WASHINGTON — The U.S. and Laos signed a Trade and Investment Framework Agreement on Tuesday, launching a formal dialogue that could eventually pave the way for the two countries to work toward a more comprehensive trade arrangement.

U.S. Trade Representative Michael Froman and Laos Minister of Industry and Commerce Khemmani Pholsena signed the TIFA in San Francisco on Thursday.

The agreement will establish a forum for the two countries to engage on bilateral trade and investment issues, including intellectual property rights, labor and environmental issues and capacity building.

“Today’s agreement provides a vehicle for strengthening U.S.-Lao trade and investment relations,” Froman said. “It reflects President Obama’s commitment to ASEAN [the Association of Southeast Asian Nations] and it will promote increased economic opportunities between us.”

Laos is a small supplier of textiles and apparel to the U.S. Combined imports from Laos were $9.1 million last year and its share of the U.S. import market in those categories is just .01 percent.

However, the country is nestled between Vietnam and Thailand, two big suppliers of apparel to the U.S. Vietnam is also a partner in the 12-nation Trans-Pacific Partnership trade deal.

Trade ministers reached an agreement on TPP, which includes the U.S., Australia, Japan, Mexico, Canada, Vietnam, Malaysia, Peru, Singapore, Chile, Brunei and New Zealand, in October. Officials from all the countries in early February signed the trade deal, which aims to remove barriers to trade and would encompass 40 percent of the world’s gross domestic product if enacted. In the U.S., President Obama is facing a tough battle for congressional ratification in an election year.

While Laos is not a partner to TPP, it could potentially benefit from the TIFA and an anticipated boost in business in Vietnam down the road. According to USTR, two-way goods trade between the U.S. and Laos grew five-fold in the past 10 years to $70 million. Two-way agricultural trade increased eight-fold in the same period to $8 million.

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