, such as technological capabilities and market dynamics.

Relevant studies on commercial cooperation between Laos and other countries

Laos, a landlocked country in the CLMV group of ASEAN, faces economic challenges due to its geographical location However, it boasts favorable natural conditions that have made it a popular tourist destination within the region Since opening its borders, Laos has increasingly attracted visitors seeking unique experiences in its stunning landscapes and rich cultural heritage.

In 1986, Laos shifted its foreign policy to enhance economic and trade cooperation, particularly with neighboring countries As a newly opened nation, Laos has attracted significant scholarly interest, especially regarding its multilateral and bilateral trade partnerships This article will review key studies focused on Laos's trade cooperation initiatives.

2.5.1 Studies on trade cooperation of Laos with countries in the Mekong sub-region

Bounlert Vanhnalat et al (2015) analysed the impact of free trade agreements (FTAs) between Lao PDR and 32 trading partners The model was applied in the 1996-

In 2011, findings indicated that the preferential use of trade benefits was low and primarily concentrated on natural resource products, largely due to exporters facing challenges in meeting local content requirements, limited awareness of preferential options, and a lack of export diversification and product quality The analysis revealed that the reduction of import duties, as per World Trade Organization commitments, significantly boosted trade creation, particularly with certain Free Trade Agreements (FTAs) in place Notably, Lao exports benefiting from preferential treatment and Generalized System of Preferences (GSP) are projected to experience an average trade volume increase of over 50% compared to those without FTAs and GSPs.

The OECD Investment Policy Reviews: Lao PDR (2017) highlights the gradual integration of the Lao People's Democratic Republic into the global economy, focusing on trends in foreign investment and trade This comprehensive report analyzes the evolving landscape of foreign direct investment in Lao PDR, emphasizing the country's efforts to enhance its investment climate and attract international partners By examining key developments and policy frameworks, the report provides valuable insights into the challenges and opportunities facing Lao PDR in fostering sustainable economic growth through foreign investment and trade.

The People's Democratic Republic (Lao PDR) is increasingly integrating into the global economy, with trade and investment playing a crucial role in its economic development This report analyzes trends in foreign direct investment (FDI) in Lao PDR, utilizing diverse national and international data sources Additionally, it evaluates the performance of foreign investment in comparison to neighboring and regional economies, highlighting its significant impact on the local economy.

The report titled "Strategic Study on Laos Pilot Program for Narrowing the Development Gap Toward ASEAN Integration" provides a comprehensive overview of socio-economic changes in Laos from 1976 to 2005, highlighting economic growth and cooperation with neighboring countries, particularly in trade with Thailand and Vietnam It outlines Laos's recent economic development plans, including the national socio-economic development plan for 2006-2010 and the orientation for 2011-2015 The study also examines trade and investment strategies with neighboring countries such as Thailand, Cambodia, Myanmar, and Vietnam, and emphasizes the importance of cooperation between Lao PDR and ASEAN, along with partnerships with regional organizations like the Mekong River Commission and the Greater Mekong Subregion Program.

The 2005 research conducted by the Development Analysis Network, funded by the Rockefeller Foundation, delves into the cross-border economies of Cambodia, Laos, Thailand, and Vietnam This study begins with a comprehensive overview of cross-border trade, examining policies and trade structures among these nations Chapter 3 focuses on Laos, highlighting case studies in Dansavanh, Savannakhet, and Houaysai/Tonpheung, addressing everyday challenges and the broader context of Laos's border economy, including regional integration and trade policies Chapter 4 shifts to Thailand, analyzing its border economy and trade dynamics with Laos, particularly in Sakeao and Chiangrai provinces Chapter 5 explores Vietnam's border economy, detailing trade through the Lao Bao border gate, where key exports from Vietnam include machinery, consumer goods, and seafood, while major imports from Laos consist of agricultural products and household items.

The Cambodia-Laos-Myanmar-Vietnam Economic Cooperation Action Plan for 2021-2022 has been approved, focusing on five key areas: trade and investment cooperation, regional commitments, post-epidemic recovery, the development framework for CLMV, and human resource development The ongoing challenges posed by the pandemic hinder these countries' efforts in epidemic prevention and economic recovery, impacting the progress of various projects under the 2020 CLMV Action Plan To address these issues, CLMV nations must enhance coordination on policies and measures to mitigate COVID-19's effects, support business connectivity in innovative ways, and facilitate the removal of obstacles affecting import, export, and border trade activities.

The World Trade Organisation's Trade Policy Review report on the Lao People's Democratic Republic, published on October 14, 2019, evaluates various aspects of Laos' trade policy, including its economic environment, key economic characteristics, recent developments, and trade and investment growth It highlights the country's significant hydropower potential, which has become a crucial revenue source through electricity exports, with production rising by 103.4% from 2013 to 2017, primarily driven by independent power producers However, the report also notes that e-commerce in Laos is underdeveloped due to challenges such as limited Internet connectivity, high payment costs, and inadequate infrastructure, which hinder trade facilitation and logistics.

A study led by Dr Prabir De, part of the Second Trade Development Facility Project, investigates the non-tariff measures (NTMs) impacting Lao PDR's export sector Conducted by Enterprise & Development Consultants Co., Ltd (EDC) with support from Lao NGOs, the research provides a comparative analysis of NTMs affecting eight key Lao products By interviewing approximately 60 exporters and engaging in workshops with stakeholders in Vientiane, the study identifies regulatory barriers and border costs hindering Lao PDR's trade integration The analysis focuses on agricultural exports, including corn, cassava, rice, rubber, dried cassava, bananas, coffee, and wood products, primarily targeting markets in Vietnam, China, Malaysia, Thailand, and the EU.

2.5.2 Studies on trade cooperation between Laos and countries in the Mekong sub-region

- Trade cooperation between Laos - Vietnam

Research on the Vietnam-Laos trade relationship and its international and regional context highlights several significant studies from abroad, including those focused on Southeast Asian development, political and security dynamics, and regional challenges These studies examine the broader political economy of the region and its impact on the evolving economic ties between Vietnam and Laos in recent years.

In the book "Some Political-Economic Issues and Trends in Lao PDR in the First Two Decades of the Twentieth Century," edited by Dr Truong Duy Hoa and published by the Social Science Publishing House in 2012, the author offers a comprehensive analysis of key issues facing Laos The work highlights significant challenges the country has addressed and presents solutions aimed at enhancing the Lao economy both now and in the future Through the lens of an economic expert, the author paints a broad picture of Laos's political economy and outlines various scenarios for the integration of the Lao economy into regional and global markets.

The book "Vietnam-Laos-Cambodia Friendly Cooperation and Development," edited by Nguyen Duy Dung and published by the Information and Communication Publishing House in 2012, explores the practical foundations for the development triangle of Vietnam, Laos, and Cambodia It examines the current state of development and underscores the strategic importance of this triangle, emphasizing that enhancing cooperative relations, particularly in the economic sector, serves as a catalyst for collaboration among the three nations Furthermore, the Vietnam-Laos-Cambodia development triangle significantly contributes to regional trade cooperation, fostering economic growth and integration within the region.

The trade cooperation between Vietnam and Laos is crucial, serving not only national interests but also benefiting the broader region This partnership highlights the significance of economic collaboration in fostering mutual growth and stability.

- Trade cooperation between Laos and Thailand

Choen Krainara (2009) examined Thailand's international trade policy, focusing on its foreign economic strategies and mechanisms to enhance trade with neighboring countries, particularly through initiatives like the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) Regular discussions between Thailand and Laos aim to address cross-border trade challenges, with government support for the Thai private sector to mitigate business risks in Laos Thailand is encouraged to seek international funding for infrastructure development in Laos and to promote cross-border trade by strengthening public-private partnerships and local agencies Establishing border-gate economic zones and reducing non-tariff barriers are essential for trade growth, while ongoing financial support from Thailand and third-party donors will facilitate necessary infrastructure improvements Additionally, Thailand should maintain trade privileges and enhance market access for Lao agricultural products.

Research gaps

The review of relevant contexts and theories highlights several research gaps regarding Special Economic Zones (SEZs) in Laos, which are crucial for attracting foreign investment and industrializing exports There is a pressing need for more robust impact assessments to evaluate their effectiveness in fostering inclusive growth through job creation and technology transfers Despite being central to Laos' industrialization strategy for decades, comprehensive evaluations of SEZs remain limited, particularly in the context of regional cooperation within the Greater Mekong Subregion Focusing on quantifying the contributions of SEZs to employment, skills transfers, and poverty reduction could address these gaps Additionally, examining successful strategies from other regions to integrate SEZs into local value chains may provide valuable insights By analyzing Laos' industrial platform through both qualitative and quantitative lenses, researchers can uncover lessons that optimize the benefits of SEZs for social upgrading and regional competitiveness, ultimately supporting inclusive growth within broader Mekong cooperation frameworks.

This research addresses the gap in assessing trade promotion activities by countries and development partners, focusing on enhancing Laos' commercial cooperation within the Greater Mekong Subregion While macroeconomic trade linkages have been widely studied, the effectiveness of initiatives supporting Lao businesses in foreign markets has not received sufficient scholarly attention A comprehensive evaluation of trade support programs by governments and international organizations is essential to quantify their impact on various sectors Additionally, understanding the complementary services needed by Lao traders to navigate foreign market challenges is crucial Highlighting successful case studies of initiatives that foster buyer-seller connections can provide valuable best practices As digitalization reshapes trade promotion, exploring its online adaptations is important for policy development Moreover, the coordination of multiple stakeholders through strategic planning is an underexplored area that could enhance collaboration and outreach to traders Qualitative interviews and quantitative surveys can help optimize these efforts, ultimately empowering Lao businesses to seize new commercial opportunities in the Mekong subregion Thus, a focused assessment of trade promotion activities is a critical research priority that offers significant insights for regional economic integration.

RESEARCH METHODOLOGY

Research Design

To evaluate Laos' current commercial cooperation with GMS countries and provide recommendations, an exploratory mixed methods research design is ideal This approach combines quantitative and qualitative data collection and analysis, offering a comprehensive understanding of the research problem (Creswell, 2014) The quantitative aspect involves analyzing official trade statistics through desktop research to objectively assess Laos' trade volumes and agreements over time Meanwhile, qualitative data gathered from stakeholder interviews offers essential contextual insights into the perceived challenges and opportunities Given the exploratory nature of this study, a descriptive design is more suitable than an experimental one, focusing on understanding the phenomenon rather than testing hypotheses An explanatory study could later evaluate the impact of any implemented recommendations.

An embedded mixed methods design effectively integrates quantitative trade data as the primary database to evaluate Laos' commercial cooperation, while qualitative interviews provide supplementary insights for interpreting trends and generating recommendations This approach triangulates diverse sources of evidence, addressing both confirmatory and exploratory aspects to achieve a holistic understanding aligned with assessment and development objectives By adhering to established mixed methods frameworks and international reporting standards, the research ensures rigor, validity, and generalizability, thus enhancing its impact on academic and policy spheres The study focuses on Laos within the GMS, employing qualitative methods such as literature review, policy analysis, and semi-structured interviews to explore the multifaceted economic, political, historical, and geographical dimensions of commercial relationships The literature review situates the research within the broader academic discourse, while policy analysis reveals the formal structures of cooperation, and semi-structured interviews uncover lived experiences and perspectives that enrich the understanding beyond existing literature and policy documents.

Quantitative methods offer an objective analysis of Laos' trade relations with GMS countries by examining trade data, economic indicators, and infrastructure development This approach helps identify trends and patterns while testing hypotheses, ensuring the reliability of findings through robust statistical methods Consequently, valid inferences can be made about the overall economic landscape.

The mixed-methods research design offers a robust and comprehensive approach to analyzing Laos' commercial cooperation with GMS countries, integrating both qualitative and quantitative methods This combination enhances the study's ability to capture the complexity of the research problem, resulting in rich, nuanced, and reliable findings.

The qualitative methodology seeks to gain a profound insight into the dynamics, processes, and contexts surrounding Laos' commercial collaboration with GMS countries, employing a thorough literature review, policy analysis, and semi-structured interviews.

