Cross-border Trade Outlook in the GMS                          Mekong Institute, January 2009                             ...
encouraged businesses to pay through banking services, thus reducing risks and disputes incross-border trade.Yunnan’s key ...
Aranyaprathet district also hosts a large second-hand garment wholesale market so calledRong Kluer market. The rest 13 % o...
After opening up of border trade in 1998, China provided the main source of supply, andChinese products e.g. textiles (mos...
electricity in Thailand. As a result, the average annual cross- border import growth inrecent decade was at 99 % which reg...
materials, heavy machines and medical equipments from Thailand for driving the growingdomestic economy. It is likely that ...
transit form between Thailand and China was at 42 %. And the average cross-border tradeexport values were higher than its ...
Furthermore, the trend of cross-border trade import through transit form from China toThailand continues to grow rapidly.T...
effects is well underway. Informal trade accounted for 20-30 % of total border       trade.   •   Formal flows: In terms o...
•   Promotion of cross-border trade for SMEs and Community-based enterprises in the       GMS4.2 Research supportThe resea...
ReferencesLeung.S, Thanh.V, Viseth.K, 2005, Working Papers on Integration and transition-Vietnam, Cambodia and Lao PDR, As...
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Transcript of "Cross- Border Trade Outlook in the Greater Mekong Sub-region (GMS)"

  1. 1. Cross-border Trade Outlook in the GMS Mekong Institute, January 2009 by Choen Krainara ********************************1. Bilateral cross-border trade relations in the GMSThe bilateral cross-border trade in the GMS is bilaterally transacted as follows:1.1 China and Lao PDRThe bilateral cross-border trade in the GMS is bilaterally transacted as follows:Two Northern provinces of Lao connect with China. These are Oudomxay and LuangNamtha. The key border checkpoints are traditional one of Mewchai in Oudomxayprovince and Nateui, Pangtong in Luang Namtha province (have 5 border checkpoints intotal). Both of these link with Mang district in Yunnan province of China. The trend ofcross-border trade is increasing. • Oudomxay province: Export destinations include China, Thailand and Vietnam. In FY 2003-2004, total export were approximately 1.9 million USD while imports were at 2.8 million USD. 97 % of import is from China. 60 % of the imports- construction materials, machinery and household goods-are for local consumption. There has been a change of pattern of exports from timber to agricultural products especially maize, and NTFPs. Lao has established Boten Border Trade Zone at Lao-Chinese border at Boten village to Nateui junction. • Luang Namtha province: The province has contributed to the significant growth in trade with neighbouring countries. Between 2001 and 2005, export grew at an average of 28 % and import by 8 %. The major exports are 43 % minerals, 30 % agricultural produces, including livestock and 13 % non timber forest products (NTFPs). 90 % of agricultural products exported to China and 80 % of minerals and NTFPs are exported to Thailand. Major imports are clothes and consumer goods from, vehicles and spare parts, agricultural tools and food both from China and Thailand. The province also encourages rapid growth of transit trade.1.2 China and VietnamMoung Caui Gate in Quaung Ninh province of Vietnam and Dongxing town of Guangxiprovince of China are the most important cross-border gateways. Cross-border trade whichhas been posing problems for the authorities for years due to the long border, is nowgradually being put in order. In addition, official trading channels have been increasing,adding more kinds of goods that previously were only traded in small volumes. A morepayment mechanism at the branches of the two countries’s banks in the border area has 1
  2. 2. encouraged businesses to pay through banking services, thus reducing risks and disputes incross-border trade.Yunnan’s key exports are electro-mechanical products, telecommunications equipment andchemicals, while Vietnam mainly exports agro-forestry-aquatic products and minerals.Vitnam has established Moc Cai border economic zone linking with China and has plannedto add more 27 border economic zones in 17 provinces across the country.1.3 Lao PDR and VietnamBoth countries have agreed to promote trade in their border areas in order to contribute tomeet their target of 1 billion USD in two-way trade turnover y 2010. The key measures toreach this goal are to remove obstacle to policies, simplify commercial procedures atborder gates, improve infrastructure at border areas, and facilitate cross-border