Laos, Vietnam Signs Cooperative Agreements HANOI (July 6) XINHUA - Laos and Vietnam signed cooperative agreements on energy, legal assistance and drug control here Monday. The agreements were reached following the talks between visiting Laos Prime Minister Sisavath Keobounphanh and his Vietnamese counterpart, Phan Van Khai. They also discussed the implementation of the agreements. Vietnam's Communist Party leader Le Kha Phieu and President Tran Duc Luong are scheduled to meet Sisavath on Tuesday. The Laos premier arrived here Monday for a week-long official visit. BKK Post / 6 July 1998 CHINA-THAILAND Survey will study road link to Laos Traders say highway will boost business Saritdet Marukatat Nan could become the first land gateway to China following agreement to fund a 10-million-baht survey on a road into Laos, through which the highway would pass. Pornchai Rujiprapa, senior economic adviser of the National Economic and Social Development Board, said the money was allocated two months ago by the cabinet. It would go to the Highways Department which will survey and design the plan to refurbish the 38-kilometre road from the Nan border at Chalerm Phrakiat district to the Mekong River bank in northern Laos. The project is expected to take a year. Nan is less than 300 kms from the Laotian- Chinese border. Nan traders had been campaigning for years for the road. Chucheep Thurakit-seree, adviser to the Nan Chamber of Commerce and an engineer of the campaign, welcomed the move but remained cautious about the possibility of seeing the road refurbished in the near future due to Thailand's budget problems. The Nan road was discussed during a visit last month to Vientiane by Foreign Minister Surin Pitsuwan. The road on the Laos side runs to southern China via Oudomsay and is paved but in poor condition. The aim is to link Thailand and Laos with a new bridge and use ferries until it is built. The Laotian government, according to Mr Chucheep, has improved the condition of its road over about 20 kms. Exports to Laos from Nan amounted to 11 million baht last year, up two million on 1996. Traders believe exports will rocket if the road to southern China is paved all the way. However, the go-ahead for the survey has dimmed hopes for traders in Chiang Rai who are also pushing for another route to China, also through northern Laos. The road from Chiang Rai has been classified by the Asian Development Bank and six countries in the Greater Mekong Sub-region economic cooperation as of top priority. However, the government's patience seems to have run dry because investor, the Economic Quadrangle Joint Development Corp, is struggling to find investors. "The government feels uncertain about its future," an official close to the two projects said. The Laotian government gave the concession to a Chiang Mai-based firm in exchange for the firm collecting tolls. TEXTILES / EUROPEAN UNION RESTORES DUTY-FREE ASSISTANCE Thai firms benefit from trade privileges for Vientiane Laos unable to make own raw materials Saritdet Marukatat Thai manufacturers will directly benefit from the European Union's decision to restore trade privileges for Laotian textiles after three years of disruption. The decision in Brussels last month followed several rounds of talks between the EU and Laos. It ended uncertainty about garment exports to Europe and secured the future of producers, Laotian trade officials close to the issue said. Thai producers stand to benefit most because they partly or wholly own half of the 60 clothing factories in Laos. The Thais were among the first to relocate their plants to Laos to take advantage of low wages and trade privileges offered to Laos by the EU members and other industrialised countries. Laotian and European officials signed an agreement on June 16 restoring the privileges under the EU's Generalised System of Preferences. The agreement, which still needs official approval, effectively ends a dispute over the origin of the goods. Garment exporters in Laos enjoyed the privileges until November 1995 when Brussels ruled that Laotian textiles were not eligible for duty-free entry because the products contained no locally-made raw materials. The suspension forced many investors to withdraw their projects or close factories temporarily because they could not afford to pay the regular duty. But the EU eased the problem by allowing Laos to import fabric from specific countries, including members of the Association of Southeast Asian Nations except Burma, from August last year until the end of this year to produce textiles for export that would be eligible for the trade privileges. The agreement eases worries in Vientiane about the future of its exports after the temporary allowance expires in December. Under the agreement, the EU would treat raw materials from Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam as of Laotian origin on grounds that Laos became an Asean member last year, Michel Caillouet, the Ambassador of the European Commission to Laos, said in Bangkok. The settlement was practical because Laos was not in a position to produce raw materials, he said. As a least- developed country, Laos was guaranteed GSP privileges on other products it exported to the 15 EU members. Laos is a major Asian recipient of EU aid, with a current allocation of US$123 million, mainly for rural development, health care, education and training projects. But a Laotian official said his government would not relax completely until the new pact took effect. "Major obstacles were tackled, but we want to see its entry come into force." The issue arose during discussions in Vientiane late last month on a wide range of EU-Laos cooperation, and both sides affirmed their wish to see the agreement in place soon. A key component called for verification that imported materials used in the textiles originated in the seven Asean members, EU and Laotian officials said. Thailand is a major supplier of fabrics to Laos, mainly Thai-run factories. Other major sources are Taiwan, South Korea and China.