The literature review is a crucial component of qualitative methodology, offering both theoretical and empirical context for the study It entails a systematic examination of scholarly articles, books, reports, and other pertinent materials to grasp the historical and current landscape of Laos' commercial cooperation with the GMS (Booth et al., 2016) This review not only reveals existing knowledge and identifies literature gaps but also positions the current research within the wider academic dialogue (Hart, 2018) Furthermore, it aids in refining research questions and shaping the methodology.

Policy analysis is a vital aspect of qualitative methodology that scrutinizes trade policies, agreements, and regulations affecting Laos' commercial interactions within the Greater Mekong Subregion (GMS) This systematic approach to evaluating public policies begins with a descriptive analysis of existing policies, detailing their design and development, including stakeholder involvement and policy options considered (Bardach and Patashnik, 2020) Through this analysis, insights are gained into the formal rules governing Laos' commercial cooperation with other GMS nations, revealing legal and regulatory challenges and opportunities that influence these partnerships Additionally, it sheds light on policy trends and shifts, providing a clearer understanding of their implications for commercial relationships between Laos and other GMS countries.

This research will systematically evaluate Laos' commercial cooperation policies with neighboring Greater Mekong Subregion (GMS) countries through policy analysis Initially, a descriptive analysis will outline Laos's trade and investment policies with GMS nations, including Thailand, Vietnam, Cambodia, and Myanmar, detailing their development, key stakeholders, and options considered Following this, a process evaluation will assess the implementation of these policies, focusing on stakeholder engagement, resource allocation, and any policy changes over time An interpretive analysis will delve into the rationales and perceptions that influenced policy formation, reflecting Laos's assumptions and priorities regarding subregional cooperation The study will also examine the outcomes of these policies on bilateral trade flows, investment projects, and economic integration, evaluating both intended and unintended consequences on GDP and socioeconomic development Key lessons learned from the successes and limitations of policy development and deployment will be identified, along with best practices that influenced goal achievement Finally, evidence-based recommendations will be proposed for potential reforms and future cooperation opportunities between Laos and GMS partners, aiming to enhance collaboration to benefit Laos' commercial interests and development objectives.

Semi-structured interviews serve as an essential qualitative research method, enabling a deep exploration of individual perspectives and experiences (Brinkmann, 2018) This approach is particularly advantageous for examining Laos' commercial cooperation within the Greater Mekong Subregion (GMS), as it facilitates the collection of rich, detailed insights from key informants such as policymakers, business leaders, and trade experts By allowing participants to articulate their views in their own words, these interviews uncover the complexities and nuances of the factors influencing commercial cooperation, including challenges and opportunities that quantitative data may overlook Ultimately, this method provides a comprehensive understanding of the dynamics at play, highlighting potential areas for improvement in Laos' commercial partnerships.

The interview process will feature open-ended questions that encourage exploration of unexpected themes, with a structured guide to ensure key areas are addressed This guide will allow for flexibility in the order and depth of questions, adapting to the interviewee's responses (Brinkmann, 2018) Conducted respectfully and without judgment, all interviews will prioritize confidentiality, with recordings made only with the interviewee's consent, followed by transcription for thorough analysis.

Key stakeholders to be interviewed include officials from Laos' trade and investment promotion agencies, policymakers involved in cooperation frameworks, and representatives from partner countries Interviews will be conducted in person or via online video calls, guided by a semi-structured format with pre-defined open-ended questions The focus will be on the rationale for cooperation, experiences in implementing agreements, specific project case studies, and insights into opportunities and challenges Each interview is expected to last 30-60 minutes and will be audio-recorded with participant consent for accurate analysis Recordings and notes will be securely stored, ensuring participant anonymity through the use of unique identifiers instead of names.

Thematic analysis of interview data will uncover commonalities, variations, and overlooked factors among stakeholder perspectives Insights from these interviews will be cross-referenced with documentation and observational data This semi-structured interview approach is essential for capturing in-depth insider accounts, enriching the research with nuanced understanding The goal is to transcend superficial descriptions and achieve an authentic grasp of the evolution of cooperation policy, as experienced by key actors involved in Laos-GMS engagement and collaboration over time.

The interview data will be analyzed through thematic analysis, a widely accepted method for qualitative data analysis that focuses on identifying and reporting patterns or themes within the data (Braun & Clarke, 2006) This approach enables a structured organization and comprehensive description of the dataset, facilitating the interpretation of different facets of the research topic (Braun & Clarke, 2006) Thematic analysis involves a series of systematic steps to ensure thorough examination and understanding of the data (Braun & Clarke, 2006).

- Familiarizing with the data: This includes transcribing the interviews, reading and re-reading the data, and noting initial ideas.

- Generating initial codes: This involves systematically coding exciting features of the data across the entire data set and collating data relevant to each code.

- Searching for themes: This step includes collating codes into potential themes and gathering all data relevant to each potential theme.

- Reviewing themes involves checking the themes against the coded extracts and the entire data set, generating a thematic 'map' of the analysis.

- Defining and naming themes: This step involves refining the specifics of each theme and generating clear definitions and names for each theme.

The final step in report production entails choosing vivid and compelling extract examples, conducting a thorough analysis of these extracts, connecting the findings to the research question and relevant literature, and ultimately crafting a scholarly report that presents the analysis comprehensively.

This thesis on commercial cooperation between Laos and its neighbors in the Greater Mekong Subregion will utilize desktop research as a foundational methodology, enabling a swift understanding of historical cooperation frameworks Key secondary sources include official trade agreements, investment treaties, and connectivity plans from the Lao government and its partners, as well as reports from regional organizations like ASEAN and GMS Academic studies and analyses from multilateral banks will further contextualize Laos' engagement rationale with GMS partners This research will identify key economic trends and relationship challenges, helping to define the research problem and formulate hypotheses Insights gained will inform a primary data collection strategy, highlighting national stakeholders for interviews and potential case studies Overall, desktop research will establish a comprehensive awareness of regional cooperation dynamics, guiding primary research on Laos' commercial partnerships in the GMS.

Data Sources and Collection methods

This study will gather data from two main sources: primary and secondary Utilizing both types of data is essential for gaining a detailed and comprehensive insight into Laos' commercial cooperation with other countries in the Greater Mekong Subregion (GMS).

Primary data refers to original data collected directly by the researcher for the specific purpose of the research project (Bryman, 2016).

Semi-structured interviews with key informants, including policymakers, business leaders, and trade experts from Laos and other GMS countries, will play a crucial role in primary data collection These interviews aim to obtain firsthand, up-to-date, and context-specific insights into Laos' commercial cooperation with GMS countries A purposive sampling strategy will guide the selection of interviewees based on their relevant knowledge and experience The interviews may be conducted face-to-face, by phone, or through digital platforms, depending on the accessibility and preferences of the participants.

Secondary data consists of information previously gathered by others that is accessible for further research Utilizing secondary data can improve research efficiency, reduce costs, and offer a broader context over time compared to primary data collection methods.

Academic literature, including journal articles, books, dissertations, and conference papers, provides essential secondary data for research by offering theoretical context, previous findings, and relevant debates This body of work encompasses peer-reviewed sources and published materials that present analyses, theories, and interpretations from experts in the field It includes both conceptual frameworks and empirical studies that utilize primary data collection methods Utilizing reputable, well-cited publications ensures access to insightful data, while the currency of literature is crucial, as some topics evolve rapidly Literature reviews synthesize existing research to establish context and identify gaps, and databases like Google Scholar, Web of Science, and Proquest facilitate efficient literature searches Accessing full texts may require specific databases or libraries, and referencing software aids in organizing literature throughout the research process Critiques of literature can highlight theoretical comparisons and inconsistencies in evidence Overall, published academic works are invaluable for informing research questions, identifying variables, and selecting appropriate methodologies.

Government agencies and international organizations such as the World Bank, United Nations, and Asian Development Bank offer valuable secondary data through their comprehensive reports These documents include essential statistics, assessments, and projections that enhance primary data analysis Covering a range of topics from economic indicators to policy evaluations, these reports are produced by public institutions and multilateral organizations, ensuring their authority due to the expertise and resources involved They provide up-to-date statistical snapshots, often tracking annual progress, and draw from national census data, industry reports, and project assessments Systematic databases maintained by institutions like the World Bank, IMF, and OECD further facilitate access to these reports, making them reliable resources for contextual analysis, trend measurement, and policy-related research.

Quantitative secondary data, particularly trade data, will play a crucial role in this research, encompassing export and import statistics, trade balances, and the categories of goods and services exchanged between Laos and GMS countries This information will be obtained from reputable international trade databases, including the UN Comtrade database, the World Bank’s World Development Indicators, and reports from national trade and finance ministries.

Trade data serves as a crucial secondary source for researching commercial cooperation between Laos and its neighbors in the Greater Mekong Subregion International trade databases from organizations such as the World Bank, IMF, WTO, UN Comtrade, and ASEAN offer detailed bilateral and multilateral trade statistics that highlight export and import volumes and values by country and commodity over time Utilizing these comprehensive trade databases through desktop research establishes a baseline for understanding economic engagement between Laos and other GMS nations This data enables the analysis of trading trends, identifying strengths and weaknesses in cooperation across various sectors Furthermore, it supports qualitative assessments of cooperation outcomes and their impacts on Laos' development By grounding research in concrete metrics, trade data aids in evaluating Laos' commercial partnerships and guiding primary data collection As a systematic source compiled by reputable institutions, trade databases provide reliable contextual intelligence for analyzing regional collaboration.

Economic indicators such as GDP, inflation rate, and trade as a percentage of GDP will be sourced from reputable secondary sources, including the World Bank, International Monetary Fund (IMF), and national statistical offices These metrics are essential for analyzing the overall economic landscape of the countries in question.

Economic indicators are crucial secondary data for researching commercial cooperation between Laos and the Greater Mekong Subregion, with reliable information sourced from organizations like the World Bank, IMF, ADB, and ASEAN Analyzing this data enables insights into economic growth trends, GDP contributions, inflation rates, and poverty levels over time, establishing a broader context for cooperation Empirical evidence derived from these indicators allows for a qualitative assessment of the impacts of trade and investment partnerships, including correlations between GDP, export figures, and regional integration, as well as tracking poverty reduction linked to employment in cooperative sectors The authoritative nature of this economic data provides reliable metrics to statistically support analyses of how collaborations between Laos and GMS partners contribute to shared objectives such as inclusive growth, industrialization, and overall prosperity.

The analysis of policy documents, including trade agreements and regulations, is essential for understanding the formal rules that shape trade relationships, particularly between Laos and the Greater Mekong Subregion These documents, sourced from governmental and intergovernmental websites, provide valuable secondary data, highlighting national development plans, foreign trade strategies, and bilateral agreements that guide collaboration Desktop research of these policies reveals the objectives, priorities, and incentive structures that inform cooperative initiatives, such as Vietnam's socio-economic policies and Thailand's regional engagement plans Additionally, Laos' economic zone policies identify targeted partners and sectors, while regional cooperation frameworks like the GMS Program contextualize relationships with neighboring countries By examining these official documents, researchers can gain insights into the strategic rationales behind state actors' efforts to promote economic integration, as well as the opportunities and challenges presented by agreed cooperation policies.

In summary, this research will utilize a combination of primary and secondary data sources to gain a thorough understanding of Laos' commercial cooperation with GMS countries Employing diverse data sources facilitates data triangulation, which strengthens the validity and reliability of the research outcomes (Flick, 2018).

Data analysis

Data analysis plays a vital role in research, converting raw data into valuable insights This study employs a mixed-methods approach, integrating both qualitative and quantitative data for comprehensive analysis.

Qualitative data analysis, often inductive, focuses on interpreting and making sense of textual data to identify patterns, themes, and categories (Braun & Clarke,

In this study, thematic analysis will be employed to examine qualitative data gathered from a comprehensive literature review, policy analysis, and semi-structured interviews This method is recognized as a prevalent approach for analyzing qualitative information.

Thematic analysis is a flexible method for identifying and reporting themes within qualitative data, providing a comprehensive understanding of complex information (Braun & Clarke, 2006) This study will utilize the six-step process outlined by Braun and Clarke, which includes familiarization with the data, generating initial codes, searching for themes, reviewing and defining themes, and ultimately producing the report.