trade andactivities.1.4 Cambodia and Lao PDRThere is unavailable of cross-border trade data/information of both countries particularlyvia the internet.1.5 Cambodia and VietnamTrade between Cambodia and Vietnam reached 1.7 billion USD in the first eight months of2008. To ease the burden of cross-border trade both countries have signed a new tradefacilitation agreement. Cambodia exported about 250 million USD in goods to Vietnam in2007 equal to 30 % of total exports. The main exports were cashews, rice and tobacco.Cambodia imports construction materials and agricultural products from Vietnam. The twocountries aim to increase two-way trade turnover by 27 % every year to reach 2.3 billionUSD in 2010 and 6.5 billion in 2015.Vietnamese authorities recently allowed Cambodians duty free access to 40 types ofagricultural products. The two governments have also arranged to create seven specialeconomic zones along the border and about 20 border crossings in order to facilitate tradebetween these two countries,1.6 Cambodia and ThailandDuring 1996-2007, the average annual cross-border trade export from Thailand was higherthan its import from Cambodia for 2.40 times. In 2007, the share of aggregate cross-bordertrade values between Thailand and Cambodia accounted for 8.43 % of aggregate cross-border trade values between Thailand and five-neighbouring countries includingCambodia, Lao PDR, Malaysia, Myanmar, and Yunnan province of Southern China.The aggregate cross-border export to Cambodia increased substantially from 1.260 billionsBaht in 1996 to 32.203 billions Baht in 2007. In recent decade, the average annual cross-border export growth was at 42.81 %, which is regarded at soaring rate. In 2007,Aranyaprathet border checkpoint was the most important gateway linking with Cambodia,which was responsible for as high about half of total cross-border trade export values,followed by Klongyai at 36% and Chantaburi border check points at 4 %, respectively. 2
  3. 3. Aranyaprathet district also hosts a large second-hand garment wholesale market so calledRong Kluer market. The rest 13 % of cross-border export values represented by fourremaining border checkpoints, which provide channels for border retail trade of consumergoods among local peoples residing along border areas of both countries. The key exportproducts from Thailand are Motorcycles, Cement, Engines, Livestock feed, Motorcycleparts, Motorcycle parts etc.It can be articulated that Cambodia is currently under reconstruction period after endinglong domestic conflict. So they may need to construct physical infrastructure e.g. road as,urban development, etc. Motorcycles associated with its engines and parts are alsoimportant vehicles for daily mobility both in rural and urban areas in Cambodia. Inaddition, Cambodian market also demands various intermediate products from Thailande.g. raw material for textile industry, animal feeds, agricultural machines, chemicalfertilizers, as well as consumer goods. Therefore, there is vast potential for Thaimanufacturers to expand marketing and sales in response to these increasing needs.The total cross-border trade import from Cambodia somewhat fluctuated from 1.034billions Baht in 1996 to 1.646 billions Baht in 2007. In recent decade, the average annualcross-border import growth was at 20 %, which is regarded at moderate and reasonablerate. But it is questionable in terms of such value of trade that should have been higher thanthe stated value. This may result from limited diversification of Cambodian economy aswell as having rather low level of industrial development or perhaps in an initial stage ofindustrialization. In 2007, Aranyaprathet border checkpoint was the most importantgateway linking with Cambodia, which was responsible for as high at 67 % of total cross-border import values, followed by Chantaburi at 22 % and Klongyai border check points at7 %, respectively. The rest 4 % stood for four remaining border checkpoints, whichprovide channels for border retail trades of consumer goods.The major import products from Cambodia are Remnant of iron, Second-hand clothes,Remnant of aluminum, Corn for livestock feed, Soybean grain, Ready made clothes andtapioca, etc. It can be inferred that Cambodia is specialized in arranging various types ofmetal scrap and papers. Agricultural produces e.g. corn for livestock and soybean grainalso earns foreign exchange to Cambodia. It can be construed that these products might bepartly resulted from the Contract Farming initiative along Thai-Cambodian border.Aranyaprathet district alone also imports second-hand garment to sell at its borderwholesale market. Moreover, this market plays crucial role in importing ready madeclothing products as well as further distributing either on wholesale or retail basis togarment clusters in Bangkok e.g. Bo Bae and Pratunam and other regions in Thailand. Thismeans there is in place of strong cross-border supply chain linkages for garment productsand marketing between Cambodia and strategic garment clusters/markets in Thailand.1.7 Myanmar and ChinaChina is an important but unbalanced trading partner. China occupied an importantposition in Myanmar external trade. Border trade with China is the main artery of theMyanmar economy. Trade between Myanmar and China is heavily dependent on cross-border trade. There are 3 key border checkpoints namely Muse, Lwejel and Laiza connectwith Kunming. 3
