Role, Significance and Trends of Cross-Border Agricultural Trade Tim Purcell
Outline Importance of agriculture and agribusiness in national economy Cross-border agricultural markets in the ASEAN regional single market Cross-border trade in the GMS Significance and proportion of the cross-border agricultural trade and its key commodities promoted Current constraints and key successes on transacting cross-border agricultural trade in the GMS
Objectives To stress the importance of agriculture and agribusiness in national economy; To highlight the cross-border trade patterns and prospects particularly on agricultural trade in the region; To distinguish constraints and key success factors for dealing with cross-border agricultural trade between ACMECS member countries
Importance of Agriculture in the National Economy Of the 316 million people in the GMS, about 80% are in rural areas and depend mainly on subsistence and semi-subsistence agriculture, fishing and forest extraction for their livelihood. Agriculture accounts for 78% of total employment in Lao PDR, 75% in Cambodia, 69% in Vietnam and about 50% in Thailand. Rice remains a critical crop for food security throughout the GMS region.
Importance of Agriculture in National Economy Export Value Base Quantity ($million) Country 2005 2006 2007 Brunei Darussalam 1. 56 1. 334 1. 046 Indonesia 10405. 6 12036 16383 Lao People's Democratic Republic 24. 396 13. 091 68. 058 Malaysia 10126. 8 11388. 1 16416. 8 Philippines 2063. 17 2020 2464. 28 Singapore 2412. 11 2536. 48 2862. 6 Thailand 12332. 3 14707. 7 14584. 2 Viet Nam 3404. 43 3999. 33 4942. 92 2008 2009 2. 008 1. 995 20707. 3 14411. 8 28. 662 20966 2996. 24 3520. 71 19252. 9 7212. 78 20. 049 16278. 7 2631. 63 3414. 6 16071. 2 6244. 05
Importance of Agriculture in National Economy Export Value Base Price ($million) Country Brunei Darussalam Indonesia Lao People's Democratic Republic 2005 1. 073 11206. 3 15. 711 2006 2. 398 2007 3. 242 12627. 3 11400. 1 32. 652 2008 0. 847 2009 0. 796 14394. 5 15667. 8 10. 775 34. 718 59. 811 11514 Malaysia 10858. 3 11567. 1 11085. 8 12347. 2 Philippines 2101. 88 2196. 53 2040. 74 1994. 42 1744. 15 Singapore 2493. 3 2645. 18 2862. 12 2810 2567. 25 Thailand 10692. 4 11097. 9 13390. 6 13548. 5 13658. 4 Viet Nam 3720. 85 3778. 9 4021. 68 3770. 52 3224. 27
Cross-Border Transport Agreement in the GMS Objective is to facilitate cross-border transport of goods and people between and among the contracting parties; to simplify and harmonize legislation, regulations, procedures and requirements and to promote mulimodal transport Core contents of the CBTA cover Transport, Customs, Health and Quarantine, and Immigration Countries are in the process of ratifying the CBTA protocols and aligning their domestic regulatory and legal frameworks
CBTA Key Features A Single-stop/single window customs inspection The cross-border movement of people (i. e. visas for people involved in transport operations Transit traffic regimes, including exemptions from physical customs inspections, bond deposits, escorts, and agriculture and veterinary inspections Requirements that road vehicles will have to meet to be eligible for border crossings The exchange of commercial traffic rights Infrastructure, including road and bridge design standards, road signs and signals
Example of CBTA Progress and Challenges Thailand n n n The transit clearance processes at Sado and Mukdahan borders are different A new ICD is being built at Mukdahan, but Vietnamese and Laotian tracks cannot cross Thailand Transshipment and free domicile cargo cannot be carried on the same truck into Thailand – which leads to increased transportation costs Facilitation fees much be paid at the borders There is no express land for bonded trucks A complete formal clearance is required for cargo being moved by road
Example of CBTA Progress and Challenges Lao PDR n n n n Long-haul trucks are not allowed There is a significant shortage of transshipment equipment at the borders leading to high costs Transshipment and free domicile cargo cannot be carried on the same truck into Lao PDR– which leads to increased transportation costs The long lunches taken by the officials significantly delay transit times There is no express lane for bonded trucks A complete formal clearance is required for cargo being moved by road There is no express clearance for low-value cargo
CBTA Progress and Challenges Many laws still overlapping in defining the roles and mandates of each authority in implementing trade facilitation programs since the concerning departments create subordinate regulations for their own use. Challenges exist in implementing and enforcing the quarantine, sanitary and phyto-sanitary and other associated laws. For example, Cambodia’s custom legislation permits many government agencies to be represented at the border checkpoints with at least 5 present at all times
CBTA Progress and Challenges Overlapping controls on customs operations performed by government agencies unrelated to customs exist, resulting in duplication, inefficient use of resources and ineffective anti-smuggling operations. Multiple agencies involvement further complicate the problems of weak coordination and accountability Officers are not well educated on the CBTA and how to implement it.