Quantitative data analysis utilizes statistical methods to produce numerical results, offering a deductive and objective approach that facilitates generalizable conclusions (Muijs, 2010) This study will encompass various quantitative data sources, including trade data, economic indicators, and potentially survey data, all of which will undergo descriptive and inferential statistical analysis.

Descriptive statistics provide a fundamental summary of data, highlighting its key characteristics This includes calculating measures of central tendency—mean, median, and mode—as well as measures of variability such as range, variance, and standard deviation, to establish an initial understanding of the dataset.

Descriptive statistics offer a clear summary of data through central tendency measures, dispersion metrics, and visual representations, serving as the essential groundwork for nearly all quantitative analyses (Gravetter and Wallnau, 2016).

The measures of central tendency—mean, median, and mode—are essential for identifying the central position within a dataset This research applies these measures to analyze the typical trade volume and value between Laos and GMS countries The mean will provide an average figure, reflecting the overall trade level, while the median will reveal the central tendency, particularly useful when data is skewed Additionally, the mode will highlight the most frequently occurring trade value or volume, offering insights into common trading patterns between Laos and other GMS nations.

Measures of dispersion, such as range, variance, and standard deviation, are essential for understanding the variability of trade volume and value between Laos and GMS countries The range highlights the difference between the highest and lowest trade values, with a larger range indicating significant variability and a smaller range suggesting consistency Variance and standard deviation offer deeper insights, where a high standard deviation reflects a wide spread of trade values, indicating instability, while a low standard deviation suggests that trade values are clustered around the mean, indicating stability and consistency in trade.

Graphical representations, including bar charts, histograms, and line graphs, effectively visualize data by highlighting patterns, trends, and distributions For example, line graphs can showcase the trends in trade volume or value between Laos and GMS countries over time, while bar charts and histograms can represent the distribution of trade across various commodities and sectors.

Descriptive statistics serve as a crucial foundation for understanding data and facilitate subsequent inferential analysis They aid in identifying trends, patterns, and anomalies, providing initial insights into Laos' commercial collaboration with GMS countries.

This research employs a mixed-methods approach, emphasizing the importance of triangulation in the data analysis process Triangulation, as defined by Denzin (1978), involves utilizing various methods, data sources, or investigators to strengthen the validity and reliability of research outcomes By comparing and contrasting qualitative and quantitative data analysis findings, this study aims to enhance the robustness of its results and offer a comprehensive understanding of Laos' commercial cooperation with countries in the Greater Mekong Subregion (GMS).

Ethical consideration

Ethical considerations play a crucial role in research, guiding researchers in their interactions with participants, data management, and the dissemination of findings This study will prioritize adherence to ethical guidelines throughout the processes of data collection, analysis, and reporting.

Informed consent is a crucial ethical principle in research that guarantees participants are fully aware of the study, including its potential benefits and risks, as well as their rights, prior to giving their voluntary agreement to participate.

In this study, informed consent will be secured from all participants, who will receive a comprehensive document outlining the research's purpose, their role, data usage, and their rights, including the ability to withdraw without penalty Participants will also be informed about the expected duration of the interview and the plan to record the conversation Interviews will only commence after participants have fully understood and agreed to these terms by signing the consent form.

Confidentiality and anonymity are essential ethical principles that safeguard the privacy of research participants Confidentiality ensures that participant information remains undisclosed without consent, while anonymity guarantees that identities are not connected to the data provided In this study, interviewee identities will be kept confidential and anonymous through the use of pseudonyms in analysis and reporting All digital recordings, transcripts, and consent forms will be securely stored, accessible only to the research team Upon completion of the research, all data will be disposed of securely, adhering to the data management policy.

Accuracy and honesty are crucial to maintaining the integrity of the research. Researchers must report their findings truthfully, without fabrication, falsification, or plagiarism (National Academy of Sciences, 2009).

This study commits to presenting all research findings with honesty and accuracy, ensuring that data remains unaltered and free from manipulation to align with the research hypotheses Additionally, all secondary data sources will be properly acknowledged and cited in accordance with academic standards.

In the context of this research, acknowledging and respecting cultural differences is crucial It is important to be aware of and sensitive to local customs, norms, and etiquette during the interview process (International Social Science Council, 2016).

To ensure respectful and appropriate interactions, the researcher will adapt interview techniques and language to align with the cultural contexts of the participants This approach emphasizes the importance of understanding and honoring the diverse backgrounds of those involved in the study.

Before starting the research, ethical approval will be obtained from the appropriate institutional review board This step includes a thorough examination of the proposed research methods and ethical aspects to ensure adherence to established ethical guidelines.

In summary, this study will rigorously follow ethical guidelines during the research process, ensuring the protection of participants' rights and well-being, while also bolstering the credibility and validity of the research outcomes.

RESEARCH FINDINGS COMMERCIAL COOPERATION

The general context of region and local

The implementation of the 8th Five-Year Plan coincides with significant regional and global challenges, such as economic and political instability, fluctuating global food and oil prices, trade conflicts among superpowers, and an increase in natural disasters and disease outbreaks These factors have directly and indirectly affected the socio-economic development of numerous countries From 2015 to 2017, global economic growth varied between 3.2% and 3.6%, but slowed to 2.8% in 2018, highlighting the ongoing rapid and complex changes in the world, including the fight against IS in the Middle East, the refugee crisis, and developments in the Korean Peninsula and South China Sea.

The COVID-19 pandemic, declared a global crisis by the World Health Organization in early 2020, has significantly affected lives and economies worldwide In 2019, the global economy contracted by 3.2%, but the International Monetary Fund (IMF) estimates a recovery with a 6% growth in 2020 However, this recovery is uneven, and high levels of risk continue to pose challenges for many countries.

During the initial phase of the 8th Five-Year Plan, global commodity prices experienced a notable decline before recovering in 2017 and 2018, as reported by the Ministry of Planning and Development Specifically, copper prices plummeted by 30%, dropping from $6,863 per ton in 2014 to $4,808 per ton in 2018 The World Bank projected copper prices to reach approximately $6,816 per ton in 2019 and $6,833 per ton in 2020 Similarly, oil prices saw a significant decrease, falling from $96 per barrel in 2014 to $43 per barrel in 2016, before rebounding to $65 per barrel by 2018 However, due to the COVID-19 outbreak, oil prices are anticipated to remain at this level or slightly lower into 2020.

The global economic outlook for the next five years is marked by significant uncertainty, primarily due to the ongoing effects of the COVID-19 pandemic This situation has resulted in record levels of debt, escalating tensions between major economies, and an increasing influence of climate change on development.

The International Monetary Fund (IMF) projects a 3.3% contraction of the global economy in 2020, followed by a recovery growth of 6.0% in 2021 and 4.9% in 2022 Long-term growth prospects hinge on the COVID-19 pandemic's severity and the effectiveness of vaccine distribution Although some regions have reopened, the recovery is expected to be uneven, with China's economy growing at a slower pace and facing risks from natural disasters that hinder poverty reduction In May 2020, China refrained from setting a GDP target due to uncertainties, complicating economic forecasts As of October 2020, the IMF estimates a 2.3% growth for China's economy, while the United States is projected to have declined by 3.5% in 2020.

As of October 7, 2021, over 219 million people have been infected with COVID-19, resulting in more than 4.55 million deaths globally In response to the rapid spread of the virus, many countries implemented strict measures, including stay-at-home orders, suspension of international flights, and restrictions on movement, leading to significant economic consequences such as airline bankruptcies and halted production This pandemic's impact is the most severe since the Great Depression, surpassing the effects of the 1997 East Asian financial crisis and the 2008 global financial crisis Additionally, COVID-19 has exacerbated global poverty, with an estimated 88-150 million people pushed back into extreme poverty, raising the global extreme poverty rate to approximately 9.1-9.4% in 2020 from 8.23%.

In 2019, development progress achieved since 2017 was notably reversed, according to the World Bank (October 2020) While the overall impact was largely negative, one positive outcome was the improvement in air quality, attributed to decreased emissions from industry and transportation, resulting in the most significant reduction in emissions since World War II.

The ongoing trade war between superpowers is predicted to persist, significantly impacting the global economy, production, and consumption, while undermining investor confidence and destabilizing the investment environment According to the United Nations, global foreign direct investment (FDI) is expected to drop by 40% in 2020 This trade conflict has weakened the renminbi, contributing to a slowdown in China's economic growth and domestic consumption, which in turn directly affects Southeast Asia's tourism industry Consequently, Laos' tourism sector and Chinese investments in the country may suffer as China's economy is projected to grow at a slower pace over the next two to three years.

Lao’s context

Implementing the 8th Five-Year National Socio-Economic Development Plan

Between 2016 and 2020, Laos faced significant challenges, including fiscal and monetary issues, as well as natural disasters like floods and droughts, which hindered economic growth In 2016, growth was only 7%, falling short of the 7.5% target, prompting the government to revise the average economic growth goal to 7.2% for the remaining years From 2017 to 2020, ongoing socio-economic difficulties, including debt and budget deficits, further reduced growth rates Natural disasters, such as Typhoon Son-Tinh in 2018 and severe flooding in 2019, along with outbreaks of diseases like African swine fever, severely impacted agricultural production and economic stability By the end of 2019, the COVID-19 pandemic led to a downward revision of the 2020 growth target from 6.5% to between 3.3% and 3.6%, resulting in an average growth rate of 5.8% for the 8th Five-Year Plan, significantly below the initial target.

Over the past five years, Laos has demonstrated resilience against economic challenges, thanks to strong government leadership and the commitment of local authorities and citizens The country has avoided recession while enhancing production and living standards, evidenced by major investment projects like the Laos-China railway and Vientiane-Vang Vieng expressway These initiatives mark a shift from reliance on natural resources to sustainable development Additionally, advancements in modernization and technology have fostered a favorable development environment Laos has successfully met the criteria for Least Developed Country (LDC) status, achieving significant milestones in Gross National Income (GNI), Human Development Index (HDI), and Economic and Environmental Vulnerability Index (EVI), all while maintaining social stability and reducing poverty.

Despite global political instability and trade tensions among major powers, Lao PDR enjoys a stable political environment, peace, and social order Citizens from diverse ethnic backgrounds express strong confidence in the leadership and policies of the Party and State, actively participating in the nation's development efforts.

However, Lao PDR continues to face budgetary constraints, climate change and natural disasters that have affected lives and properties in the past two to three years.

The COVID-19 outbreak at the conclusion of the 8th Five-Year Plan is anticipated to significantly impact the nation's economic development and the execution of the 9th Five-Year Plan Additionally, ongoing risks from global economic and trade trends persist, with global trade projected to decrease by 10-30% in 2020 and show only modest recovery by 2022 Factors such as political conflicts, climate change, and the reduction of official development assistance (ODA) further complicate the situation.

Private investment is experiencing a slowdown, with global foreign direct investment dropping by 49% in the first half of 2020 compared to 2019, prompting countries to focus on domestic investment Trade partners of Lao PDR, including China, Vietnam, Thailand, Japan, and the United States, have been significantly impacted by the COVID-19 pandemic, disrupting regional and international value chains and causing fluctuations in commodity prices and service supply and demand The implementation of stricter COVID-19 control measures has raised border costs, adversely affecting transportation To enhance long-term resilience against future natural disasters and epidemics, it is crucial for Lao PDR to refine its domestic policies Additionally, the country faces challenges such as weak public finances, difficulties in securing funding for green economic growth, and underutilization of its youthful population to boost private sector development Thus, it is essential to establish and consistently implement effective priority policies.

Lao PDR has faced significant challenges due to the COVID-19 pandemic, reporting 26,876 cases and 23 deaths as of October 7, 2021, which has severely impacted its socio-economic development To address these challenges, Laos must explore policy options aimed at mitigating the medium- and long-term effects of the pandemic, focusing on enhancing resilience through tightened and re-prioritized public spending while mobilizing diverse resources Targeted support for the most affected social sectors is essential, alongside promoting economic diversification and strengthening the competitiveness of the business sector as outlined in the 9th Five-Year Plan Additionally, developing human resources and a robust social protection system is crucial for managing future emergencies Strengthening the health sector, particularly in terms of medical equipment, staff availability, and testing facilities, is vital for improving emergency response capabilities and ensuring effective surveillance and healthcare services.