  4. 4. After opening up of border trade in 1998, China provided the main source of supply, andChinese products e.g. textiles (mostly yarn and fabrics) poured into emerging consumer-goods markets in Myanmar. In addition, it included road vehicles, power generators,electrical machinery and apparatus and manufactures of metal. Myanmar exports cork ofwood, vegetables and fruit, metaliferous ores and metal scrap, crude fertilizers and crudematerials, non-metallic mineral manufactures, fishes, crude animal and vegetablematerials, oil seeds, crude rubber, cork and wood manufactures.Border trade made up about 50 % of China exports to Myanmar and about 70 % of itsimports from Myanmar during 2000-2007. Yunnan’s province share of Myanmar totalborder trade was 73 % in FY year 2003/2004. The cross-border trade trend is ratherfluctuating.1.8 Thailand and MyanmarDuring 1996-2007, Thailand faced deficit balance of cross-border trade with Myanmar. Asa result, the aggregate cross-border import was higher than the aggregate cross-borderexport at three times. In 2007, the aggregate border trade values between Thailand andMyanmar accounted for 24.5 % of aggregate border trade values of Thailand with five-neighbouring countries.The aggregate cross-border export to Myanmar gradually increased from 2.625 billionsBaht in 1996 to 21.253 billions Baht in 2007. In recent decade, the average annual cross-border export growth was at 32 %, which regarded at evident rate. In 2007, Maesod bordercheckpoint was the most important entry-exit point located at the west-end of Thailand’ssection of the East West Economic Corridor, which was responsible for as high about halfof total cross-border export values with Myanmar. Then it followed by border checkpointsof Ranong in the Southern region at 26 %, Maesai at 12 % and Chiangsaen at 7%,respectively. Maesod, Ranong and Masai are leading border cities, which are popularcross-border shopping destinations either on retail or wholesale segments for neighbouringMyanmar’s populations. The rest 3 % went to three remaining border checkpoints, whichmainly provide channels for border retail trade of consumer goods among local peopleincluding the rural poor residing along both sides of border areas. The main exportproducts are Gourmet powder, Diesel oil, Vegetable oil, Motorcycles, Woven cloth withvarious colors, Lead Acid, Benzene oil, Fishing net, etc.It can be interpreted that Myanmar relies significantly on Thailand for importing consumergoods ranging from food-related products, vegetable oil, milk, clothes, medical products,etc. This might be resulted from limited economic and industrial diversifications anddistribution in their domestic market. Ranges of fuel, motorcycles, and machinery parts arealso in vast demands. Myanmar still needs basic fishing gear e.g. fishing net for harvestingrange of fishes in their large coastal sea. Maesod city becomes a key distribution center ofThailand into Myanmar market. In the near future, there is huge prospect for Thailand tofurther conduct transit trade with India and other South Asian markets when the main roadlinking Myanmar and India is improved. Therefore, the trend of cross-border exportthrough Maesod city is absolutely promising.The aggregate cross-border import values from Myanmar during 1996-1999 steadilyincreased. Later it sharply surged from 5.849 billions Baht in 1996 to 76.114 billions Bahtin 2007 mainly resulting from large amount importation of natural gas used for generating 4
