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This paper applies the logistic case of the error correction mechanism to the empirical analysis of the demand for commodity exports of the developing countries. Its appropriateness for the characterization of the data-generating process of the demand for commodity exports is illustrated, and estimates are presented for Latin America's major commodity exports. The empirical results point to an important role for relative prices in the determination of the demand for primary commodity exports. Copyright 1989 by Blackwell Publishing Ltd

The WTO’s new Agreement on Trade Facilitation (ATF) will help to reverse the region’s deceleration of overall export growth and, when implemented, could add as much as 3 percent to regional GDP and lift employment across the region by 1.2 percent. In the region’s developing economies, inefficient border and behind-the-border procedures are well above those of the NIEs and far exceed those of the developed economies. Persistent and often growing protectionism has broadly continued as countries have added further measures to their stock of Non-Tariff Measures (NTMs), which now account for as much as 90% of trade costs other than transportation. As such, it defines a new reform agenda for the East Asian economies that could have far-reaching effects on private sector development, especially for small businesses that need greater transparency and simplification of procedures to enable them to more readily access regional and global value chains.

This study provides a review and analysis of the findings from the scoping study on the proposed Malaysian–Thailand Special Border Economic Zone (SBEZ). The study is part of a broader project that intends to support the establishment of an SBEZ that will help to attract investors in productive activities that promote subregional value chains in order to stimulate cross-border trade and investment, serve as a catalyst to commerce along the IMT-GT corridors and help to substantially improve the social and economic welfare of the population along the border provinces. Each border crossing has been assessed on the basis of the following components, details of which are presented in the main body of this report: (a) special economic zone (SEZ) potential; (b) cross-border value chains; (c) transport and logistics; (d) socio-economic development strategy for the area; (e) SME development and business development services: (f) linkages to Indonesia. The proposed SBEZ is best viewed as incremental levels of collaborative of Malaysia, Thailand and Indonesia. Level 1 would cover the establishment of SBEZ facilities and supporting activities on either or both sides of the border; Level 2 would involve development of cross-border value chains and hard and soft infrastructure supporting the SBEZ; and Level 3 would consist of collaboration in joint SBEZ facilities and supporting activities. This stepwise approach reflects international best practices for the development of cross-border SEZs in Europe, North America and Asia. It ensures that actions on either side of the border move from an informal to formal mechanisms of collaboration, thereby providing an effective mechanisms for achieving long-term goals for the operation of a joint SBEZ.

Laos benefits from the ASEAN-India Free Trade Agreement in Goods (AIFTA) by gaining preferential access to the large Indian market. Under the Agreement, India commits to eliminating customs duties on imports for 90% of its tariff lines under two separate lists: one being completed by the end of 2013; the other, by end-of-2016. For products on the sensitive list, India’s tariffs are being reduced to no more than 5% by the end of 2016. For its part, Laos has until 2021 to eliminate tariffs on its normal and sensitive tracks. How Lao Producers and Exporters Benefit from AIFTA - Because India’s level of trade protection is over twice as high as in the ASEAN countries, Laos’ ability to bypass high tariffs gives it a particularly strong competitive advantage over non-AIFTA member countries. - India’s average tariffs on agricultural products is 3.5 times higher than that of the ASEAN countries, making it extremely advantageous for India to buy agricultural products from Laos rather than from non-AIFTA countries. - India’s logistics environment is relatively favorable to trading. It outperforms the average of other East Asian countries in quality of transport and IT infrastructure, logistics competence of officials, international transport costs, traceability of shipments, and timeliness of shipments. This type of logistics environment helps to facilitate transport of goods from Laos. - India is one of the fastest growing markets in Asia. The country’s real import growth rate in the last few years has been substantially higher than that of the East Asian economies. This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources.