Factors affecting Laos' trade cooperation with the Mekong sub-region

4.3.1 Natural conditions and population of Laos

Lao PDR, situated on the Indochinese peninsula in Southeast Asia, covers an area of 236,800 square kilometers and is unique for being the only landlocked country in the region It shares borders with Myanmar and China to the northwest, Vietnam to the east, Cambodia to the south, and Thailand to the west Over 70% of Laos is mountainous, making it the country with the highest forest coverage in Southeast Asia at 41.5%, although this area is declining The country is divided into 17 administrative regions, including Phongsaly, Luang Prabang, and Vientiane, among others As of 2019, Laos has a population of approximately 7.16 million, with over two-thirds engaged in small-scale agriculture, and a youthful demographic where 50% are under 25 and 60% under 35.

Laos is experiencing a burgeoning middle class, primarily located in urban centers like the capital Vientiane, Savannakhet, Pakse, and Luang Prabang Approximately 23% of the population resides in urban areas, while a significant 77% live in rural regions The country is ethnically diverse, with the Lao people comprising 55% of the population, followed by Khmou at 11%, Hmong at 8%, and over 100 other ethnic minorities making up 26% The predominant religion is Buddhism, practiced by 67% of the population, while Christianity accounts for 1.5% The official languages spoken include Lao, French, English, and various ethnic languages.

Laos, strategically located at the heart of the Greater Mekong Subregion (GMS), shares borders with Cambodia, Myanmar, Thailand, Vietnam, and the Chinese provinces of Yunnan and Guangxi With a 2,000 km eastern border with Vietnam and an 1,800 km western border with Thailand, Laos is uniquely positioned as the only country in the sub-region to connect with all its neighbors Following its liberation, the Lao government prioritized addressing the aftermath of war and advancing socio-economic development to escape underdevelopment To achieve this, Laos implemented various policies aimed at economic recovery, production reorganization, and the enhancement of food production and consumer goods, while also leveraging international aid to meet the needs of its population.

Tourism has become a vital income source for Lao PDR, showcasing its pristine nature and rich multi-ethnic cultural heritage Key attractions include the UNESCO World Heritage site of Luang Prabang, the Plain of Jars, the stunning Khon Phapheng Waterfall, Li Phi Waterfall, and the historic Prasat Wat Phu, all of which draw visitors to experience the country's unique beauty and traditions.

Table 4.1: Area, population and common border of Laos with sub-regional countries

Shared border with Laos (km)

*China: China's data includes only Yunnan Province and Zhuang Autonomous Region, Guangxi.

Cooperation for development is a global trend and a necessity for countries, highlighting the importance of economic and commercial partnerships among nations and international organizations Established in 1992 by the Asian Development Bank (ADB), the Greater Mekong Subregion Cooperation (GMS) has evolved through institutional frameworks like Working Groups and Ministerial Conferences since 1995 As of 2020, GMS has nearly three decades of collaborative development, driven by the efforts of its six member countries—Vietnam, Laos, Cambodia, Thailand, and China—alongside support from regional and international donors, particularly the ADB This cooperation has significantly advanced economic and trade integration among member states.

Laos' collaboration with neighboring countries has significantly boosted trade and investment, fostering economic cooperation and enhancing liberalization in the region Despite existing differences in political, economic, and diplomatic spheres, it is crucial to promote balanced and mutually beneficial bilateral and multilateral economic partnerships between Laos and other Mekong sub-region nations.

In recent years, Laos has gained international recognition for its stable political climate, security, and defense Despite global challenges, the Lao PDR has achieved significant milestones, including the maintenance of independence, democracy, and territorial integrity, while fostering social order and safe economic growth Over three decades of renovation, the country has prioritized harmonious development, emphasizing education, high-quality human resources, and the enhancement of both material and spiritual well-being for its diverse ethnic population Laos is committed to sustainable and equitable development, improving healthcare access, and cultivating a rich cultural environment that embraces global cultural influences The government continuously invests in upgrading healthcare facilities and promoting cultural, social, and sports activities, while also working to eliminate outdated customs, thus fostering a healthy and harmonious living environment for its citizens.

The renovation and development in Laos are evident through significant improvements in infrastructure, transportation, information technology, culture, and education The Lao government has invested in and completed numerous arterial roads, enhancing travel and trade convenience for citizens Additionally, a comprehensive network of hospitals has been established, ensuring accessible medical care and proactive epidemic prevention The cultural sector is being prioritized, with an emphasis on promoting social activities, physical training, and sports In many villages, the introduction of a new cultural life is gradually replacing outdated customs and superstitions, as people become more aware of their roles and responsibilities in fostering a new, civilized society.

Education is fundamental to the development of a modern and civilized Lao society, with significant advancements in the education sector, including the universal high school education program and university training To cultivate high-quality human resources, Laos has been proactive in sending thousands of students abroad for further studies In 1995, only 0.45% of cadres held post-graduate degrees, while advanced and university degrees were at 15.16%, with no doctorates or associate doctorates By 2006, this had improved significantly, with 275 doctors, 207 associate doctors, 13,833 master's and bachelor's degree holders, and 14,905 officials qualified in advanced political theory The government prioritizes education, allocating 16% of the budget to education and training, 20% to science and technology, 10% to culture, and 11% to environmental investment.

Laos's 8th National Socio-Economic Development Plan (8th NESDP) (2016-

In 2020, development goals emphasized enhancing infrastructure in remote areas inhabited by ethnic minorities, implementing tailored social welfare and poverty reduction policies, and promoting the diverse cultural heritage of various communities to foster equality and solidarity A key strategy to support cultural heritage involves organizing cultural fairs for ethnic minorities and encouraging cultural tourism, as outlined by the Ministry of Planning and Investment in 2016.

4.3.3 National defence - security - foreign affairs

Under the leadership of the Lao People's Democratic Party, Laos has made significant strides in establishing a robust national defense, with continuous investments in the armed forces' weapons and equipment, alongside political and ideological strengthening The Lao People's Army has effectively countered disturbances and threats, safeguarding national stability, sovereignty, and territorial integrity The unity of the Lao tribes plays a crucial role in supporting the government, as grassroots security networks work closely with local authorities to identify and dismantle underground reactionary elements This collaboration has been vital in ensuring the security of national and international events in Laos Embracing the slogan "United for a peaceful and developed Laos," the Lao people rally around the party, fostering a secure environment that promotes peace, labor, freedom, and the pursuit of prosperity and happiness.

Over 72 years of construction, fighting, victory, and growth, the Lao People's Army (PLA) has achieved many feats, constructing a peaceful, stable, and prosperous Laos The Lao People's Army is becoming increasingly regular, elite and modern step by step, constantly raising a sense of vigilance, ready to fight and win This is the core force behind implementing the Party's comprehensive national defence and security line Thus, it is possible to firmly protect the country's independence, sovereignty, and territorial integrity; maintain political stability, social order, and safety; and build and defend the Fatherland This contributes to maintaining peace and stability and ensuring security and order in the region and the world.

The Lao Party and State uphold a foreign policy centered on openness and peace, fostering diplomatic and trade relations with all nations, irrespective of their socio-political systems This approach is rooted in five principles of peaceful coexistence, aiming to gain the consent and support of governments and peoples worldwide to assist Laos in overcoming the aftermath of war, revitalizing its economy and culture, and enhancing the quality of life for its citizens As a result, the Lao PDR's open foreign policy has garnered significant sympathy and backing from numerous governments and individuals globally.

Laos is an active member of various regional and international organizations, including the United Nations, ASEAN, and ASEM, demonstrating its commitment to the global community The country has established diplomatic relations with 138 nations and maintains 36 diplomatic missions worldwide Laos has successfully completed border delimitation with China, Myanmar, and Vietnam, and is currently working on demarcating its borders with Thailand and Cambodia Furthermore, the Lao government has signed visa-free agreements with 14 countries, as well as bilateral and unilateral visa exemption agreements for officials with 34 and five countries, respectively, while also implementing a visa-free entry policy for Laotians living abroad.

Over the years, the Lao Government has effectively hosted numerous international conferences, including the Mekong-Ganges Regional Ministerial Conference on Tourism Cooperation and the ASEAN-European Union Foreign Ministers' Meeting Laos is an active participant in regional cooperation organizations such as ASEAN, the Greater Mekong Subregion (GMS), and the Cambodia-Laos-Vietnam Development Triangle (CLVDT) A significant achievement was the successful organization of the ASEAN-10 Summit in Vientiane in November 2004, leading to the adoption of the Vientiane Action Plan and the ASEAN Framework Agreement aimed at establishing the ASEAN Economic Community by 2020 Laos' international standing has notably improved since joining ASEAN in 1997 and the WTO in 2013.

Overview of economic and trade cooperation relations between Laos and sub-regional countries before 2015

4.4.1 Participation in Ayeyarwady - Chao Phraya - Mekong Economic Cooperation Strategy Organisation

Laos, Vietnam, Cambodia, and Thailand have formed the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS), focusing on tangible outcomes through key projects and programs This collaboration aims to enhance economic cooperation along the East-West Economic Corridor (EWEC), North-South Economic Corridor (NSEC), and Southern Economic Corridor (SEC) Laos actively engages in Greater Mekong Subregion (GMS) economic initiatives, playing a crucial role in the implementation of the "Competitiveness and Community Linkage Strategy" within GMS Economic Cooperation.

At the fifth ACMECS Summit in Vientiane, Laos, on March 13, 2013, leaders adopted the Vientiane Declaration and the ACMECS Action Plan 2013-2015, which aimed to enhance cooperation among ACMECS countries and align with the ASEAN Economic Community 2015 This initiative sought to improve the competitiveness and global positioning of ACMECS nations within the production and supply chain The Action Plan delineated specific cooperation areas, including industry, energy, tourism, trade investment, agriculture, human resource development, transport connectivity, health and social security, and environmental sustainability.

By 2018, ACMECS had established eight key areas of cooperation: trade and investment, agriculture, industrial energy, traffic, tourism, human resource development, medical, and environment Each member country oversees at least one area, with Thailand managing trade, investment, and health; Vietnam handling human resource development and industry-energy while co-managing environmental efforts with Cambodia; Cambodia leading tourism initiatives; Laos coordinating transport; and both Laos and Myanmar collaborating on agricultural projects.

Established in November 2003, the ACMECS economic cooperation strategy focuses on enhancing collaboration among countries in the Mekong basin, named after its three main rivers The initiative encompasses eight key areas: trade investment, agriculture, energy, transportation, tourism, human resource development, health, and environment, with corresponding working groups formed for each During the 8th ACMECS Summit in June 2018, leaders emphasized restructuring these areas to prioritize infrastructure projects, regulatory harmonization, human resource and technology development, and sustainable management of transboundary water resources The Bangkok Declaration and the ACMECS Master Plan for 2019-2023 were adopted, outlining a strategic focus on strengthening infrastructure connectivity, promoting trade and financial cooperation, and fostering sustainable economic development Additionally, the establishment of the Cambodia-Laos-Myanmar-Vietnam cooperation mechanism aims to enhance integration within the Mekong subregion and ASEAN, focusing on trade, investment, agriculture, industry, energy, transportation, tourism, and human resource development.