  5. 5. electricity in Thailand. As a result, the average annual cross- border import growth inrecent decade was at 99 % which regarded at particularly distinct rate. In 2007,Sangklaburi temporary border checkpoint alone was, in contrast with Maesod as majorexport gateway, the most important gateway for largely importing natural gas atexceptionally high at 94.65 % of total cross-border import values, Ranong border checkpoint ran second at 2.1 %, followed by Maesod at 1.29 %, and Maesai at 0.4 %,respectively. The rest 1.56 % consisting of three border checkpoints provides sites forborder retail trade mainly for consumer goods to rural people along both sides of borderareas. Consequently, different geographical settings influence varying importance of keyentry/exits of border checkpoints particularly connecting with Myanmar. The tendency ofcross-border import continues to increase. The major import products from Myanmar areWood works, Crab, Mixed fish, Live cow and buffalo, Cashew nut, Mixed prawn shell,Dried fish maw, Black matpe beans, Prawn, etc. Thailand’s share of Myanmar total bordertrade was 14 % in FY year 2003/2004.It can be rationalized that Myanmar is still affluent of forest resources particularly forwood-related products and bamboo, which are scarce and high demand for houseconstruction and decoration in Thailand. As a result, it becomes dominant exportcommodities to Thailand in addition to natural gas. Aquatic products e.g. prawn, crab, seafishes were other major importing commodities. So they provide raw materials forprocessing various types of foods in Thailand. A great number of live animals especiallycow and buffalo were imported as beef cattle as well as utilizing its muscle energy infarming activities. Black Matpe beans possibly resulted from the Contract FarmingInitiative between Thailand and Myanmar also plays essential import values, which canhelp generate jobs for rural people residing along Thailand-Myanmar border areas.1.9 Thailand and Lao PDRDuring 1996-2007, Thailand gained favorable balance of cross-border trade, and theaggregate cross-border export was higher than the aggregate cross-border import at 1.1times. In 2007, the aggregate cross-border trade values between Thailand and Lao PDRaccounted for 11.75 % of aggregate cross-border trade values of Thailand with five-neighbouring countries.The aggregate cross-border export to Lao PDR gradually increased from 5.190 billionsBaht in 1996 to 38.970 billions Baht in 2007. In recent decade, the average annual cross-border export growth was at 21 %, which regarded at obvious rate. In 2007, Nongkhaiborder checkpoint was the most important gateway linking with Lao PDR, which wasresponsible for as high about half of total cross-border export values, followed by bordercheckpoints of Mukdahan at 14 % and Bungkarn and Piboonmangsaharn each at 9 % andNakhonpanom at 7%, respectively. Also, Nongkhai city is a popular cross-border shoppingdestination either on retail or wholesale segments for neighbouring Vientiane’s populationsof Lao PDR by just travelling through Mekong bridge. The rest 5.85 % belonged to tworemaining border checkpoints, which provide channels for border retail trade of consumergoods among local peoples residing along both sides of border areas including the ruralpoor. The major export products from Thailand are Oil products, Cars, Pellet cement,Woven fabrics, Knitted fabrics Knitted fabrics, Medical equipments, and Digger, etc.It can be articulated that Lao PDR is currently in the stage of rapid economic growth due tothey vastly need intermediate and capital goods e.g. oils, automobiles, construction 5
  6. 6. materials, heavy machines and medical equipments from Thailand for driving the growingdomestic economy. It is likely that Lao PDR is urbanizing indicating by a large amount ofhome decoration materials are in great demand. In addition, such requirements of rawmaterials for industrial development are pronounced. Cross-border exports from Thailandapproximately serve half of Lao PDR’s national populations who are mostly residing alongThai-Lao border areas. In this regard, there are still more rooms to deepen marketingactivities for Thai products in capturing the increasing varied needs. Thus, cross-bordertrade plays even more vital role in penetrating Thai products to their market as well aswidening Laotians’ rural poor to gain greater access to consumer products.The aggregate cross-border import from Lao PDR went up from 1.730 billions Baht in1996 to 7.778 billions Baht in 2007. In recent decade, the average annual cross-borderimport growth was at 19 %, which regarded at reasonable rate if compared with their smallsize of five million populations. In 2007, Mukdahan border checkpoint was, in contrastwith Nongkhai as major export gateway, the most important gateway which wasresponsible for as high at 55 % of total cross-border import values, Nong Khai bordercheck point came second at 14 %, followed by Thalee at 9 %, Chiankhong at 8 %, andPiboonmangsaharn at 6 %, respectively. The rest belonged to two remaining bordercheckpoints of Chiangsaen and Bunkarn, which provide channels for border retail trade ofdaily consumption products. It is remarkable that there is a diversion on exporting andimporting roles among key border checkpoints. This