Ministry aims to build on jump in trade facilitation via Laos

Ministry aims to build on jump in trade facilitation via Laos

A truck prepares to unload cargo containers at Thanaleng Dry Port in Vientiane, Laos.
A truck prepares to unload cargo containers at Thanaleng Dry Port in Vientiane, Laos.

The Commerce Ministry has pledged to explore opportunities to expand the market for Thai products in Laos, leveraging the benefits offered by existing free-trade agreements (FTAs), after it found Thai entrepreneurs have shown a growing interest in exporting fruit to China via the China-Laos railway route.

According to Auramon Supthaweethum, director-general of the Trade Negotiations Department, exports of tropical fruit from Thailand to China have continuously increased following the opening of the China-Laos railway service in December 2021. This railway connection has facilitated smooth exports from Thailand and significantly reduced transportation time. Additionally, refrigerator cargo ensures that the fruit stays fresh and undamaged during transportation. This is expected to encourage Thai entrepreneurs to utilise this route even more in the future, she said.

According to Mrs Auramon, the China-Laos railway has considerably shortened the transportation time for Thai goods from Nong Khai, Thailand, passing through Laos, to Kunming, China, taking less than 15 hours compared to the previous two-day journey via the R3A route.

Mrs Auramon said that following discussions with the operator of Thanaleng Dry Port in Vientiane, Laos, on July 7 and an on-site visit to Thanaleng Dry Port and the Vientiane South Railway Station, it was found that the value of exports from Thailand along this route increased to 1.96 billion baht in 2022, a surge of 2,073% from the previous year.

During the first five months of this year, export values reached 2.84 billion baht, up by roughly 261% year-on-year.

Of this total, 72% or 2.07 billion baht was attributed to the export of fresh durian, marking an impressive growth of roughly 365% compared to the same period in 2022. As for other products, such as instant noodles, glutinous rice snacks, rubber, plastics, and electronics, they also saw significant export numbers.

Moreover, other fresh fruit from Thailand is also gaining popularity in China. For instance, the value of mango exports in the first five months increased by 218%, pineapples by 84%, longans by 8.82% and mangosteens by 4.18%. This trend indicates a growing demand for Thai fruit, providing an opportunity for farmers and exporters to further explore the markets for other fruit bound for China.

In addition to the China-Laos railway advantage, according to Mrs Auramon, Thailand is benefitting from the Asean-China Free Trade Agreement and the Regional Comprehensive Economic Partnership (RCEP). With China waiving taxes on Thai fruit imports, Thailand utilised the Asean-China FTA's privileges to export fresh durian worth US$2.02 billion and the RCEP's benefits to export durians worth $7.5 million for the period from January to April this year.

Sakhone Philangam, managing director of Thanaleng Dry Port, said Thailand is increasingly utilising the China-Laos railway route to export Thai products. From January to July of this year, there were 2,126 containers of Thai goods transported through Laos and onwards to China, while 2,072 containers of Chinese products were transferred through Laos and on to Thailand.

The most commonly transported fruit is durian, longans, coconuts and pomelos.

However, there is a challenge in the railway's section from Thailand to the Vientiane South Railway Station, as there is no connectivity to the transfer points while the rail tracks are different sizes. As a result, freight containers require a connecting locomotive to link with the China-Laos railway. If Thailand establishes a station allowing for smoother cargo transfer, it would significantly enhance convenience and efficiency, said Mr Sakhone.

Thanaleng Dry Port in Vientiane is located just across the 1st Friendship Bridge from Nongkhai in Thailand, and was conceived to serve as a cargo terminal and international border checkpoint for international commercial conveyance to accommodate maximum import-export and transit cargo for Vientiane.

The dry port, which is the first phase of the Vientiane Logistics Park project, commenced in 2021 and was completed within 11 months. This phase focused on establishing essential hard infrastructure. Notably, it involved the creation of a bonded access road connecting the first friendship bridge to Thanaleng Dry Port, the construction of the main gate building housing border posts, and the setup of dry port gate facilities, including a weighing scale, container yard, and temporary parking for tractor swap operations.

Thanaleng Dry Port is currently undergoing significant investment to develop logistics routes and create integrated park facilities. The ultimate goal is to transform Laos from a landlocked country to a land-linked one.

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