CBTA: A Case Study of Cambodia signatory WTO, ASEAN, AFTA and CBTA protocols. With Assistance from IFC have developed comprehensive manual on export procedures with all the procedures, documents and templates for exporting goods from Cambodia through each of the official border crossings.
Cambodian Exports – Procedures versus Reality Export procedures designed for international exports and not for CBTA. While officials are familiar with the Export guidelines, CBTA arrangements are poorly understood. (e. g. requirements for Certificate of Origin, Taxation and tariffs, Registration of formal companies, etc). Written procedures clear, but reality is very untransparent and difficult to follow Significant amounts of unofficial fees levied on exporters (e. g. 120 t boat full of paddy costs $1000 – or $8. 33/t). Container exports $1000$2000/container depending on negotiation
Cambodian Exports – Procedures versus Reality Different ministries are supposed to be responsible for different tasks. However, there are significant overlaps: Sanitary and Phyto-Sanitary n n n SPS Department under GDA/MAFF for plant protection SPS for Animals under DAHP/MAFF or animal protection and all animal feed (eg. Plants) SPS Inquiry office under Mo. C Cambodia Import. Export Inspection an Fraud Repression Department
Cambodian Exports – Procedures versus Reality Intellectual Property Right Protection n Trademarks – Mo. C Patents – MIME Copyrights – Ministry of Culture and Fine Arts Enforcement of Above and general exports: n n n Border Police Military Police Economic Police Customs and Excise CAMControl
Cambodian Exports – an Example of Rice Buyer or representative inspects warehouse and verifies sufficient paddy is on stock to fulfill order (no Letter of Credit is given prior to shipment, so miller must have sufficient own capital). Once milled and bagged, Miller applies to SPS Department of MAFF for SPS certificate. SPS department supposed to inspect sample, test in laboratory for residues
Cambodian Exports – an Example of Rice Once laboratory tests come back, SPS department issues certificate free of charge. However, SPS Department has no laboratory facilities so issues certificate without testing for a fee of $100. Once SPS certificate is issued, Miller must request CAMControl inspection of container loading and customs seal.
Cambodian Exports – an Example of Rice CAMControl inspection only carried out in Phnom Penh, so all exporters must ship loose bags of rice to Phnom Penh and have warehousing facilities for container stuffing. CAMControl inspections are free, but ‘tea money’ must be paid to inspector ($50 per container) Joint inspection by CAMControl and Customs and Excise Department
Cambodian Exports – an Example of Rice Inspectors usually turn up in late afternoon, necessitating a repeat visit, plus accommodation expenses. Once CAMControl and Customs and Excise have supervised the loading of the containers, Fumigation is carried out before sealing container. In parallel to the above, Third Party Inspection services are carried out by buyer’s representative.
Cambodian Exports – an Example of Rice International buyers are aware of the weaknesses in SPS and CAMControl inspections and so demand Third Party Inspections of packing weight, number of bags, bag labelling (EU regulatory requirements), samples taken for residue testing and GMO free status. Samples are shipped to laboratories in HCMC for testing – this will take several weeks.
Cambodian Exports – an Example of Rice The time taken for laboratory testing is important, as by then the shipment has already sailed and will be near, or already have docked at the destination port. So any laboratory rejection of sample means that the whole shipment can be rejected.
Cambodian Exports – an Example of Rice Once SPS and Cam. Control certificates have been issued. Export takes documents to the GSP office in Ministry of Commerce to obtain the Certificate of Origin. CO is most important, even for the informal cross-border trade (SPS and Cam. Control certification for the CBTA is not strictly enforced for informal trade). Statistics on CO are the most accurate data available on exports.
