Lao Voices

Entrepreneurs call for high ceiling on import tariffs

Representatives of private enterprises in Laos have proposed that the government make the ceiling for import tariffs as high as possible, as a way of protecting the market for Lao-made goods.

The representatives from several private companies, including manufacturers of cement, steel, and agricultural goods, submitted the proposal to the Deputy Director General of the Policy Department of the Ministry of Industry and Commerce, Ms Bansati Thepvongsa, one of officials responsible for World Trade Organisation (WTO) membership negotiations, during a meeting held on Monday at Lao Plaza Hotel in Vientiane.

The meeting aimed to provide local enterprises with information about the opportunities and challenges of being a member of the WTO, as well as providing a forum for enterprise representatives to express their opinions on the issue.

The representatives explained that at present, their domestic products could sell well in local markets as similar imported products were more expensive because of the high import tariffs. However, locally made products would be unable to compete once the Lao government began allowing foreign products to enter the Lao market with low import tariffs.

Speaking after yesterday’s meeting, Ms Bansati said the government was aware of the issues and was prepared to raise the concerns of Lao entrepreneurs at the next meeting with WTO negotiation partners.

She said she approved of the stance taken by entrepreneurs at the meeting, adding that Lao negotiators planned to set as high a ceiling as possible for import tariffs, as a way of promoting and protecting domestic products.

She explained that all WTO member countries had the right to propose import tariff ceilings; however it was up to other members to agree with proposal before it could be put into practice.

“We must have good reasons to explain why we need higher import tariffs, to convince other WTO members to agree with us. This will be difficult, as negotiation partners have a firm expectation that Laos will introduce much lower tariff rates,” she said.

She said she could not confirm what the exact proposed tariff rate would be, because it would remain flexible until the negotiations.

Ms Bansati said it was natural that each country wanted high import tariff rates, while expecting other countries to reduce their own rates to allow them to export their products at competitive prices.

She said each country considered import tariffs not only as a source of income but also as a tool to protect domestic products; the higher the ceiling for tariffs, the greater the country’s advantage.

“This would also mean that we could decrease the tariff rate as need be, such as when we require products such as raw materials for investment projects,” she said.

By Ekaphone Phouthonesy
January 30, 2008
Vientiane Times