The 1st Cambodia-Laos-Myanmar-Vietnam Cooperation Summit established the Vientiane Declaration, emphasizing enhanced economic cooperation and integration within Mekong, ASEAN, and regional frameworks, urging increased support from countries and international organizations to bridge the development gap The 2nd Meeting introduced a Four-Country Unanimous Action Plan in collaboration with Thailand to explore cooperative opportunities and improve the effectiveness of initiatives like the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy The third conference highlighted the integration of the Cambodia-Laos-Myanmar-Vietnam Action Program with the Ayeyawady-Chao Phraya-Mekong Strategic Action Program, while the 4th Conference focused on advancing cooperation in trade, investment, transport, agriculture, industry, energy, tourism, and human resource development, encouraging private sector involvement The 5th Meeting produced a Joint Statement aimed at strengthening collaboration to reduce the development gap with ASEAN nations The 6th Conference outlined key directions for enhancing coordination, facilitating trade and investment, and developing economic corridors, while the 7th Conference reinforced trade and investment cooperation, leading to new policies and agreements The 8th Conference coordinated efforts in transport, trade facilitation, industry, tourism, and human resource development At the 9th Meeting, leaders acknowledged progress in cooperation but noted that it has not matched potential, citing slow implementation, weak infrastructure, and low labor quality, while prioritizing measures to bridge the development gap, especially in human resource and agricultural development, tourism promotion, and creating a conducive business environment.

4.4.2 Participate in the construction of the CLV development triangle area

In 1999, the Prime Ministers of Cambodia, Laos, and Vietnam established the development triangle of the Cambodia-Laos-Vietnam border area, which encompasses ten provinces: Kon Tum, Gia Lai, Dak Lak, and Dac Nong in Vietnam; Sekong, Attapeu, and Saravan in Laos; and Stung Treng, Rattanak Kiri, and Mondul Kiri in Cambodia.

In 2009, Vietnam, Laos, and Cambodia expanded their development triangle to include Binh Phuoc Province (Vietnam), Kratie Province (Cambodia), and Champasak Province (Laos), aiming to enhance solidarity and cooperation among the three nations This initiative focuses on ensuring security, political stability, poverty alleviation, and socio-economic development Key areas of collaboration include security and foreign affairs, transportation, industry, agriculture, trade, investment, social sectors, and environmental protection To facilitate this cooperation, a Joint Coordination Committee with four subcommittees—Economy, Society-Environment, Localities, and Security-Foreign Affairs—was established, with each country appointing a Minister as co-chair The Minister of Planning and Investment from Vietnam currently serves as co-chair of the Committee.

At the 10th Cambodia-Laos-Vietnam Development Triangle Regional Summit, leaders from the three nations acknowledged significant progress in infrastructure, trade facilitation, regional peace, and socio-economic development They adopted an Action Plan aimed at connecting their economies by 2030, outlining a vision for cooperation and specific strategies to establish the development triangle as a key growth area within ASEAN Notably, this summit marked the first participation of the Asian Development Bank (ADB), the World Bank (WB), and ASEAN as development partners, reinforcing their commitment to fostering sustainable and prosperous integrated economies in the Cambodia-Laos-Vietnam development triangle.

The CLV region, comprising Cambodia, Laos, and Vietnam, has emerged as a rapidly growing area with notable socio-economic advancements; however, it continues to face significant challenges in achieving sustainable and inclusive economic development, combating climate change, and bridging the development gap with other ASEAN nations To address these issues, the three countries have committed to enhancing comprehensive cooperation and fostering integrated, sustainable economies as part of the ASEAN Community Vision 2025 They have collectively adopted the Action Plan for Connecting the Three Economies of Cambodia, Laos, and Vietnam to 2030, which serves as a strategic framework for promoting economic integration, improving competitiveness, and sustaining growth through enhanced institutional, infrastructure, economic, and human connectivity.

At the 11th CLV Summit in December 2000, leaders from Cambodia, Laos, and Vietnam committed to fostering economic growth, eradicating poverty, and advancing socio-cultural development within the subregion The conference recognized the efforts of the CLV Joint Coordination Committees in executing the revised socio-economic development master plan for the CLV Development Triangle, spanning 2010 to 2020 The countries emphasized the importance of continuous exchanges among CLV parliaments, governments, organizations, and citizens, enhancing cooperation across various sectors such as transport, energy, trade, investment, agriculture, tourism, healthcare, labor, and the environment.

The Mekong Subregion development program is vital for Lao PDR, with international cooperation beginning in 1957 when the United Nations Economic Commission for Asia and the Far East formed the Mekong Commission, which included Laos, Thailand, Cambodia, and Vietnam However, the commission's activities were hindered by war and genocide in Cambodia Following the 1991 Paris Conference on Cambodia, collaboration among Mekong countries has intensified, emerging as a key development focus in Asia, attracting significant interest from international organizations, particularly the Asian Development Bank (ADB).

In 1992, the Greater Mekong Subregion (GMS) comprising six countries, supported by the Asian Development Bank (ADB), initiated the GMS Economic Cooperation Program to enhance economic connections based on their shared history and culture The GMS encompasses Cambodia and China's Yunnan province, among other nations.

The Greater Mekong Subregion (GMS), encompassing the Guangxi Zhuang Autonomous Region, Lao PDR, Myanmar, Thailand, and Vietnam, spans 2.6 million square kilometers and is home to approximately 328 million people (Frielink and Bando, 2018) This region is a focal point for substantial investments from the Asian Development Bank (ADB) and various donors aimed at enhancing roads, transport, and infrastructure These initiatives have transformed into 'development corridors' or 'economic corridors' that facilitate trade and promote overall development, particularly in Lao PDR.

The East-West Corridor initiates in Mawlamyine, Myanmar, traversing through Thailand, Lao PDR, and Vietnam, with its endpoint in Da Nang, Vietnam This corridor will also link to the Cambodian port of Sihanoukville, situated on the Gulf of Thailand.

• The North-South Corridor connects Kunming in Yunnan Province, China, with Lao PDR and Thailand.

The completion of various economic corridors, supported by ADB and bilateral donors, has facilitated numerous complementary activities aimed at enhancing development along these routes This initiative has opened up significant opportunities for Laos to connect with global markets for importing and exporting goods Enhanced infrastructure in Thailand will improve connectivity between Laos and countries like Singapore and Malaysia As a result, Laos's exports will gain better access to Southeast Asian markets and ports, promoting faster and more inclusive economic growth across South and Northeast Asia, as well as South Asia and beyond.

General situation of commercial cooperation between Laos and GMS countries

Since its transition to a market economy in 1986, Laos has seen significant economic growth, particularly after joining ASEAN in 1997 and implementing the ASEAN Free Trade Area (AFTA) in 1998 The introduction of the Joint Preferential Tariff Program (CEPT) has facilitated trade relations with over 50 countries and led to bilateral trade agreements (BTAs) with 15 nations, enhancing market access for Lao exports through reduced import tariffs As a least developed country (LDC), Laos benefits from unilateral tariff preferences under the Generalized System of Preferences (GSP) from 47 countries, aimed at poverty reduction through export stimulation Since 1989, Laos has been progressively integrating into the global economy, with its strategic location enabling active participation in various organizations and mechanisms within the Greater Mekong Subregion (GMS).

2015) Laos became an active participant in regional integration and globalisation. Since joining the Association of Southeast Asian Nations (ASEAN) in 1997, Laos' participation in regional activities has steadily increased.

Laos' international trade is predominantly cross-border, with air transport being the only exception Approximately 50% of the Lao population resides in border districts, which have seen a recent influx of domestic migration These districts feature 13 international checkpoints, 12 domestic checkpoints, and 22 traditional checkpoints facilitating cross-border trade Consequently, trade opportunities in these areas contribute to higher household incomes, with average earnings in border districts surpassing the national average (Frielink and Bando, 2018).

Table 4.2: Laos' export turnover to GMS countries

Cambodia 0.524 1.85 8.98 26.4 24.2 18 7.48 19.5 50.3 133 China 656 827 1,610 1,450 1,400 1,440 1,830 1,880 1,650 2,480 Others 1,179 1,786 908 751 986 1,164 1,131 1,301 1,413 2,377 World Total 3,440 4,610 4,580 4,520 5,080 5,790 6,670 6,700 6,550 9,220

In 2021, Laos ranked as the 101st largest exporter globally, with total exports reaching $9.22 billion, a significant increase from $5.08 billion in 2016, marking a growth of $4.14 billion over five years The leading export products included Electricity at $1.96 billion, Gold at $1.79 billion, Other Uncoated Paper at $508 million, Copper Ore at $339 million, and Rubber at $300 million Thailand emerged as the top destination for Lao exports, receiving $2.99 billion, followed by China at $2.48 billion, Vietnam at $1.24 billion, Australia at $693 million, and Switzerland at $253 million.

Figure 4.1: Pareto chart of Laos’s 2021 export turnover to world destinations

For the Pareto analysis, the chart uploaded shows stacked bars for each country/ market with percentages on the y-axis and years on the x-axis Thailand

Thailand, Vietnam, and Cambodia consistently dominate the top 30-35% segment of export turnover, with Vietnam holding 20-25% and China at 15-20% Notably, Cambodia has experienced growth, increasing from under 1% to approximately 5% by the end of the period Overall, the total export turnover shows a positive upward trend, rising from 30% to 100%.

Figure 4.2: Laos' export turnover to GMS countries

Thailand is the primary export market for Laos, representing over 30% of total trade and consistently occupying the top 20% segment Following Thailand, Vietnam and China play significant roles, with Vietnam experiencing rapid growth in recent years Together, these three countries account for more than 80% of Laos' total exports, aligning with the 80/20 Pareto principle While Cambodia's share remains small, it is growing quickly, indicating potential for further expansion The overall trend of total exports shows strong growth over the past decade, emphasizing the importance of these key partners for Laos' commercial success The Pareto chart illustrates the concentration of Laos' trade among a few major partners, highlighting areas for strategic focus to enhance commercial gains.

Thailand has consistently been the top export destination for Laos from 2012 to 2021 due to several key factors The long land border between the two countries ensures easy geographical accessibility, supported by robust transport infrastructure like roads and bridges Thailand's large economy provides a significant domestic market for Lao exports, creating ample opportunities for growth Additionally, the historical cultural and socioeconomic ties foster trust and cooperation, enhancing bilateral economic relations As members of ASEAN and other regional trade blocs, both countries benefit from reduced tariffs and trade barriers, further facilitating commerce.

Major Thai companies have made significant investments in key sectors of the Lao economy, including electricity, construction, and agriculture, which has increased the importation of raw materials and goods from Laos This investment fosters a complementary economic relationship, with Thailand importing lower-value agricultural products and natural resources from Laos Additionally, remittances from Lao migrant workers in Thailand bolster local livelihoods and domestic consumption Consequently, Thailand remains the leading destination for Lao exports.

GMS cooperation is recognized as one of the fastest-growing regional collaboration channels globally, particularly in the economic sector, with trade turnover soaring from 2.4 billion USD in 1992 to approximately 216 billion USD in 2018 This cooperation is vital not only for Laos but also for neighboring countries, providing benefits in security, politics, economy, culture, and society, while enhancing each nation's regional and international standing As the center of GMS, Laos is strategically positioned with key corridors, such as the East-West Corridor from Mawlamyine, Myanmar, to Da Nang, Vietnam, and the North-South Corridor linking Kunming, China, with Laos and Thailand The Asian Development Bank (ADB) and bilateral donors have facilitated various development activities along these corridors, creating opportunities for Laos to access maritime routes through Vietnam and Thailand, potentially lowering export costs due to competitive services from Cambodia, Myanmar, Thailand, and Vietnam Additionally, GMS road projects are pivotal in reducing poverty, promoting human development, and achieving the Millennium Development Goals (MDGs), while significantly boosting transit trade and revenue from transit fees for Laos.

According to the WTO's Annual Trade Profile 2020, Laos ranked 107th in global goods exports and 119th in imports, while its service exports and imports were ranked 128th and 131st, respectively In the first five months of 2021, Laos reported a total export and import turnover exceeding 4,914 million USD, with exports at 2,445 million USD and imports at 2,469 million USD.

Table 4.3: Structure of export commodities of Laos in 2021

Animal and Vegetable Bi-Products 131,723

Animal and Vegetable Bi- Products

Figure 4.3: Structure of export commodities of Laos in 2021 (in %)

Laos' mineral products dominated exports, reaching over $2.7 billion, largely due to its abundant copper, gold, and mineral reserves, with significant investments from Thailand in mining projects In 2021, electricity emerged as the top exported mineral product to Thailand, valued at nearly $20 billion, highlighting the potential of Laos' hydropower sector This strategic partnership supports Thailand's energy needs for its growing industrial economy Iron ore and copper ore also played crucial roles, with exports valued at $2.4 billion and $3.4 billion, respectively, reinforcing the importance of these minerals for Thailand's manufacturing and processing capabilities Additional minerals like gypsum, gravel, and various metallic ores contributed significantly to the overall export value.