Cambodian Exports – an Example of Rice Once SPS, Cam. Control, CO certificates are obtained, the containers are ready for export. Containerized exports mainly through Sihanoukville port, with Phnom Penh port increasingly being used. However, it is difficult to electronically track the transshipment through Vietnam ports so exporters and buyers prefer Sihanoukville (Letter of Credit reasons mainly).
Cambodian Exports – an Example of Rice Delivery of Containers to port: n n n Bill of Loading Export Tax certificate VAT / Cam. Control certificate (1% VAT, Cam. Control 0. 1% of value of Export). This completes the shipment process Now to get paid!. .
Cambodian Exports – an Example of Rice Take ALL the documents to the Bank to execute letter of credit with Buyer. Bank will check carefully the documents. If they are all in order they will transmit documents to buyers bank for their checking. If everything is in order, then the letter of credit will be executed the money will be transferred, usually within 10 days of submission
Cambodian Exports – an Example of Rice Important to understand that by this stage the shipment should be almost at the buyers destination. So for all practical purposes the Letter of Credit does not provide advance payment as it was originally designed to provide. All it does is provide an insurance against buyer non-payment. Once a business relationship is established most traders move to an open account basis.
Cambodian Exports – an Example of Rice Critical to understand that any mistakes in the documentation means that the Letter of Credit cannot be executed. n n n Spelling mistakes of names of people or companies Different date formats (US – mm/dd/yy; EU – dd/mm/yy; Cambodian: dd//mm/yy) Russian Federation – Vladivostok port has different procedures from St. Petersburg port ANY mistakes, and you start again!
Improving CBTA: A Way Forward Institutional capacity building is urgently needed A comprehensive review and amendment of current policies and legal documents related to trade facilitation The promulgation of guiding documents to help local authorities and the business community comply with trade facilitation regulations Providing public, clear and transparent policies and regulations to the executing agencies and enterprises Negotiating and signing the new Bilateral Agreement to ensure conformity with the CBTA initiative and protocols
Improving CBTA: A Way Forward Free movement of vehicles within the GMS, harmonized vehicle standards, no border transshipments, and harmonized road and vehicle taxation Changes in customs procedures to ensure the smooth and consistent customs clearance, establish ICDs, create express clearance for documents and parcels, allow bonding arrangements for transit to ICDs, build warehouse facilities to off-load and store un-cleared bonded goods, allow 24 hour transit for bonded or ICD transit vehicles, provide longer opening hours of Customs offices and review Customs regulations allowing multi-modal connectivity of sea, air, road and rail
GMS Economic Corridor Case Study Thailand (Nakhon Phanom Province) Laos (Thakek, Khammoun province) Vietnam (Vinh, Thanh Hoa, Hanoi, Lang Son) China (Quangxi)
Thailand (Nakhon Phanom Province) Nakhon Phanom is located in the Northeastern region of Thailand, approximately 456 miles northeast of Bangkok and 235 miles southwest of Hanoi, Vietnam. It borders LAOS on the Khammoun Province or the Tha Khaek district. It is approximately a 5 -hour journey to get into Vietnam from Nakhon Phanom. Major industries generating the most provincial income for Nakhon Phanom province are (1) Tourism; (2) Education and (3) Agriculture.
Agricultural Production The agriculture industry in Nakhon Phanom includes agriculture, forestry, fishery and livestock as well as the planting of rice, cassava, corn, sugarcane and tobacco. Crops that yield high production and marketing support are rice, rubber, pineapple, tomato and vegetables. The crops are cultivated mainly along the Mekong and Songkhram rivers, including Ban Paeng, Ta Uthen, Muang, Srisongkhram and That Phanom District. Rice, tomato and tobacco are in Pla Pak, Nakae, Renunakorn, Nawa and Wangyang districts. The primary agricultural products of the province are rice and rubber.
Cross-Border Trade Most imported products are manufacturing accessories from China Exports: - Agricultural products such as rice and consumable food - Fruits (such as mangosteen, durian, mangoes, etc) exported to China is normally brought from Rachasima, Ladburi, Chathaburi and Trad.
Cross-Border Trade Logistics - Main logistics to facilitate the provincial trade and investment are land water roads. The main land road is Nakhon Phanom – Sakonnakhon – Udonthani or Bangkok. For the water route, Mekong River through Nakhon Phanom – Thakhaek city (Khammoun province in Laos) border, ferry is apparently used for the CBT. Nakhon Phanom is normally seen as a transit point for the exporting of agricultural products to/through Laos to Vietnam and China rather than as a hub of Trade and Investment Thus, income flows to Nakhon Phanom are low.
