I.  COUNTRIES WITHOUT

NORMAL TRADE RELATIONS

 

 

Laos is one of only two countries lacking NTR, and one of only eight under non-NTR or embargo-type policies.

 

 

Full Embargo -----------          Cuba, Libya, Burma

 

 

Partial Embargo--------          Iran, Liberia and Sierra Leone (both for diamonds only).  All three technically retain NTR status.

 

 

No Embargo, No NTR -- Laos, North Korea

 

 

Cambodia & Vietnam--          Cambodia received NTR in 1996

                                       Vietnam received NTR in 2001

 

 

Others --------------------          Belarus, Serbia, Syria, Venezuela, and other countries with which U.S. has difficult relationships all have NTR.

 

 

 

 

II.   NTR vs. NON-NTR TARIFFS

 

 

1.  Overall:          The average country receiving NTR tariff rates faces 2.4% tariffs.  The average for non-NTR or “Smoot-Hawley” rates is usually considered 40%, but there are only two examples in practice:  Laos and North Korea.  Trade with North Korea is essentially nonexistent, with imports totaling $60,000 last year.

 

 

2.   Laos Faces The Highest Average Tariffs in the World

 

Countries specializing in clothing exports typically face tariffs higher than average, ranging from 1% for silks to 20%-32% for artificial fiber clothes.  Effective tariffs on Laos are far higher than this, ranging up to 90%, and deter most trade.  Some of the countries facing highest average tariff rates (i.e. tariffs divided by merchandise exports to the U.S.) are:

 

Country                Exports to U.S.             Tariffs Paid                   As %

Laos                            $4.1 million                       $1.9 million          46.3%

Macao                   $1,355.7 million              $237.2 million          17.5%

Palau                           $1.6 million                $0.3 million          16.8%

Mongolia                  $183.2 million                     $28.8 million          15.7%

Cambodia              $1,262.6 million              $196.4 million          15.5%

Bangladesh            $2,074.4 million              $302.4 million          14.6%

Nepal                        $171.2 million                     $21.3 million          12.5%

Yugoslavia                  $15.3 million                       $1.8 million          12.0%

Maldives Islands              $94.4 million                     $10.3 million          10.9%

Pakistan                 $2,534 million                 $267.1 million          10.5%

 

 

3.  Tariffs on Laos are Fifteen Times the ASEAN average or China:

 

Country                Exports                         Tariffs Paid                   As %

Laos                           $0.004 billion                     $0.002 billion          46.3%

China                       $151.6 billion            $4.8 billion               3.2%

ASEAN                     $80.5 billion             $2.5 billion            3.0%

World          NTR              $805.0 billion                    $19.5 billion            2.4%

III.   SOME EXAMPLES OF NTR

AND NON-NTR TARIFF RATES

 

 

1.       The top six Laotian exports to the U.S. for 2003 are:

 

Product                                             NTR Tariff                    Non-NTR Tariff

 

1.          Knitted Cotton Sweaters                16.5%                    50%

          61102020

2.          Woven Men’s Cotton Shirts 19.7%                    45%

          62052020

3.          Knitted Men’s Cotton Shirts 19.7%                    45%

          61051000

4.          Coffee                                       0%                          0%

          09011100

5.          Knitted Women’s Cotton Shirts 19.7%                    45%

          61061000

6.          Knitted Cotton T-shirts            16.5%                    90%

          61091000

 

 

2.       With NTR, Laos might have opportunities in other types of goods:

 

Product                                             NTR Tariff                    Non-NTR Tariff

Women’s Silk Suits                          1.0%            65%

Women’s Handicraft Cotton Dresses          11.8%                    90%

Cotton Martial Arts Uniforms                 7.5%            90%

Sun Umbrellas                                 12%                       60%

Beer                                                    0%                        13.2 cents/liter

Rattan Floor Matting                             0%                        40%

Rattan or Bamboo Chairs                               0%                        60%

Wicker Baskets (Rattan or Bamboo)       0%                        50%

Toys                                                   0%                        45%

 

IV.   LAOS, CAMBODIA AND VIETNAM SINCE 1996

 

 

1.       Laos and Cambodia:  In 1996, neither Laos nor Cambodia had NTR.  At that time Laos exported slightly more to the U.S. than Cambodia.

 

Cambodia received NTR at the end of 1996.  Since then, in percentage terms Cambodia was the world’s fastest-growing exporter to the US for several years, and continues to get steady growth.  Apparel exports to the U.S. now account for about 200,000 jobs in Cambodia.  Imports from Laos dropped and have been around $4 million since the turn of the century.

 

Year            Cambodian Exports to U.S.          Laotian Exports to U.S.

 

1996                  $3.7 million                      $16.4 million

 

1997             $102 million                     $14.3 million

 

1998             $364 million                     $21.0 million

 

1999             $592 million                     $12.7 million

 

2000             $824 million                      $9.6 million

 

2001              $968 million                      $3.7 million

 

2002            $1070 million                              $3.9 million

 

2003            $1386 million                              $4.1 million

 

 

 

2.          Vietnam:  Vietnam was more able to export than either Cambodia or Laos without NTR.  Total Vietnamese exports to the U.S. grew to about $1 billion before enactment of NTR, as Vietnam found opportunities in a few products like shrimp, crude oil and coffee where non-NTR tariffs are low.  Since receiving NTR, Vietnam's exports have quadrupled, reaching $4.5 billion in 2003.