signifies that import products fromLao PDR may be originating from diverse cities/locations. Among others, Mukdahan playsincreasing importance as another key border entry point on the East-end of Thailand’ssection along the East West Economic Corridor. The major import products are Processedwood, Ignition wiring sets used in vehicles, Parquet, Live wire, Resistor Resistor,Underwear for men and boys, Zinc ore, Uniforms etc.It can be inferred that Lao PDR is yet abundant with various types of woods and woods-related products, which are scarce and high demand for house construction and decorationin Thailand. As a result, it became dominant export commodities to Thailand. Thailandalso imports a great amount of intermediate industrial inputse.g. ignition wiring sets used in vehicles, live wire and resistor. Lao PDR is becomingspecialized exporter in textile/garment industry due to low labor cost of production as wellas receiving Normal Trade Relations (NTR) to access the US market as well as beinggranted Generalized System of Preferences (GSP) from major countries e.g. EU, Japanand Canada (Kasikorn Research Center, 2006). Textile products were likewise majorcommodities penetrating into Thai market. As a result of their specialization, there weresome cross-border outsourcing activities in making uniform clothes from Thailand to LaoPDR to some extent demonstrating cross-border supply chain linkages in this industry. Inaddition, Zinc ore was another essential imported mineral resource as it is still rich in LaoPDR.1.10 Thailand and Yunnan province of Southern ChinaThailand does not share common border with China. Cross-border trade is performed onthe basis of transit arrangement mainly facilitated to/from nation-wide key bordercheckpoints. In 2007, the aggregate cross-border trade values through transit meansbetween Thailand and China were at 39.580 billions Baht accounted for 9.86 % ofaggregate cross-border trade values of Thailand with five-neighbouring countries. During1996-2007, the average annual growth of aggregate cross-border trade values through 6
  7. 7. transit form between Thailand and China was at 42 %. And the average cross-border tradeexport values were higher than its import values for 1.13 times.The aggregate cross-border trade export through transit mode from Thailand to Yunnanprovince of Southern part of China rose steadily from 1.413 billions Baht in 1996 toamounting at 36.872 billions Baht in 2007. In recent decade, the average annual growth ofcross-border trade export through transit form from Thailand to Yunnan province of Chinawas as high at 50 %. In 2007, Padang Besar border checkpoint, located in Southern region,was the most important gateway for facilitating transit goods operated by rail routingBangkok-Hat Yai-Padang Besar (Thailand)–Penang (Malaysia) toward Chinesedestinations, which was responsible for as high at 69 % of total cross-border trade exportvalues, followed by Chiangsaen at 13% or 4.619 billions Baht, carried goods by vesselscruise upstream of Mekong river directly to Yunnan province of Southern China takentravel time as long at three days (www.chiangmainews.co.th), Sadao in Songkhla provinceat 4 %, Prachuap Khiri Khan at 2.4 %, and Betong in Yala province at 0.4 %, respectively.The rest of cross-border trade exports to China were conducted customs formalities in bothNorthern region at Maesai, Chiangkhong, and Northeastern region at Nongkhai andMukdahan border checkpoints, respectively.It is notable that cross-border trade exports to China handled by many border checkpointsin diverse regions depending on location of productions/origins and final destinations. Ifthere are high volumes, it will be exported through Padang Besar and Sadao bordercheckpoints. For specific Yunnan province destination of Southern China, there wasincreasingly transported through Chiangsaen by river vessels and by land transport throughother border checkpoints in the Northern and Northeastern regions of Thailand. For thisreason, it is so far rather complex undertaking of logistics services for reaching SouthernChinese markets. Nevertheless, such difficulty will soon be overcome when the ongoingroad links between Chiang Rai province and Kunming city of Yunnan province so calledthe construction of R3 West (through Myanmar) and R3 East (through Lao PDR) routesare to be materialized in the next few years. The trend of cross-border trade exportvolumes through transit form to China particularly through Chiangsaen still tends toprogressively increase. The major export products from Thailand to Yunnan province ofChina are Rubber smoked sheets, Dried longan, Palm oil, Elastic thread, Crepe sheets,Vegetable oil, Gourmet powder, Block rubber etc.The aggregate