USEFUL ARTICLES

New Thai-Lao Friendship Bridge to Boost Economic Connectivity by 2025

October, 31 2023

On September 9, 2023, Thai Prime Minister Srettha Thavisin traveled on Special Train No. 931, a special air-conditioned diesel train, from Udon Thani Railway Station to Nong Khai Railway Station.

Accompanying him were Cabinet members, representatives from Udon Thani’s private sector, the President of the Udon Thani Chamber of Commerce, and the President of the Udon Thani Federation of Industries.

Key discussion topics included:

• Enhancing Thailand-China cargo transportation
• Accelerating the completion of the dual-track railway project to improve logistics efficiency
• Supporting Udon Thani’s hosting of the International Horticultural Exposition, attracting foreign investment

Need for a New Thailand-Laos Friendship Bridge

During his visit to Rommkiew Market, a safe agricultural produce market in Udon Thani, the Prime Minister discussed the current limitations of the Thailand-Laos Friendship Bridge.

Currently, the bridge supports both road and rail transport but cannot accommodate both simultaneously, leading to delays in logistics operations.

To address this issue, the Thai government plans to construct a new Thailand-Laos Friendship Bridge (Nong Khai-Vientiane) to support regional railway network expansion and improve cross-border connectivity.

Thailand-China Railway Trade Sees Strong Growth

The Department of International Trade Negotiations recently visited Laos to assess the feasibility of utilizing the China-Laos High-Speed Railway for Thai exports.

Key findings:

• The railway significantly reduces transportation time, cutting transit from 2 days via road to just 15 hours.
• Thailand can leverage Free Trade Agreements (FTAs) such as the ASEAN-China FTA and Regional Comprehensive Economic Partnership (RCEP) to boost fruit exports to China.

Since the China-Laos Railway opened in December 2021, Thailand’s fruit exports to China have surged.

Thailand’s fruit exports to China via the Nong Khai border checkpoint:

• 2021: THB 90.41 million
• 2022: THB 1.96 billion (21-fold increase)

Top Thai Exports to China via the China-Laos Railway (January - May 2023)

Thailand-Laos Strengthen Bilateral Cooperation

On October 30, 2023, Prime Minister Srettha Thavisin met with Laotian Prime Minister Sonexay Siphandone to discuss key areas of economic cooperation between the two nations.

1. Economic and Trade Cooperation

• Thailand supports economic integration between Laos and Thailand’s northeastern provinces to create a mutually beneficial "Growth Area."
• Goal: Increase bilateral trade to USD 11 billion by 2025.
• Reduce trade barriers and facilitate cross-border commerce.

2. Infrastructure and Connectivity

• Railway Cooperation:

  • Accelerate construction of the Mekong Railway Bridge (Nong Khai - Vientiane), with Thailand offering low-interest loans for support.
  • Expedite the connection between Thanaleng Station and Vientiane Railway Station (Khamsavath), expected to start operations in early 2024.

• Road and Bridge Projects:

  • Thailand-Laos Friendship Bridge 5 (Bueng Kan - Bolikhamxay): Near completion.
  • Thailand-Laos Friendship Bridge 6 (Ubon Ratchathani - Salavan): Agreement reached.
  • Upgrading Highway 12 (Nakhon Phanom - Thakhek - Na Phao - Vietnam’s Quang Binh) to improve Thai-Laos-Vietnam-China logistics.

3. Logistics and Customs Facilitation

• Establish a Common Control Area (CCA) at the Thailand-Laos Friendship Bridge 2 (Mukdahan-Savannakhet) to reduce costs for businesses.
• Optimize logistics fees at Vientiane Logistics Park (VLP) to ensure Thai businesses can plan ahead.
• Restore pre-pandemic access for Thai container trucks into Laos for cross-border freight transport.

4. Environmental Cooperation

• Develop a Joint Action Plan (JAP) with Thailand, Laos, and Myanmar to tackle cross-border haze pollution.
• Thailand will support Laos in creating a Fire Risk Map and training forestry officials to prevent wildfires.

5. Energy Cooperation

• Thailand plans to purchase more clean energy from Laos to support its expanding industrial sector.

Key Agreements Signed

Following the discussions, Thailand and Laos signed several cooperation agreements, including:

1. Thailand-Laos Cultural Exchange Memorandum (between the Thai Ministry of Culture and the Laotian Ministry of Information, Culture, and Tourism).
2. Thai NEDA (Neighbouring Countries Economic Development Cooperation Agency) and Lao National Railway Cooperation Agreement for capacity building and business development.
3. Thailand-Laos Friendship Arboretum, celebrating 70 years of diplomatic relations.
4. Sustainable Agriculture Learning Center, supporting agricultural collaboration between Thailand and Laos.

Conclusion

The new Thailand-Laos Friendship Bridge and China-Laos Railway will significantly enhance cross-border logistics while promoting bilateral trade, tourism, and investment. Thai businesses will benefit from faster export routes to China and Laos’ "Land-Linked" strategy, unlocking new opportunities across ASEAN and beyond.