Laos benefits from the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA). The Agreement has eliminated tariffs on 90% of Australia’s and New Zealand’s imports, with the remaining tariff lines to be removed by 2020. For Laos, it provides for a much longer transition period for eliminating tariffs in recognition of the country’s status as a newer ASEAN member having as least developed country status. The Agreement also eliminates non-tariff barriers like licensing requirements; offers procedures on standards and sanitary and phytosanitary (SPS) measures; facilitates communications and shipping services; and guarantees equal treatment to foreign investments. These preferential arrangements offer Laos significant opportunities for accessing the Australian and New Zealand markets in a wide range of products. Although tariff rates are, on average, relatively low for non-AANZFTA countries, they still raise costs. Lao producers and exporters therefore have a competitive cost advantage because Australian and New Zealand importers can buy Lao products without having to pay customs duties on those imports. Australia and New Zealand have conducive environments for doing business. Both rank within the top 10 best countries in general, and they both have above-average rankings for ease of trading across borders. In addition, Australia’s and New Zealand’s logistics environments are highly favorable to trading. Both countries rely heavily on trade with ASEAN countries. The ASEAN region is the largest trading partner of Australia and the fourth largest one for New Zealand. This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources.

China is the second most important export destination of Laos, and export growth to that market has far outpaced exports to Thailand, the leading export destination. One of the major drivers of this growth is the comprehensive ASEAN-China Free Trade Agreement (ACFTA) under which Lao benefits in trade of goods and services and in investment measures. How Lao Producers and Exporters Benefit from ACFTA: - ACFTA’s Trade in Goods Agreement has already eliminated tariffs on 90% of its products imported by China. Tariffs on the remaining 10% of imports, classified as sensitive products, are being reduced at a slower pace. - Without preferential market access, other foreign suppliers to China are subject to an average tariff of over 8%. This high level of protection gives Lao businesses a large competitive advantage over competitors who are not ACFTA members. - For agricultural products, China’s average tariff is 65% for non-ACFTA member countries. Lao businesses therefore have a huge competitive advantage in agricultural exports over countries that are not part of the Agreement. - Laos’ proximity to China makes it easier to transport goods to that country than from other ACFTA member countries, especially with the planned development of transport infrastructure between the two countries. Moreover, China’s logistics environment is relatively favorable to trading. - China is one of the fastest growing markets in Asia. Two-way trade between China and ASEAN increased by nearly 30% in 2011 and is targeted to expand by another 20% by 2015. In the case of the Lao PDR, the trade expansion has been much higher. In the last five years, Lao exports to China have grown by an average of 80% a year and that rapid expansion is expected to continue in the coming years. This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources.

The ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP) offers duty-free treatment on most of Japan’s imports to Lao producers and exporters. This type of preferential treatment has contributed to the rapid rise of Lao exports to that country – nearly 30% a year in the last decade, making Japan one of Lao PDR’s top 10 export destinations. How Lao Producers and Exporters Benefit from AJCEP - As member country of AJCEP, Lao producers and exporters now enjoy duty-free treatment on most of Japan’s imports. - The Agreement also covers rules of origin; sanitary and phytosanitary (SPS) measures; standards, technical regulations and conformity assessment procedures; trade in services, and investments, and economic cooperation in general in a variety of areas. - Although Japan’s average level of protection is about the same as that of the ASEAN countries, its average tariff on agricultural products is nearly 30%. This high level of protection for non-AJCEP countries gives Lao producers and exporters a large competitive advantage over those countries. - Japan ranks among the top 10 countries with the most conducive environment for doing business. In trading across borders it outperforms the average for all other industrialized countries. Japan’s logistics environment is also highly favorable to trading. - Japan is one of the fastest growing markets in Asia. Two-way trade between Japan and ASEAN represents 15% person of Japan’s total trade, and that share is growing. This study covers the operation of the Agreement and its parts related to rules of origin, opportunities of Lao businesses, how to gain access to the market, and useful contacts and resources.

The objective of this study is twofold: First, (a) it evaluates the outcomes and outputs of technical assistance to SEZs in Laos; (b) it assesses the relevance of those results to the objectives of sustainable economic growth and job creation; and (c) it identifies any shortcomings that still need to be addressed. Secondly, for the Seventh National Social and Economic Development Plan’s (7thNSEDP) goal of achieving an inclusive, private sector led growth, it assesses the effectiveness and relevance of the Government’s SEZ program, especially Prime Minister’s ‘Decree on Special Economic Zone and Specific Economic Zone in the Lao PDR’.