Meanwhile, processed minerals such as cement reached $688 million,demonstrating downstream linkages developing as Laos' projects generate construction material demand from Thailand The prevalence of industrial minerals at high values

Thailand 2.990 underscores the intertwined nature of these neighbours' economies Even so-called lesser exports such as barium sulphate, feldspar and granite collectively amounted to over $1 billion The disaggregated data cements natural resources, prominently hydropower and various ores, as the core economic bond between Laos and Thailand is worth billions of dollars annually It highlights their deep commercial interdependence founded upon Thailand's import of primary commodities from its resource-rich partner.

Figure 4.4: Radar chart of Laos’s export turnover in GMS countries

The net spider chart highlights Thailand's dominant position as Laos' primary export market, with an impressive value nearing 3 billion, significantly surpassing other countries Vietnam and China follow as crucial trading partners, with export values of 1.24 billion and 2.48 billion, respectively In contrast, Cambodia's export value stands at 133 million, indicating its smaller role yet potential for growth The "Others" category shows a modest export value of 2.37 billion to various markets Overall, the total exports for 2021 reach 9.22 billion, with Thailand, Vietnam, China, and Cambodia collectively representing the majority of this total, reflecting the Pareto principle that a few partners drive the bulk of trade.

Laos' trade In conclusion, the net spider chart presents a graphical perspective on Laos' principal concentration of exports among key neighbouring countries.

An interview with seven officials from the Ministry of Commerce of Laos PDR revealed significant insights into the commercial cooperation dynamics between Laos and other countries in the Greater Mekong Subregion (GMS).

Commercial cooperation has enabled Laos to access larger markets, which is vital for its economic growth as a small nation This access allows local businesses to scale and connect with more customers Additionally, attracting foreign investment is essential for stimulating economic development, creating jobs, and introducing new technologies and skills Moreover, such cooperation promotes knowledge exchange and capacity building, enhancing Laos' economic management and long-term competitiveness.

Despite the benefits of cooperation among GMS countries, challenges persist due to economic disparities Larger, more developed economies often gain more from trade liberalization compared to their smaller counterparts Additionally, Laos faces infrastructural and institutional constraints that impede the full realization of commercial cooperation benefits, such as inadequate transport infrastructure limiting access to regional markets and weak institutions undermining trade policy effectiveness.

Laos trade cooperation with some countries in the GMS region

In this thesis, the PhD student focuses on four Greater Mekong Subregion (GMS) countries that collaborate with Laos: Vietnam, Thailand, China, and Cambodia Notably, three of these nations are ASEAN members, with Laos-Vietnam and Laos-Thailand situated along the East-West Economic Corridor Historically, these countries have maintained strong ties characterized by shared history, politics, culture, and ethnicity Recently, the relationships between Laos, Vietnam, and Thailand have emerged as some of the most stable and peaceful in the region.

Since 1930, Laos and Vietnam have fostered a strong friendship and solidarity, leading to significant achievements in various areas Their comprehensive cooperation spans politics, foreign affairs, defense, security, economy, culture, science, and technology Additionally, collaboration between localities has played a crucial role in promoting development and enhancing regional and international integration for both nations.

Laos and Vietnam have significantly enhanced their economic cooperation over the years, with two-way trade values showing consistent growth Bilateral trade rose from 263.81 million USD in 2010 to 1.51 billion USD in 2019, marking a substantial increase Additionally, the proportion of Laos-Vietnam trade in Laos' total trade grew from 5.96% in 2010 to 12.97% in 2019, highlighting the strengthening economic ties between the two nations.

Between 2011 and 2020, trade between Laos and Vietnam exceeded 10 billion USD, with Vietnam investing over 4 billion USD in 414 projects in Laos, making it the third-largest investor in the country after China and Thailand This investment trend reflects the growing economic cooperation between the two nations, facilitated by the Bilateral Trade Agreement signed in Vientiane on March 3, 2015, which was extended from October 4, 2020, to November 4, 2021.

In October 2019, during Lao Prime Minister Thongloun Sisoulith's official visit to Vietnam, both nations acknowledged the significant advancements in their trade cooperation They committed to implementing measures that would ensure a stable annual growth rate of 10%-15% in bilateral trade, which had already reached approximately 1 billion USD in 2018 Additionally, they aimed to expedite the signing of a Memorandum of Understanding to develop and connect border trade infrastructure, further enhancing the economic complementarity between Laos and Vietnam.

In 2019, Vietnam's export turnover to Laos reached $505.31 million, marking a 16.7% increase from 2018 Notable growth was seen in several export categories, with vegetables and fruits soaring by 313.8% to $29.4 million, while confectionery and cereal products rose by 85.4% to approximately $12 million Fertilizers experienced a 38.6% increase to around $16 million, and paper products grew by 34.9% to $5.2 million Additionally, clanked and cement exports increased by 33.5% to $9.2 million, textiles and garments by 30.7% to $5.9 million, and machinery and equipment by 28.1% to $28 million Other metals and products saw a 26.6% rise to approximately $2.6 million, wood products increased by 23.1% to $40.4 million, and ceramic items grew by 13.7% to $5.3 million, while other goods overall rose by 49.1%.

Vietnam's import turnover from Laos reached $323.13 million, marking a 7% increase compared to the same period in 2018 Notable growth was observed in several categories, including wood and wood products, which surged by 85.8% to $35.5 million, fertilizers that rose by 34.1% to $40.3 million, and rubber, which increased by 32.7% to $75.3 million.

According to the WTO's 2020 annual report, Laos ranked 107th in global exports and 119th in imports for goods in 2019, while Vietnam significantly outperformed with rankings of 22nd for both exports and imports In the services sector, Laos held the 128th position in exports and 131st in imports, compared to Vietnam's 43rd and 49th rankings, respectively In the first five months of 2021, Laos reported a total export and import turnover exceeding 4.9 billion USD, with exports at 2.45 billion USD and imports at 2.47 billion USD Meanwhile, Vietnam's total trade turnover was estimated at 316.73 billion USD, comprising 157.63 billion USD in exports and 159.1 billion USD in imports as of June 2021.

Table 4.4: Main import/export markets of Vietnam and Laos, 2019

Ordinal numbers Main export markets Rate (%) Main import markets Rate (%) Việt Nam

In 2020, despite the challenges posed by the COVID-19 pandemic, both Vietnam and Laos managed to maintain a trade surplus, primarily due to a significant decline in import turnover Exports emerged as a key strength, providing a solid foundation for both economies as they approached 2021 Since 2016, Vietnam has consistently recorded a surplus in its trade balance, with each subsequent year showing an increase in the trade surplus According to the General Department of Customs, the total value of goods traded between Vietnam and Laos in 2020 reached 1,030 million USD, reflecting an 11.5% decrease compared to the previous year.

In 2019, Vietnamese exports to Laos totaled 572 million USD, marking an 18.6% decrease from the previous year and representing 0.2% of Vietnam's total global exports Conversely, imports from Laos reached 458 million USD, a slight decline of 0.7%, accounting for 0.17% of Vietnam's overall import value Between 2016 and 2020, Vietnam consistently enjoyed a trade surplus exceeding 100 million USD with Laos.

Notably, in 2020, exports and imports were reduced due to the impact of the COVID-

By the end of May 2021, Vietnam-Laos trade turnover reached 570.7 million USD, marking a 39.3% increase from the same period in 2020 and a 16.7% rise compared to 2019, prior to the COVID-19 pandemic Vietnam's exports to Laos totaled 280.3 million USD, up 23.5% from 2020, while imports from Laos surged to 290.4 million USD, reflecting a 58.9% increase over the same timeframe This growth is attributed to the political commitment of both countries' leaders and proactive measures taken by authorities to address challenges, enabling businesses to swiftly adapt to the ongoing pandemic.

Table 4.5: Export and import turnover and trade balance of Vietnam - Laos

Year Vietnam exports to Laos Vietnam imports from Laos Trade balance

Source: General Department of Customs (2021)

Table 4.6: Some major export/import products of Vietnam to/from Laos in 2020

Items Unit (USD) Items Unit (USD)

Iron and steel 7,2 million Rubber 104,6 million

Iron and steel products 50,4 million Wood and wood products

Machinery 46,2 million Ores, commodities 28,2 million

Wood and wood products 24,4 million Other common metals 1,2 million

Source: Author's compilation from the General Department of Customs (2021)

From 2016 to 2020, iron and steel were the leading imports from Vietnam to Laos, with imports valued at 72 million USD in 2020, reflecting a 16.5% decline from 2019 This market represented only 1.4% of Vietnam's total iron and steel exports The peak years for these exports were 2018 and 2019, reaching 87.1 million USD and 86.2 million USD, respectively Iron and steel products saw an increase in exports to 50.4 million USD in 2020, a 22.2% rise from the previous year, making up 8.8% of Vietnam's total exports to Laos Notably, this category has shown consistent growth and resilience against the impacts of the COVID-19 pandemic In 2020, vehicles and spare parts ranked third among exports to Laos, totaling 46.8 million USD, a 14.7% decrease from 2019, and accounting for 8.2% of Vietnam's total exports to the country The highest export value for this category was recorded in 2018 at 57.7 million USD.

In 2020, the Ho Chi Minh City Trade Investment Promotion Center (ITPC) reported that Vietnam's import turnover of rubber products from Laos reached 104.6 million USD, marking a 15.1% decrease from the previous year and accounting for 22.8% of total imports from Laos, as well as 7.1% of Vietnam's overall import value of rubber from all countries In comparison, the rubber import turnover in 2019 was 123.2 million USD Additionally, imports of wood and wood products from Laos amounted to 58.3 million USD, reflecting a 6.4% increase.

In 2019, imports from Laos accounted for 12.7% of total imports, with wood products peaking at 79.5 million USD in 2016 before declining to 33.3 million USD in 2018, then rebounding in subsequent years Fertilizer products ranked third, totaling 46.9 million USD in 2020, a 13.2% decrease from 2019 and representing 10.2% of Vietnam's imports from Laos, equivalent to 4.9% of similar imports from other partners The most significant import year was 2019, with a value of 54.1 million USD (ITPC, 2021).

In 2020, the Vietnam-Laos trade experienced a total import and export turnover of 1,029,880,539 USD, reflecting an 11.5% decrease compared to the previous year Exports amounted to 571,745,063 USD, marking an 18.6% decline, while imports were recorded at 458,135,476 USD, showing a slight decrease of 0.7%.

RECOMMENDATION FOR LAOS TO STRENGTHEN

The importance of Laos' commercial cooperation with the countries of the

Lao PDR has played a pivotal role in the Greater Mekong Subregion (GMS) by actively participating in various organizations and mechanisms since joining ASEAN in 1997 Its involvement in regional activities has significantly increased, highlighted by hosting key events such as the 10th ASEAN Summit in 2004 and participating in the ASEAN Ministerial Meeting, ASEAN Regional Forum (ARF), and ASEAN Inter-Parliamentary Organization (AIPO) Additionally, trade agreements and normalized relations with the United States have expanded opportunities for Lao products, enhancing export potential.

Laos is a pioneer in the Mekong subregion for implementing the GMS Agreement, which enhances coordination among agencies, streamlines border crossing processes, and lowers transport costs This initiative promotes trade, tourism, and investment along the East-West Economic Corridor (EWEC) In 2004, Laos, Vietnam, and Cambodia formed the CLV Development Triangle to leverage regional advantages and bridge development gaps Their collaboration has successfully advanced hunger eradication, poverty reduction, and socio-economic development, particularly through the improvement of transport networks, especially road routes.

Thailand, Vietnam, and China are poised to continue as Laos' primary economic partners, thanks to their long-standing ties within the Greater Mekong Subregion (GMS) In the first quarter of 2021, Laos recorded a total trade turnover of 3.1 billion USD with approximately 20 countries, resulting in a trade deficit of 100 million USD The significant trading relationships with Thailand, China, and Vietnam underscore their importance in Laos' investment and trade landscape.

