Lao People's Democratic Republic
As a least-developed country (LDC), Laos is a beneficiary of the EU's "Everything but Arms" (EBA) arrangement. The World Bank classifies Laos as a lower middle-income economy with a per-capita income of $2,067 in 2023. Total EU imports from Laos amounted to about €406 million in 2023, and preferential imports to €299 million.
What is the EBA?
The EBA arrangement covers all LDCs as classified by the United Nations. This arrangement enables duty-free and quota-free access for all products originating in LDCs except for arms and ammunition. Unlike beneficiaries of the Standard GSP and GSP+, LDCs are not excluded from the scheme if they benefit from other preferential arrangements or agreements with the EU.
At a glance: EU preferential imports from EBA beneficiary countries (2023, € million)
7.7M (2023)
Population
Communist State
Government
3.7% (2023)
GDP Growth
31.2% (2023)
Inflation
$ 15.8B (2023)
GDP
Facts about Laos' economy
Landlocked Economy
Lao PDR is a Southeast Asian, landlocked economy which is for the most part covered by mountains and forests. The country’s most important waterway is the Mekong river, which is also a significant source of the country’s hydropower.
Export Products
Lao PDR's top export products are electrical energy, fertilisers, gold, and copper and iron ore. Other export products include rubber, paper, vegetables, electrical machinery and equipment.
Trade Partners
Lao PDR is highly dependent on two regional partners - neighbouring Thailand and China, which together account for about three quarters of overall trade. Both countries are at the same time the most important export market as well as source of imports.
Economic Structure
Rice cultivation remains an important pillar of Lao's economy and the agricultural sector as whole employs about 70% of the workforce and contributes about 17% to the national income. Additionally, natural resources are of high importance. Lao PDR possesses mineral resources like tin, gypsum, gold, granite, and limestone. Next to the mining sector, energy production, mainly focussing on hydro energy, is another important area of industrial activity. Other industries include food processing, sawmilling, production of building materials as well as the quickly growing garment sector.
Usage of EBA Preferences
74% of total EU imports from Lao PDR made use of EBA preferences in 2023. The preference utilisation rate, which represents the ratio of preferential imports to GSP eligible imports, was 92%.
Trade with the EU
Total trade with the EU summed up to €536 million in 2023. With a share of 3%, the EU is Lao PDR's fourth most important trading partner.
Laos and the EU
Imports from Laos by product section (2023, € million)
Imports from Laos over time (€ million)
LAOS AND THE EU GSP
Economic Impact
80%
A large majority of Laos' exports to the EU were eligible for EBA preferences in 2023.
92%
Lao PDR's preference utilisation rate in 2023.
94%
Share of zero-duty imports from Lao PDR.
Preference utilisation and export diversification
EU imports from Lao PDR (€ million)
Preference utilisation (%) vs. total eligible imports (in € million)
Most of the EU's imports from Lao PDR are eligible for EBA preferences, and the value of eligible imports strongly increased since 2018. Lao PDR is also among the beneficiaries taking the most advantage of their preferential access to the EU market under the GSP. Since 2014, Lao PDR's preference utilisation rate stood consistently above 90%. All the major export categories - led by apparel, footwear, and food preparations - have utilisation rates above 90%.
The largest product sections under EBA (€ million, 2023)
The graph indicates that despite a variety of products are being imported from Laos, the export sectors remain heavily concentrated on apparel and garments. This sector accounts for 60% of total EU exports and 73% of exports under the EBA. Footwear exports rank second, followed by cereals and grains, fruits, nuts and vegetables, and plastic products.
SUSTAINABLE DEVELOPMENT
As a beneficiary of the EBA scheme, Laos' preferential access to the EU market is not conditional on the ratification of international conventions. Nonetheless, Laos has ratified all 7 fundamental UN human rights conventions and 5 out of 8 ILO conventions on the protection of labour standards. Laos shows strong commitment regarding environmental protection and has ratified 8 conventions in that area. Moreover, Laos has also ratified 4 conventions on good governance addressing inter alia drug trafficking and corruption.
Core international conventions on human rights and labour standards
Ratified
- Convention on the Prevention and Punishment of the Crime of Genocide (1948)
- International Convention on the Elimination of All Forms of Racial Discrimination (1969)
- International Covenant on Civil and Political Rights (1976)
- International Covenant on Economic Social and Cultural Rights (1976)
- Convention on the Elimination of All Forms of Discrimination Against Women (1981)
- Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
- Convention on the Rights of the Child (1990)
- Convention concerning Forced or Compulsory Labour, No 29 (1930)
- Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
- Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
- Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
- Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)
Additional Conventions
- Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
- Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
- Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
- Convention on Biological Diversity (1992)
- The United Nations Framework Convention on Climate Change (1992)
- Cartagena Protocol on Biosafety (2000)
- Stockholm Convention on persistent Organic Pollutants (2001)
- Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
- United Nations Single Convention on Narcotic Drugs (1961)
- United Nations Convention on Psychotropic Substances (1971)
- United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
- United Nations Convention against Corruption (2004)
EU-Lao PDR Bilateral Development Cooperation
DG INTPA
Access all info about EU-Lao People's Democratic Republic relations on the International Partnerships website.