Obama Backs Laos Labor Efforts for Tariff Benefits

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By Len Bracken

Sept. 6 — President Barack Obama in Laos Sept. 6 said he supports the commitment of his Lao counterpart to improve labor standards as a move toward receiving U.S. tariff benefits.

In a joint declaration, Obama welcomed Lao President Bounnhang Vorachit’s commitment to “pursuing steps to uphold international labor standards that could pave the way” for the U.S. to grant Laos benefits under the Generalized System of Preferences (GSP).

The GSP program grants eligible less-developed countries preferential tariff terms for select products. In 2013, when Laos joined the World Trade Organization (WTO), the administration conducted a review to see whether Laos would qualify for benefits under the GSP, but did not recommend granting country eligibility because of labor rights and human rights concerns.

“The two leaders recognized the importance of protecting the most vulnerable populations while pursuing economic development and upholding international labor standards, including combating child labor, forced labor, and human trafficking,” the declaration said.

In February 2016, the U.S. and Laos established a bilateral Trade and Investment Framework Agreement (TIFA) to consult on trade-related issues such as intellectual property, labor, environment and capacity building. The Office of the U.S. Trade Representative said at the time that total two-way goods trade between the U.S. and Laos grew five-fold over the preceding decade to $70 million, and two-way agricultural trade grew eight-fold in the same period to $8 million.

ASEAN-Related Summits

The U.S.-Laos TIFA is also designed to coordinate the work of both countries on multilateral and regional issues related to the Association of Southeast Asian Nations (ASEAN). Obama is in Vientiane, Laos, for the U.S.-ASEAN Summit and the East Asian Summit, which are held at the same time and place as the ASEAN Summit. The U.S. is not a member of ASEAN.

Upon his arrival, Obama said he was honored to be the first U.S. president to visit Laos and that the difficulties in the bilateral relationship wouldn't stop them from working together, according to a pool report. In his Sept. 6 speech at Lao National Cultural Hall in Vientiane, Laos, Obama referenced legacy issues stemming from the U.S. intervention in the Lao civil war in the 1960s, adding that the U.S. will double its annual funding to $90 million over the next three years to help Laos expand its bomb-clearing work.

“Two of our top companies—Microsoft and General Electric—are helping to increase training in engineering and technology,” Obama said. “Young people in Laos shouldn’t have to move someplace else in order to prosper.”

GE, Microsoft in Laos

According to a White House fact sheet, General Electric Corp. has announced it will open an office in Vientiane and signed a Memorandum of Understanding with Electricité Du Laos, Laos’ state electric utility, to upgrade its technical training center and conduct a detailed technical assessment that will help Laos make investments in a smarter grid.

Microsoft Corp. has partnered with the Lao Ministry of Education and the Ministry of Post and Telecommunications to help thousands of Lao students and entrepreneurs access training courses on subjects from technology and engineering to accounting and English language at no cost, the fact sheet said.

‘Push Hard' for TPP

Obama also called attention to the 12-nation Trans-Pacific Partnership agreement as a “core pillar” of the U.S. rebalance to the Asia Pacific and as important for regional economic integration and to reinforce U.S. security alliances. Laos is not a party to the pact that Obama hopes Congress will ratify in the post-election, lame-duck session.

“Failure to move ahead with TPP would not just have economic consequences, but would call into question America’s leadership in this vital region,” Obama said.

House Majority Leader Kevin McCarthy (R-Calif.) Sept. 6 was asked at the Capitol by reporters about the prospects for TPP being brought up in the lame-duck session of Congress.

The administration “knows it has problems” with the TPP and “it's still working through” the problems, he said. “I haven’t seen them solve those issues. There’s nothing on the horizon I see as of right now that would come up into a lame duck.”

To contact the reporter on this story: Len Bracken in Washington at lbracken@bna.com

To contact the editor responsible for this story: Jerome Ashton at jashton@bna.com

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