In 2021, Laos demonstrated significant export activity, with staples like cassava generating $175 million, alongside gold and synthetic gold exports valued at $268 million Conversely, the country imported $121 million in motorcycles and agricultural tractors, in addition to substantial diesel imports.

In the first quarter of 2021, Laos achieved significant export figures, with total exports to Thailand amounting to $296 million, while exports to China reached $657 million and Vietnam imported goods worth $337 million from Laos Key exports included $150 million in cassava to Thailand, $73 million in cattle to Vietnam, and $124 million to China Additionally, Laos invested $98 million in heavy machinery during this period.

Laos engages in significant trade with its largest partners, importing approximately $795 million from Thailand, $309 million from China, and $143 million from Vietnam Key imports from Thailand include $112 million worth of diesel, while iron and steel imports from China total around $39 million.

Thailand, Laos, and Vietnam are strategically positioned along the East-West Economic Corridor, a vital route for trade and connectivity in the Greater Mekong Subregion (GMS) These countries are enhancing border transport regulations to facilitate travel and boost border trade, while also fostering energy cooperation and improving subregional transport connectivity This initiative aligns with the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) master plan, which encompasses political, economic, and cultural collaboration among Laos, Vietnam, Cambodia, and Myanmar.

It is required to bridge the economic gap between these blocs and sustainably promote prosperity Ways to tackle illegal migrant workers from Laos have also been on the agenda.

Laos is enhancing its trade prospects by reducing tariff rates to 0% for most goods from subregional countries under the ASEAN Trade in Goods Agreement and bilateral agreements The country is actively promoting foreign investment in infrastructure, agriculture, and animal husbandry to fully utilize its land resources By strengthening production and supply chains, Laos aims to build strong brands and expand its goods into GMS and ASEAN markets Collaboration between Lao and GMS enterprises will facilitate the production and export of key products like wood, rubber, coffee, cashew nuts, and textiles However, the East-West Economic Corridor (EWEC) faces challenges, including inadequate infrastructure and poor road conditions in many provinces, which limit investment in infrastructure development.

It is necessary to make more efforts to overcome the limitations and quickly integrate with Laos Laos is stepping up the implementation of the policy of

"Narrowing the gap and developing towards ASEAN integration In order to partially implement measures to remove trade barriers, Laos officially abolished tariffs on car imports on

As of January 1, 2016, vehicles imported from ASEAN countries are exempt from import duties in Laos, a significant change considering that import taxes previously contributed 11% to the country's state budget revenue To offset this loss, Laos has introduced a consumption tax, which generates sufficient revenue to replace the funds previously collected from import taxes.

In 2016, the Lao government initiated plans to upgrade and expand Wattay International Airport in Vientiane, aiming to boost its transport capacity to 2-3 million passengers per year The construction of a larger international terminal is crucial for enhancing the economy and supporting Laos' tourism sector Additionally, Laos is set to construct a new international airport located 35 kilometers south of downtown Vientiane, further improving air travel infrastructure.

The Lao handicraft industry is actively engaging in promotional activities and hosting handicraft fairs featuring renowned craft villages from Laos, ASEAN embassies, and partner nations Various workshops organized by Lao ministries aim to enhance the skills and product quality of craft villages, while increasing their awareness of regional and global markets This initiative seeks to foster cooperation and develop the handicraft sector to meet the Lao government's export turnover goals To compete with higher-quality and lower-priced imported goods from ASEAN countries, Laos must focus on improving the quality of its products and services Additionally, the government should continue to diversify and enhance the export and processing of predominantly agricultural and mineral products, thereby creating greater value and job opportunities for local communities.

To maximize the advantages of preferential exports, exporters should diversify their product offerings and carefully select Free Trade Agreements (FTAs) that align with their comparative strengths, while also encouraging the private sector to leverage FTA incentives The Ministry of Industry and Trade must enhance human resource development by sending promising staff abroad for training in FTA-related techniques, fostering a pool of academic experts in this field Additionally, the government should implement regular technical training sessions for entrepreneurs and follow-up evaluation programs to assess the effectiveness of FTAs.

Improving transport infrastructure between Laos and GMS countries is crucial for enhancing "soft infrastructure" cooperation, such as streamlining procedures, which aids in border crossing, tourism development, and human resource training This collaboration aims to transform transport corridors into economic development pathways that address poverty alleviation in the economically disadvantaged regions of Laos, Thailand, and Vietnam By strengthening infrastructure, the involved parties can reduce development disparities and foster connections within ASEAN and globally It is essential to leverage the complementary advantages of each country, including resources, natural conditions, and cultural heritage, to expand markets, enhance foreign economic relations, and attract both domestic and foreign direct investment.

Enhancing transport infrastructure among Laos and GMS countries is crucial for fostering "soft infrastructure" cooperation, which includes streamlining procedures for border crossings, tourism, and human resource development This collaboration aims to transform transport corridors into economic development pathways that alleviate poverty in economically challenged regions of Laos, Thailand, and Vietnam By improving infrastructure, the parties involved can narrow the development gap and strengthen regional ties within ASEAN and globally Leveraging the complementary advantages of each country—such as resources, natural conditions, and cultural heritage—will facilitate the expansion of foreign economic relations, boost trade and investment, and attract foreign direct investment through enhanced connectivity with international markets.

Discussion of Laos' Participation in the Subregion (GMS)

Laos has achieved significant growth in trade through its commercial cooperation with other GMS countries since the establishment of the GMS Economic Cooperation Program in 1992 Notably, bilateral trade with Vietnam surged to over USD 1 billion in 2019, a dramatic increase from just USD 30 million in the early 1990s Additionally, trade with Thailand has thrived, with Thailand emerging as Laos' largest export market, highlighting the robust economic ties within the region.

The growth of trade in the Greater Mekong Subregion (GMS) is largely due to the removal of trade barriers and streamlined customs processes facilitated by bilateral and multilateral agreements, notably the Cross-Border Transport Facilitation Agreement (CBTA), which has significantly reduced non-physical trade barriers and encouraged cross-border economic activities (ADB, 2020) Laos has seen a notable increase in Foreign Direct Investment (FDI), particularly from China, which has invested heavily in sectors such as hydropower, mining, agriculture, and services, thereby stimulating economic growth, job creation, and technological transfer (UNDP, 2019) Infrastructure development, including roads, bridges, and the China-Laos railway, has enhanced connectivity and economic integration within the region, transforming Laos from a 'landlocked' to a 'land-linked' nation (Xinhua, 2022) Additionally, the establishment of Special Economic Zones (SEZs) like the Savan-Seno SEZ has attracted substantial investments in manufacturing and services, promoting economic diversification and enhancing export competitiveness (World Bank, 2018) Furthermore, Laos has leveraged its hydropower resources for energy cooperation, exporting electricity to neighboring GMS countries, particularly Thailand, which has bolstered its economy and contributed to regional energy security (MRC, 2020).

According to the GMS Transport Sector Strategic Study completed in May

In 2006, Lao PDR aimed to enhance its connectivity by identifying key projects to integrate into the Greater Mekong Subregion (GMS) multimodal transport network This strategy is designed to attract investment in essential transport infrastructure, completing major corridors and improving the country's competitiveness by lowering travel times and transport costs Alongside the Vientiane-Nongkhai railway, Lao PDR is also focused on developing a synchronous railway system to link its main cities with neighboring countries.

Laos actively engages in the Mekong sub-region under the GMS Agreement, enhancing inter-agency coordination to streamline border crossing procedures for people, goods, and vehicles, thereby lowering transportation costs This initiative promotes trade, tourism, and investment along the East-West Economic Corridor (EWEC) In 2004, Laos, in collaboration with Vietnam and Cambodia, established the Development Triangle (CLV), which has leveraged regional potential, reduced development disparities, and supported the socio-economic growth of border provinces in all three nations.

Laos, along with Vietnam, Cambodia, Myanmar, and Thailand, has established the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy (ACMECS) to enhance economic collaboration through key projects like the East-West Economic Corridor (EWEC), North-South Economic Corridor (NSEC), and Southern Economic Corridor (SEC) The country has actively signed and implemented various bilateral and multilateral agreements to streamline transport, customs, and border entry processes, facilitating the movement of people and goods Laos prioritizes cooperation within the Mekong region, working closely with neighboring countries and development partners to promote sustainable development, peace, and stability, while also contributing to the Greater Mekong Subregion (GMS) economic cooperation initiatives and the implementation of the GMS's "Competitiveness Strategy."

Laos serves as a vital link in the Greater Mekong Subregion (GMS) transport corridor, significantly contributing to the establishment of GMS sub-regional economic corridors To enhance its role, Laos must focus on strengthening trade promotion and investment strategies, facilitating cooperation in exports and imports, and liberalizing intra-regional trade and investment By actively and proactively engaging with neighboring countries, Laos fosters friendly relations and creates a favorable international environment for economic development, thereby enhancing its position and leveraging the advantages of both Laos and its partners within the GMS subregion.

Laos is a strong advocate for the Greater Mekong Subregion (GMS) Cooperation Initiative, which has led to the development of crucial transportation routes Key projects, such as the Phnom Penh - Ho Chi Minh City expressway and the East-West traffic corridor connecting Mucdahan (Thailand), Savanakhet (Laos), and Quang Tri to Da Nang (Vietnam), have significantly enhanced the infrastructure of Laos and its neighboring countries.

Laos is actively collaborating with sub-regional countries to foster sustainable tourism growth in the coming years The tourism sectors of the six GMS countries are working together to enhance competitiveness on a global scale, effectively catering to the needs of both local and international tourists Laos has engaged in various tourism forums as part of its commitment to subregional economic cooperation and has established joint initiatives to showcase each country's cultural and tourism assets Additionally, Laos has participated in signing three protocols under the GMS Agreement, which streamlines passenger movement across borders and implements customs checks at key border points along the East-West Economic Corridor (EWEC), thereby promoting safe and legal tourism development among the countries involved.

GMS cooperation has emerged as one of the fastest-growing regional collaboration channels globally, particularly in the economic sector, with trade turnover soaring from 2.4 billion USD in 1992 to approximately 216 billion USD in 2018 This cooperation is vital for Laos and neighboring countries, offering significant benefits across various dimensions, including security, politics, economy, culture, and society, while enhancing their positions both regionally and internationally Recognizing the critical role of subregional cooperation and international economic integration, Laos and its partners are committed to achieving their socio-economic development goals Recent years have seen substantial progress in GMS collaboration, further strengthening inter-country relations, with Laos placing high value on the importance of GMS cooperation for its socio-economic advancement.

Laos actively engages in various cooperation mechanisms within the Greater Mekong Subregion (GMS), participating in significant events that enhance regional collaboration As part of the Cambodia-Laos-Vietnam (CLV) cooperation framework, Laos has contributed to the re-planning of the CLV Development Triangle for 2020 and developed a multilingual website to promote communication in English, Vietnamese, Lao, and Khmer Through effective coordination with neighboring countries, Laos strengthens bilateral relations and expands partnerships with key stakeholders in the subregion (Nguyen Viet Xuan, 2020).

Joining the GMS has significantly benefited Laos by opening up markets and enhancing attractiveness for trade The elimination of ASEAN tariff barriers has created new opportunities for Lao exports within the region, while also reducing the cost of imported goods Additionally, Laos stands to gain valuable experience in areas like skilled labor training, economic management, and investment management By effectively leveraging these experiences, Laos can advance its development, tackle poverty, and improve its socio-economic standing relative to other ASEAN member states.

Laos is poised to enhance its electricity exports thanks to its abundant natural resources The country's vast areas of vacant land present attractive opportunities for foreign investment, which is crucial for its socio-economic development Additionally, Laos's rich tourism potential is set to draw an increasing number of international visitors.

The development of economic corridors in Lao PDR requires vigilant monitoring and timely intervention, necessitating a unified set of indicators for each corridor to track inputs, actions, outcomes, and impacts effectively The GMS energy sector strategy highlights the Mekong River's substantial hydropower potential, with Laos dedicated to addressing critical issues in its official response The country encourages increased participation, information sharing, field visits, and joint monitoring to ensure the project minimizes significant cross-border impacts while maximizing benefits for all stakeholders involved.