Cross-Border Trade There are multilateral agreements for cross-border T&I among GMS countries, but some agreements are not as precise as they could be. They are not able to be applied in every cross-border trade activity or route connecting neighboring countries. As a result, the application of the Free Trade Agreement (FTA) and CBTA is not guaranteed at the border of Nakhon Phanom city (Thailand) – Thakhaek in Khammoun province (Laos) and between Khammoun provinces (Laos) - Minh Hoa District in Quang Binh province (Vietnam).
Cross Border Trade This means payment of tax at these cities sometimes require payment of tax, of up to 12%. This is the problem of imprecise regulations and unofficial agreements on CBTA. As a result, many of the traders and investors are unwilling to invest or do businesses along these routes. To ensure tax exemption, trading companies are advised to go along the EWEC route from Mukdahan (Thailand) – Savannakhet (Laos) – Dong Ha city in Quang Tri province, Hue in Thua Thien Hue province, Danang (Vietnam). The FTA and CBTA are applied and guaranteed along this route, so businessmen know the cost of their transportation along this route.
Cross-Border Trade However, the route through Nakhon Phanom– Thakhaek – Vietnam along the R 8 and R 12 are much shorter than the EWEC route. They are therefore suitable for transporting easily spoiled products (fruits & vegetables). Presently, Thai trucks can travel to Jalor (R 12) and Nam PHoa (R 8) borders, but cannot enter Vietnam as the Vietnamese government does not allow trucks with righthand steering to drive in their country whereas Vietnam has good logistics companies to transfer the products and transport them to China.
Cross-Border Trade Nakhon Phanom is geographical well portioned to offer neighboring countries the shortest route to access Vietnam. The 3 rd Lao-Thai Friendship Bridge connecting Nakhon Phanom – Thakhaek city (Khammoun Province, Laos) has just been competed. With this convenience, Nakhon Phanom is expect to be the distribution or exporting for the region offering a land route for fruits
Cross-Border Trade Transporting goods by sea is cheap, but it takes a longer time, whereas transporting though the land route is more expensive, but it takes a shorter time. Land transport is suitable for fruits/vegetables or easily spoiled foods. In addition, warehouses will be constructed at the border, near the 3 rd friendship bridge in order to facilitate regional cross-border T&I. For this land transport system to be effective good relationship and good cooperation must suit between GMS countries and China.
Laos (Thakek, Khammoun province) Khammoun is located in the center of Laos between Thailand Vietnam the Mekong River and Nakhon Phanom province of Thailand in the west and Minh Hoa District in Quang Binh province (Vietnam) in to the east. Khammoun has a total area of 16, 315 km² with a total population of 368, 000 (est. , 2009). Thakhaek is the capital district of Khammoun. The largest hydropower project of Laos, called Nam Theun 2 is also located in Khamouan province. Apart from the Mekong River, two other big rivers, the Xebangfay in Hinboun district and Nam Theun, feed the agricultural production and industries of the province.
Agricultural Production Agriculture and forestry is the engine of the Lao economy, contributing over 50% of GDP and employing over 80% of the workforce. There has been an average growth of 4. 1% annually over the period 2005 to 2010, accounting for 30. 4% of total GDP, while industry sector (mining and hydropower) grew by 12. 5% annually over the same period, and accounting for 26% of total GDP. The service sector also grew by 8. 4% per year over the same period, accounting for 37. 2% of GDP.