cross-border trade import through transit arrangement from China toThailand went up steadily from amounting 0.137 billion Baht in 1996 to 2.708 billionsBaht in 2007. In recent decade, the average annual growth of cross-border trade importthrough transit arrangement from China to Thailand was as high at 43.60 %. In 2007,Padang Besar was still the key entry point for importing transit goods from China throughMalaysia, which was accountable for as high at 42 % of total cross-border trade importvalues, followed by Chiangsaen at 32 %, carried goods by vessels cruise downstream ofMekong river directly from Yunnan province of Southern China taken travel time for oneday (www.chiangmainews.co.th), Mukdahan at 21 % and Chiangkhong at 3 %,respectively. The rest of cross-border trade imports were conducted customs formalities atMaesai and Nongkhai border checkpoints. It can be observed that border checkpoints ofChiangsaen in the Northern region and Mukdahan in Northeastern region have beenperforming increasing role in expanding trade relations between Thailand and Yunnanprovince of Southern China due to greater cross-border physical connectivity in the GMS. 7
  8. 8. Furthermore, the trend of cross-border trade import through transit form from China toThailand continues to grow rapidly.The major import products from Yunnan province of China are Fresh vegetables, Apple,Chinese pear, Pomegranate, Garlic, Processed woods, Sunflower seed, Multiplier Onionetc. It implied that most of import agricultural commodities were mainly in line with thealready in effect of both Thailand-China Free Trade Agreement and under the ASEAN-China Free Trade agreement. These led by fresh vegetables, winter fruits e.g. apple,Chinese pear, pomegranate. In addition, other agricultural produces e.g. garlic, sunflowerseed, multiplier onion and white pumpkin seeds play important role among major importcommodities. Apart from this, it included quite significant amount of processed woods andintermediate industrial product e.g. hydrocarbon ferromanganese. In the near future, thetendency of importation of winter fruits originating from Yunnan province is likely to risefollowing the implementation of the above mentioned free trade agreements, coupled withmore efficient cross-border logistics provisions and management between Northern regionof Thailand and Yunnan province of Southern region of China.1.11 Lao PDR and MyanmarLuang Namtha province links with Myanmar. Siengkok border checkpoint acts as a majorchannel for transit trade with Thailand.2. Common observation on the trend of cross-border trade inthe GMSThe trend of cross-border trade in GMS is increasing. But there is an asymmetry of cross-borer trade balance. Bigger countries e.g. Thailand, China and Vietnam tend to gain greatlyfavorable trade balance leaving significant trade gaps to other GMS partner countries.Agricultural trade originating from Lao PDR, Cambodia and Myanmar in particular playsheavily important role in their economies. These countries export approximately 50-60 %of agricultural products to other GMS countries. While the rest of GMS countries exportabout 20-30 % of their agricultural products to Cambodia, Lao PDR and Myanmar. Sothere is increasing degree of regional integration through agricultural trade. In terms ofwelfare impact, the general experience across all countries seems very positive, althoughsome countries or border communities have clearly benefited much more than others. Socross-border trade can significantly contribute to poverty reduction in the GMS. Andborder economic zones are widely taken up to promote cross-border trade in the GMS.There are 2 types of cross-border trade as follows: • Informal flows: These involve many small or petty traders using small amounts of capital and dealing in low volume usually low value products for sale in the local market with in the border zone. The informal sector has strong implications for anti-poverty policy and distribution of gains from trade. It can be huge, generating work and income for myriads of small traders, processors, artisans, transport workers and so on. Generally, Cambodian and Lao border trader remain overwhelmingly informal and small-trader dominated. The experience on the Vietnamese, and particularly on the Thai border, suggest that the crowding out 8