The commercial partnership between Laos and other Greater Mekong Subregion (GMS) nations has achieved significant milestones; however, it continues to face various challenges Ongoing issues in trade, investment, infrastructure development, and regional integration hinder progress and require attention for future growth.

Despite notable advancements in reducing trade barriers within the Greater Mekong Subregion (GMS), challenges persist, particularly non-tariff barriers such as intricate customs procedures, inconsistent standards, and inadequate border infrastructure These factors lead to increased costs and prolonged cross-border trade times, hindering the full potential of trade cooperation Additionally, while Foreign Direct Investment (FDI) from GMS nations has positively impacted Laos' economy, there are ongoing concerns regarding the unequal distribution of benefits, as most FDI is concentrated in sectors like mining and hydropower, with limited positive effects on other economic areas.

Orientation of national economic development and trade cooperation of Laos…

- National Economic Development Policy of Laos for the period 2021 -2025

The 9th 5-Year National Socio-Economic Development Plan (2021-2025) of Lao PDR seeks to implement the XI Party Congress Resolution and the National Strategy for Socio-Economic Development through 2025 and Vision 2030 This plan aims to initiate a significant shift in socio-economic development while emphasizing the importance of political, ideological, and economic institutions It prioritizes economic development alongside socio-cultural progress, including human resource enhancement and strengthening management and public administration The focus is on maximizing the country's potential in key manufacturing and service sectors, promoting green and sustainable development, improving living standards, and ensuring a balanced international trade and payment system to prepare for future growth from its current status as a least developed nation.

The 9th NSEDP aims to address economic and financial challenges while fostering four key breakthroughs: innovation, human resource development, enhancing administrative management, and proactive poverty reduction By implementing these strategies, the plan seeks to eliminate obstacles related to economic vulnerability, debt issues, budget management, exchange rate fluctuations, inflation, and unemployment This comprehensive approach is designed to prevent potential crises through extensive economic restructuring, maximizing the country's potential, and ensuring a focus on quality, green, and sustainable growth.

- Laos' free trade agreement with GMS countries

In 1992, the six Greater Mekong Subregion (GMS) countries, supported by the Asian Development Bank (ADB), initiated the GMS economic cooperation program This program is designed to enhance economic development and foster regional integration by strengthening economic relations among the member countries Central to the GMS program is the enhancement of the "3C" framework—connectivity, competition, and community.

The GMS program is a project-oriented subregional economic cooperation initiative that differs from other regional agreements like ASEAN, the EU, MERCOSUR, and NAFTA, as it does not establish a free trade area or investment framework Notably, five of the six GMS member states, excluding the People's Republic of China, are also part of ASEAN, allowing them to leverage ASEAN's trade and investment frameworks Other examples of subregional agreements include BIMP-EAGA, IMT-GT, and CAREC, which further illustrate the diverse approaches to regional economic collaboration.

- Import and export orientation of Laos.

In recent years, Laos has experienced significant trade liberalization driven by the New Economic Mechanism (NEM), which initiated the shift from a centrally planned to a market economy in the 1980s Regional agreements, notably the ASEAN Free Trade Area (AFTA), have further facilitated this trade liberalization, leading to lower average tariffs that continue to decrease with ongoing AFTA commitments While the process for obtaining import licenses has been streamlined, there remains a need for greater transparency and the eventual replacement of these licenses with more suitable regulations.

Laos' trade policy is increasingly influenced by regional and bilateral agreements, such as AFTA, the Early Harvest Program of the China ASEAN Free Trade Agreement, and the bilateral trade agreement with the United States As Laos moves forward, it is expected to reduce the most-favoured-nation tax as part of its WTO commitments, which will help mitigate trade diversion risks associated with current tariff differentials based on import origins The Commerce Department will also take trade diversion risks into account when planning future tariff reforms.

Laos, a member of the ASEAN Free Trade Area (AFTA) since July 1997, benefits from significantly reduced tariffs on imports from its main trading partners within ASEAN Under the AFTA agreement, each member country has established a Common Effective Preferential Tariff (CEPT) for trade among them Initially, the six original ASEAN members have lowered their CEPT rates to between 0% and 5% for most imports, excluding sensitive Unprocessed Agricultural Products (UAP) and a limited number of items permanently exempted for reasons related to religion, ethics, health, or public safety To facilitate the implementation of AFTA, all imports are categorized according to the Harmonized System (HS) code.

- Non-tariff barriers to imports.

Despite the overall low and streamlined tariffs, the situation regarding non-tariff barriers in Laos remains ambiguous According to the IMF's 2004 Trade Restrictions Index, while Laos had high tariff rates, its non-tariff barriers were relatively low.

Non-tariff barriers, while theoretically reduced, continue to create conflicts in practice Although these barriers have significantly decreased since the introduction of the New Economic Mechanism in 1986, they still pose challenges By 2005, issues such as exchange rate controls had largely been resolved, and customs and administrative procedures for imports and exports were simplified However, import licensing requirements, although now primarily for monitoring and registration, still lead to unnecessary delays.

With the full implementation of the ASEAN Free Trade Area (AFTA), most products will experience zero tariffs, while the majority will incur tariffs of less than 5% Currently, over 80% of tariff lines have a tax rate below 5% As AFTA progresses, only a minimal percentage of tariff lines will be subject to rates exceeding 5%, primarily affecting the most sensitive products.

Some recommendations

To capitalize on development opportunities and navigate challenges, particularly the adverse effects of the COVID-19 pandemic, Lao enterprises must enhance their initiatives in sourcing imports The Lao government is committed to facilitating the participation of sub-regional countries in investment and business processes within Laos With numerous international border gates and sub-border gates, there are significant opportunities for economic exchanges, travel, and the import and export of goods and labor between Laos and neighboring countries Recommendations for the GMS Program and the Economic Corridor should focus on strengthening these initiatives.

Effective coordination between GMS and Lao PDR programs, ministries, the Ministry of Planning and Investment (MPI), and both central and provincial governments is crucial This collaboration aims to consolidate resources and efforts, thereby maximizing the benefits from GMS projects It is essential to focus on additional projects and policies while implementing specific GMS monitoring and evaluation (M&E) systems to ensure optimal outcomes.

To enhance the effectiveness of the next NSEDP, it is crucial to strategically integrate the GMS program into the planning process of Lao PDR By analyzing the GMS program's role, the government can better understand how to leverage regional outreach to maximize national benefits.

Evaluation of GMS projects and inclusion in the national planning system based on results-based planning will better ensure the maximum benefits from GMS projects.

To enhance the effectiveness of economic corridors in Lao PDR, it is essential to establish a long-term vision and strategy This necessitates focused and coordinated efforts from the Lao government, supported by development partners, to optimize the benefits of GMS corridors for the country's development.

Lao PDR, positioned as the central "transit country" in the Greater Mekong Subregion (GMS), should leverage the Economic Corridors Forum (ECF) to address national interests The ECF serves as an effective platform for knowledge sharing, enabling Lao PDR to enhance collaboration with fellow member states.

To enhance the effectiveness of corridor planning and investment, it is essential to establish dedicated teams with defined work schedules and tenures focused on specific programs, projects, or economic corridor development These specialized teams will be responsible for creating and coordinating strategic action plans aimed at developing economic corridors, as well as overseeing the implementation and monitoring of these initiatives.

Each GMS corridor in Lao PDR should be evaluated individually, acknowledging its unique strengths and weaknesses The GMS Economic Corridor system, which received approval in December 2016, emphasizes the importance of a country-centered naming convention This approach aims to enhance clarity regarding the economic and social impacts of each corridor, ultimately maximizing the benefits of economic corridor development in Lao PDR.

- Combine inland ports in order of transportation agreement Establishing

"inland ports" to provide logistics services is a recent development and makes the most of Lao PDR's strategic location and existing and planned transport corridors.

- GMS Program and Economic Corridor: Strengthening existing monitoring and evaluation systems (Frielink and Bando, 2018).

The GMS Secretariat has outlined routes for Laos based on field surveys and discussions with central and local governments, recommending that Laos, GMS countries, and the Asian Development Bank (ADB) focus on enhancing GMS economic corridors Key proposals include upgrading roads in Laos, implementing an electronic road toll collection system, and improving cross-border stations for vital regional connections The identified corridors include the East-West Economic Corridor, North-South Economic Corridor-1, North-South Economic Corridor-2, North-South Economic Corridor-7, North-South Economic Corridor-8, and Southern Economic Corridor-4, ensuring that Lao PDR both contributes to and benefits from regional development.

The Lao government must expand Wattay International Airport in Vientiane to accommodate 2-3 million passengers annually, which is crucial for boosting the economy and tourism Constructing a larger international terminal is essential, alongside plans for a new airport to enhance international travel With its energy export advantages and significant tourism potential, Laos stands to gain substantially from the completion of the GMS regional transport system next year, positioning itself as a key player in regional tourism and exports.

Establishing an SME cooperation network in the Greater Mekong Subregion is essential for enhancing information sharing among SMEs about opportunities, regulations, market trends, and best practices This network would facilitate collaborative marketing efforts, enabling SMEs to jointly promote their products and services across the region Furthermore, it would streamline the sourcing of raw materials and components from neighboring countries and foster collaboration on vocational training programs Developing an online digital platform would connect SMEs virtually, allowing for effective networking, communication, and identification of cooperation opportunities.

To enhance exports for SMEs in Laos, it is crucial to implement targeted trade promotion programs aimed at promising GMS markets like Thailand, Vietnam, and Cambodia These initiatives should include outbound trade missions for SMEs to connect with buyers and distributors, as well as business matching services to foster commercial relationships Organizing trade fairs and vendor exhibitions can effectively showcase Laotian products Additionally, providing support to help SMEs navigate customs procedures and regulatory compliance in export destination markets is essential for their success.

To enhance cross-border expansion for SMEs in the Greater Mekong Subregion (GMS), it is essential to improve access to financing Developing financing and credit guarantee schemes specifically designed for cross-border SME growth will address the current capital limitations hindering regional and international expansion Additionally, partner organizations focused on SME promotion in various GMS countries can play a crucial role in facilitating access to these financial resources.

To unlock the full potential of SME commercial opportunities in the GMS region, ongoing partnership and collaboration among GMS countries is essential The proposed recommendations focus on reducing barriers and costs, while fostering cross-border cooperation, trade, and investment connections for small businesses.

LIST OF WORKS RELATED TO THE DISSERTATION

THAT THE PHD CANDIDATE HAS PUBLISHED

1 Nguyen Hoang Duong, Saymanolinh Sinbadhit, Kongta Khamket, Sakhone

Phommalath (2022), ‘A literature review on sustainable logistics for E- Commerce’, International conference proceedings: Digital transformation in international supply chain, pp.69-92, Labor publishing house.

2 Saymanolinh Sinbadhit, Khamphoui Sibounheuang, Nguyen Thi Chi (2023),

‘Commercial cooperation in Laos PDR: Some issues and challenges’, The 17 th

Ifeama international conference proceeding in Vietnam: Knowledge transformation and Innovation in Global Society: From the perspectives in a transforming Asia, pp.1299-1317, National Economics University Publishing

3 Nguyen Phuong Lan, Dang Dinh Dao, Mai Tung Man, Saymanolinh Sinbadhit

In 2023, the article "Legalizing Logistics Real Estate in Vietnam to Promote Import-Export in the New Context" was published in the International Conference Proceedings, highlighting the importance of developing the logistics system to enhance the export and import of goods and services in Vietnam The publication emphasizes the need for legal frameworks to support logistics real estate, which is crucial for facilitating trade in the evolving economic landscape Pages 602-609 detail strategies for optimizing logistics operations to boost Vietnam's position in global markets.

1 Alfaro, L., Chanda, A., Kalemli-Ozcan, S., & Sayek, S (2004), ‘FDI and economic growth: The role of local financial markets’, Journal of International

2 American Psychological Association (2017), ‘Ethical Principles of

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