This study on resource exports evaluates the potential impact of resource-led export growth on the external sector as a whole and its feed-through effects on the production of domestic goods and the services industries. Of particular importance is the implications of those resource exports on the development of offshoot activities for the mineral and electricity industries, along with the possible broad-based diversification of the economy into high-value export products. To that end, the report explores a broad range of opportunities and offers recommendations both for generating more domestic value added activities and for strengthening linkages between resource-based industries and the wider economy. The recommendations are presented as possible technical assistance initiatives and policy actions that could assist the Lao PDR to achieve high and sustainable broad-based export growth, building on the Government’s current development strategy under the Seventh National Social Economic Development Plan (NSEDP VII).

The study describes the creation four clusters for organic vegetables along the East West Economic Corridor (EWEC) of the Greater Mekong Subregion (GMS). These clusters have three goals: (a) to foster the conversion of conventional agricultural farming to organic production, and thereby enable the generation of high value-added activities; (b) to promote linkages among micro and small scale producers, and thereby improve their competitive position within the value chain; and (c) to spur the development of agricultural activities affecting the majority of the EWEC population either directly or indirectly, and thereby enable the transformation of the EWEC transport and logistics corridor into a full-fledged economic corridor.

The study describes four clusters for organic vegetables along the East West Economic Corridor (EWEC). These clusters have three goals: (a) to foster the conversion of conventional agricultural farming to organic production, and thereby enable the generation of high value-added activities; (b) to promote linkages among micro and small scale producers, and thereby improve their competitive position within the value chain; and (c) to spur the development of agricultural activities affecting the majority of the EWEC population either directly or indirectly, and thereby enable the transformation of the EWEC transport and logistics corridor into a full-fledged economic corridor.

The study examines Indonesia’s export potential and constraints in the EU market for priority sectors, with particular emphasis on export quality infrastructure (EQI). It is part of the first component of the EU-Indonesia Trade Support Programme II (TSP II), which aims to improve coordination and transparency in the process for formulation and implementation of trade policy; and upgrade Indonesia’s EQI to support the country’s access to international markets. Part A of the study covers horizontal or cross-sectoral issues facing the country; Part B covers industry-specific issues for the following industries: fisheries, agri-foods, consumer electronics, furniture and natural cosmetics.

The study bring together in a systematic manner the available information from recent expenditure and consumption surveys for Laos as they relate to the impact of the East West Economic Corridor (EWEC) on different social and economic aspects of households in the Lao province of Savannakhet. The results of the study sustain a number of conclusions in terms of the transformation of the EWEC from a transport to an economic corridor. In the first place, the central districts of Savannakhet have benefited more from the transport infrastructure of the EWEC that the surrounding districts. Nevertheless, the peripheral areas surrounding the Corridor have benefited in a substantial way from improvements in the feeder road system. The second important finding of the study is that infrastructure development has been an effective way of directly impacting on household well-being and indirectly contributing to human endowments of those households by enhancing their consumption of education and health services. However, the results also indicate that infrastructural developments have not been allocated among districts in the province in a way that could have produced a more equitable distribution of their effects on living standards. The implication of this third finding is that infrastructural investment needs to better target low-income rural areas in the peripheral districts. In that way, public investments could help to reduce the growing inequality among districts in Savannakhet, especially if it were to target low-income groups in remote villages.

The study supports Government efforts to introduce reforms to the insurance industry and its negotiations for accession to the World Trade Organization (WTO). It provides a consolidated perspective about insurance services in Laos, with particular reference to the impact of possible Government commitments to liberalizing the insurance industry as part of its WTO accession process. The study builds on a survey of the industry and its regulatory environment to determine the areas that could benefit from liberalization and restructuring. It uses these findings along with the experiences of other Asian countries and best practice recommendations to suggest possible reforms and commitments under the General Agreement on Trade in Services (GATS) of the WTO. The implications of liberalization for the insurance industry are then considered and reforms supporting the Government’s overall economic plan are propose.