Agricultural Production The major agricultural products of the province are rice, vegetables, beans, tobacco and sugarcane while livestock is mainly pigs and poultry. Cross-Border Exports are mainly Cassava to Vietnam and China, with some sticky rice being sold into Vietnam Pigs are being marketed in Vientiane City
Cross-Border Trade
Cross-Border Trade Export licenses from Luang Namtha and Oudomxay in 2006/07 (9 months) Luang Namtha Exports to China USD 4, 550, 593 Oudomxay Exports to China USD 4, 747, 629 Wood and processed wood 99, 618 Forest products 72, 942 Agricultural products Wood products 3, 453, 986 171, 918 Agricultural products Buffalos Gold Rubies Exports to Vietnam 2, 474, 525 26, 250 513, 855 1, 363, 403 2, 745 Processed wood Other 1, 070 50, 655 Exports to Vietnam 837, 845 Agricultural products 2, 745 Exports to Thailand 1, 660, 328 Wheat flour Flowers Soy beans Exports to Thailand 764, 981 53, 618 19, 247 -- Total 5, 585, 474 Wood and processed wood 21, 569 Forest products 219, 181 Agricultural products Rubies Total 10, 045 1, 409, 533 6, 213, 666
Cross-Border Trade The cross-border trade in or through Thakhek city in Khammoun province uses both land water routes. Ferry is the common mode of the water transport for products and travel from Thakhek city in Khammoun province - Nakhon Phanom province. The ferry is open from 8: 30 am – 16: 30 pm. The trip normally takes 15 -20 minutes to cross the Mekong River. There is no schedule, but the ferry is ready to serve as long as there at least two vehicles to cross the Mekong River As mentioned before, the completion of the 3 rd Lao-Thai Friendship Bride will facilitate cross-border trade and investment between and among GMS countries. It takes about 30 minutes to travel from Thakhek city to the 3 rd friendship bridge.
Cross-Border Trade There are three main routes: R 13, R 12 and R 8. R 13 connects Khammoun province to the north and south of Laos. R 12 is for getting to Minh Hoa Distric in Quang Binh province, Vietnam (at Jar Lor border) through Khammoun province. R 8 is for accessing Vinh in Vietnam through Khammoun province on R 13 and then through Borlikhamxay province on R 8. Most of the traders transport fruits and products to Vietnam and the southern part of China through R 8 (at Lak Sao – Nam Pao border) because it is more convenient and in good condition. Although it is mountainous, this is one route that the CBTA and FTA is applied
Cross-Border Trade Mountainous geography and severely underdeveloped transport infrastructure mean that domestic market integration is weak. Hence, while the northern part of Laos is located close to China, the southern part is not, in an economic sense. It is more expensive to transport goods from southern Laos to China, by road or via Thai or Vietnamese ports, than to ship goods to China from major ports in South Asia or even Africa. Trade with China has contributed significantly to the economic development of Laos, but the Chinese footprint has looked different in different parts of the country.
Cross-Border Trade The particular features of the Lao market mean that the experiences of Lao PDR can be used to illustrate two kinds of trade relations with China. The northern part of the country has had ample opportunities to engage in border trade in a wide variety of products, thanks to relatively low entry barriers in terms of transport and transactions costs. Southern Lao PDR, by contrast, has faced higher costs in its trade with China, which has limited the range of products that can be exported and imported. If the first of these cases is described as “integration”, the second one illustrates “internationalization”.
Cross-Border Trade The importance of China for exports differs between the south and the north. In southern and central Laos, small scale production and informal trade relations have for a long time been directed towards Thailand Vietnam. For instance, much of the surplus from small scale farming along the Mekong river (live animals, rice, fruits and vegetables) is eventually exported to Thailand.
Cross-Border Trade While household-based activities are still important for the aggregate economy, they have gradually been overshadowed by more explicitly export oriented production. This includes large scale plantation agriculture – rubber, timber, coffee, sugarcane, and other crops – as well as mining and electricity generation. The products from small farms in southern Laos are rarely (if ever) exported to China, unlike industrial commodities like timber, rubber, and minerals.
Cross-Border Trade The differences between these categories of exports are largely explained by transaction costs and scale of production. The weak market infrastructure – in particular, the underdeveloped transport network – means that the transaction costs for exporting from southern or central Laos to China are very much higher than the costs for exporting to the neighboring countries. Moreover, these costs are more or less fixed: the necessary expenses for shipping commodities to China are largely independent of transaction volume (up to some limit), since there are few standardized transport services available for small-scale transactions.
Cross-Border Trade To be able to cover the higher costs for trade with China, it is therefore necessary to operate at a relatively large scale. Large scale plantations and mines – or sectors with efficient intermediaries or middlemen that can collect goods from many small producers – will be able to sell to distant customer, small farmers will not.
Cross-Border Trade In northern Laos, by contrast, transaction costs are lower and it is possible also for small farmers to participate in trade with China. The lower costs are partly due to the shorter distance to China, but also related to the presence of Chinese contractors and investors operating on the Lao side of the border (which in turn is explained by geographic proximity). By encouraging local farmers to produce commodities demanded in China and collecting produce at the farm gate or at local markets – sometimes also providing credits and seeds, fertilizers, and other inputs – these intermediaries are able to reduce both transaction costs and perceived risk for individual farmers.