  9. 9. effects is well underway. Informal trade accounted for 20-30 % of total border trade. • Formal flows: In terms of volume, formal trading channel account for the bulk of cross-border trade, constituting some 70-80 % of the total volume of trade. These flows are formal in the sense of being recorded, requiring paper work, appropriate documentation and processing, i.e. in terms of export-import procedures. Frequently, even these formal flows include an informal component in terms of under-invoicing, tax evasion, and partial payments and partial recoding.3. Common problems on promoting cross-border trade in theGMSThe common problems on promoting cross-border trade in the GMS are as follows: • Statistics on cross-border trade transaction among GMS member countries are hardly available to general public making it is difficult for conducting research on cross-border trade. Thailand is rather well advanced but information available is fragmented. • Complex cross-border trade procedures particularly in Lao PDR, Cambodia and Myanmar • Lack of financial facilities along border areas making it is delayed of cross-border trade • Cross-border business persons/business institutions are quite weak leading to low cross-border trade volume particularly in Cambodia, Lao PDR and Myanmar. • Cambodia has no clear policy on promoting cross-border trade with neighbouring countries. • Direct benefits of cross-border trade appear mainly along major transport corridors and border communities leading to an inequitable gain from Trade • Cross-border trade gaps among member countries in GMS can be widening if member countries do not continually grant trade privileges or tariff reduction to trading partners. • Small farmers/informal sector/community-based enterprises have much potential to gain from trade. But they are weak business capacity/opportunities to integrate into cross-border economy. • Strong cross-border lobbyists at border checkpoints4. Implications to provide training and research supports onboosting cross-border agricultural trade and investment in theGMSImplications to provide training and research supports on cross-border trade in the GMScould be as follows:4.1 TrainingThe courses to be provided are: • Status, trend and cross-border trade polices coordination in the GMS 9
  10. 10. • Promotion of cross-border trade for SMEs and Community-based enterprises in the GMS4.2 Research supportThe research support for undertaking interventions could include the following topics: • Infrastructure: road, water, electricity, well-appointed checkpoints with weighing yards, loading-unloading facilities etc. • Financial system: low cost, safe, fast, formal mechanisms to send and receive payments • Institution: especially relating to market order-contract enforcement, information access, trade associations, clear border procedures, break-up of cartel • Promotion of border tourism: an important source of growth at local level • Human resources to promote cross-border trade • Informal sector protection and promotion: because of the large poverty- reduction potential. • Greater incentives from bigger countries need to provide to the smaller ones: this is to give greater access to neighbouring countries markets. • Border economic zone: further investigation as a promising model of development of the border economies. 10
  11. 11. ReferencesLeung.S, Thanh.V, Viseth.K, 2005, Working Papers on Integration and transition-Vietnam, Cambodia and Lao PDR, Asia Pacific School of Economics and Government,The Australian National UniversityKhontaphane. S, Insisiangmay.S, Nolintha.V, 2006, Impact of Border Trade in LocalLivelihoods, Lao-Chinese Border Trade in Luang Namtha and Oudomxay Provinces,Technical Background Paper for the Third National Human Development Report LaoPDR, VientianeKrainara.C, 2008, Special Study on Cross-Border Trade and Commerce in Thailand:Policy Implications for Establishing Special Border Economic Zones, Asian Institute ofTechnology, BangkokMurshid.K, No year of publication, From Cross Border Trade To Regional Integration?The Cross Border Economies of Cambodia, Laos, Thailand and Vietnam, retrieved fromhttp://www.rockmekong.org/pubs/Year2005/CDRI/FourCountryReport/CDRI_Intro.pdfPaitoonpong.S, 2006, Thailand’s Cross-border Trade in the Greater Mekong Subregion:Some Issues Never Solved, TDRI Quarterly Review, March 2006Internet websiteshttp://english.peopledaily.com.cn/200608/07/eng20060807_290665.htmlhttp://www.atimes.com/atimes/Southeast_Asia/GG21Ae01.htmlhttp://www.asiamedia.ucla.edu/article.asp?parentid=25389http://www.vnagency.com.vn/Home/EN/tabid/119/itemid/156890/Default.aspxhttp://english.vietnamnet.vn/biz/2008/12/817190/http://epress.anu.edu.au/myanmar02/mobile_devices/ch06s03.htmlhttp://www.newsmekong.org/vietnam-cambodia_the_road_to_tradehttp://english.peopledaily.com.cn/200608/07/eng20060807_290665.htmlhttp://english.peopledaily.com.cn/200608/07/eng20060807_290665.htmlhttp://www.rockmekong.org/pubs/Year2005/CDRI/FourCountryReport/CDRI_Intro.pdfhttps://www.mofa.gov.vn/en/nr040807104143/nr040807105039/ns080116101121/view 11

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