Because Laos is a landlocked country, its foreign trade volume is highly dependent on transit routes through neighboring countries. Bangkok serves as the major port, but the Vietnamese ports of Da Nang--the most distant from Vientiane at 1,000 kilometers--and Cua Lo--the closest to Vientiane at 460 kilometers- -are also used. The Express Transit Organization of Thailand has a monopoly on the LPDR's transit business through Thailand, initially imposed as a way to regulate trade in strategic goods. Transshipment of goods through Vietnam and especially Thailand increased the prices of Laos's goods greatly--by as much as 60 percent, or, according to some sources, as much as 300 percent-- severely reducing the competitiveness of export commodities on the world market. In December 1991, and again in the fall of 1993, Cambodia offered Laos the use of its seaport at Kompong Som, but Cambodia's poor infrastructure and lawlessness make this an empty gesture.

As of 1991, limitations on trade resulting from transshipment began to ease. Plans were made to establish a Thai-Lao joint venture responsible for handling transit goods to Laos, with the potential of cutting transit costs in half. To further reduce the Thai company's monopoly on transshipment of goods to Laos, Thai import duties on more than twenty agricultural goods, including one of Laos's major exports, coffee, were reduced from a 40 to 80 percent range to a maximum of 20 percent. By 1991 Thailand had expanded from three to eight the number of approved border transit points with Laos. Completion of the first bridge over the Mekong, which opened in April 1994, is likely to further encourage regional trade.

Data as of July 1994