Cross-Border Trade Three main effects of China’s growth on the Lao economy: (i) an increased demand for exports of primary commodities to the Chinese market; (ii) increased inflows of Chinese manufactured goods competing with domestic Lao production; and (iii) border effects in northern Laos where low transaction costs have allowed even the poorest households to participate in exports to China. The first and second of these effects are expected to apply to most developing countries, whereas the third is unique to developing countries located close to the Chinese market.
Vietnam (Vinh, Thanh Hoa, Hanoi, Lang Son) Vietnam occupies an area of 330, 000 km 2 and has a coast line of 3, 200 km. Vietnam has a population of 89. 5 million (est. 2010), with labor force of 46. 51 million people and a literacy rate o more than 93. 9%. Hanoi is the capital city and second-largest city in Vietnam with a population of 6. 5 million (est. in 2009).
Agricultural Production Vietnam imports more than it exports. Exports have increased from $33. 98 billion in 2009 to $71. 6 billion in 2010. There are eight main export products; and three of them are agriculture products (seafood, rice and rubber). Imports have also increased from $38. 5 billion in 2009 to $84 billion in 2010. The main import products are machinery, equipment, spare parts, fuel, steel, materials for textiles and industry, fabrics and electronic and computing equipment.
Cross-Border Trade The main agricultural products of Vietnam are rice, sugar, coffee, tea, animal products, aquatics and rubber. The export of agriculture products such as rubber, rice and seafood are mostly from the Mekong Delta and provinces along the coast. Key investors in agricultural production are Vietnamese whereas their target markets are. Japan, Europe, China and the US.
Vinh, Nghe An Province Nghe An is a large province in the north of Vietnam. The northern part borders with Thanh Hoa province, the east borders with the sea, the west borders with Laos, the southern borders with Ha Tinh province. In terms of its logistics and transportation; road, rail, water and air are favorable. Highway 1 and the North – South railway run through the capital of Nghe An. The distance from Vinh to Ha Noi is 291 km. Moreover, the province has an airport and the road border with Laos is 419 km in length.
Agricultural Production Beer manufacturing: Production capacity 70 mills per year (occupied a biggest share of provincial tax revenue, 30%) Cassava: Production capacity of 30, 000 tons per year Dairy cows: Production capacity of 30 million liters per year Tea: Production capacity of 8, 000 tons per year Seafood: Production capacity of 18, 000 tons per year Beverage: Noticeable beverage companies are SABECO and HABECO
Cross-Border Trade Tea: Target markets for tea export are in Central Asia and China. It is exported through Hai Phong Port which is 600 Km away from Nghe An province, therefore a provincial deep water port is necessary. Peanut kernels: Main target markets are Thailand, Indonesia, Malaysia and China. They are exported though cross border road number 8 to Laos and then to Thailand through Hai Phong port to other Asia countries. Pineapple juice: Main target market is Europe. The juice is normally contained and persevered in tanks for effective transport to the target market.
Cross-Border Trade Cua Lo transit port: Cua Lo international port infrastructure includes 02 wharfs in 320 m, port site areas of 36. 000 m 2, 03 storehouses with areas of 22. 000 m 2 and passage depth of -5. 0 m ensuring vessels with loads <10. 000 tons can come in and out easily. International custom gates: Nam Can Border Gate in Nghe An Province is the route to Laos. It starts from Dien Chau in Nghe An Province, along highway 7, across Nam Can Border Gate in Nam Can Commune, Ky Son District, Nghe An Province to Laos.
Cross-Border Trade National custom gates: Two national custom gates: A. ) Thanh Thuy ( Thanh Chuong District ) with a commodities capacity of 300, 000 tons per year; and B. ) Cua Lo port custom gate with the capacity of 1. 500. 000 tons of goods per year Sub-custom gate: At Thong Thu – with commodities capacity of 100, 000 tons per year
Thanh Hoa Province Thanh Hoa is located south of the Red River (Sông Hồng) delta region, about 137 km south of Hanoi, on a small tributary of the Ma River (Sông Mã). Thanh Hóa is linked with Hanoi by road and railway and considered to be a growing trade and industrial center. Main agriculture products in Thanh Hoa are: sugarcane, cassava, rubber, vegetables and peanuts, pineapple, shrimp and fisheries. Canned Pork is being packed for export by the Hoa Mai Company
Cross-Border Trade Thanh Hoa has good logistics and basic infrastructure for international trade such the Na Meo international border gate in Thanh Hoa province From Vinh Loc in Thanh Hoa Province, along highway 217, across Na Meo Border Gate (Na Meo Commune, Quan Son highland district, Thanh Hoa Province) to Laos. Asian High Way number 217 is a dominant road that connects Thanh Hoa to Laos ( Huaphan Province). This road takes about 4 hours from central city of Thanh Hoa to Na Meo and 1. 5 hours to Huaphan province which is about 600 km to Vientiane). Like the other provinces in the central highland of Vietnam, Thanh Hoa is located on the route of the national railway.
Lang Son Province Lang Son is a frontier mountainous province, situated in the North-East of Vietnam. It shares a border with Cao Bang Province in the south, Bac Giang Province in the north, Guangxi (China) in the east, Quang Ninh Province in the north-east and Bac Kan, Thai Nguyen provinces in the west. Mountains and hills cover 80% of the province's total area. Main rivers that run through the province are: Ky Cung, Ba Thin, Bac Giang, Bac Khe, Thuong, Hoa and Trung rivers.
Agricultural Production Jatropha: In Lang Son, after harvesting Jatropha flowers, the farmers sell it to traders in China. There used to be one Jetropha oil processing factory in Lang Son in earlier years but it was destroyed in 1978. So far, there is no plan to build a new Jatropha processing factory because the biggest market is in China and Chinese buyers just accept Jatropha as raw material for their factories. Oolong Tea: Various types of tea seeds have been imported from Taiwan and Macao and planted in Lang Son. One of those teas is Oolong Tea (a famous Taiwanese tea). This tea shows a good adaptation with hill soils in Lang Son. The tea companies sell Oolong for 6 -10 USD/kg which is higher than black and green tea prices.
Agricultural Production Fruits: While the farmers sell small quantity of local fruits to Chinese market, the Vietnamese traders purchase other Chinese fruits in bulk for reselling in domestic markets.
Cross-Border Trade Lang Son has two international border gates: Dong Dang railway border gate and Huu Nghi road border gate and two national border gates: Chi Ma (in Loc Binh District) and Binh Nghi (in Trang Dinh District). Lang Son is in an important strategic position in the North-East of Vietnam. Lang Son is 154 km from Hanoi, 60 km from Thai Nguyen, 48 km from Quang Ninh. The National highway runs through Lang Son province. Another transportation means is train, in particular, Hanoi-Chinai nternational railway line with over 100 km of rail running through Lang Son.
Cross-Border Trade As Lang Son shares the border with China, Lang Son obviously offers highly competitive advantages in promoting logistics development as well as the cross border trade with China. However, this town is still less attractive to investors because of the unfavorable infrastructure. Moreover, most of the goods are stored in other areas in the north of Vietnam such as in Bac Giang city, Ha Noi city, etc). This means that most logistics companies are base in these cities and depart from there to Lang Son for loading and then go back in the same day. Therefore, there is no logistics company based in Lang Son.
Cross-Border Trade At the Friendship International border gate, Lang Son has also been implementing projects in supporting the custom procedures such as new inspection check-point with high-tech integration or convenient parking lot for container and so on.
Conclusions Private sector and governmental organizations in each province in Thailand, Laos and Vietnam recognizes importance of promoting agricultural trade and investment to the international market. The basic infrastructure, logistics as well as the provincial offices to facilitate agricultural trade and investment are ready to provide for the promotion of the agri-trade as well as investment. Some cities have sufficient production capacity of some agricultural products and would like to extend their markets to new markets in either domestic or international market. On the other hand, some cities still have insufficient supply of some agricultural production.
Conclusions Growth in domestic demand for agricultural production has been driven by both government and private sector businesses, providing new market opportunities for farmers as well as the agri-traders and investors. Although trade facilities are ready and support from the central offices are available; their integration to boost the promotion of agricultural trade and investment is not yet successfully implemented.
Conclusions The reasons for this lack of full trade integration are n n (1) information about highlights of agricultural businesses is not available (not shared), (2) lack of activities to facilitate for a connectivity and integration between and among the agribusinesses, agro-enterprises as well as the governmental offices of which involved directly in promoting agri-trade and investment, (3) business matching and promotion of cross-border and international agr-trade still depends on government and international funding. (4) export and import procedures are not yet harmonized
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