Quang Tri holds high expectation for Lao Bao – Densanvan next generation free trade zone

Under the leadership and direction of the central government, Quang Tri province has recently worked closely with Savannakhet province (Laos) to implement various measures aimed at promoting the pilot project “Establishment of the Lao Bao - Densavan Cross-Border Economic and Trade Zone.” Once realized, the project is expected to fully leverage Quang Tri’s strategic position as Vietnam’s gateway on the East-West Economic Corridor (EWEC), strengthen the bond of friendship and solidarity, and create a driving force for socio-economic cooperation and development between the two provinces—Quang Tri and Savannakhet—as well as between Vietnam and Laos more broadly.

After a period of active preparation, on March 15, 2024, in Lao Bao Town, Huong Hoa District, the Quang Tri Provincial Party Committee and People’s Committee, in collaboration with the Administrative Committee of Savannakhet Province (Laos), organized a workshop titled “The Lao Bao–Densavan Cross-Border Economic and Trade Zone: From Concept to Reality.”

Overview of the event. Photo: T. Nguyen

At the workshop, participants highly appreciated the two governments’ policy direction in developing the project. Discussions focused on assessing feasibility and proposing mechanisms and preferential policies to facilitate investment and business activities within the cross-border zone. Models of free trade zones and non-tariff areas were introduced, along with the investment potential and strengths of the Lao Bao–Densavan zone. Emphasis was placed on the need for new approaches and solutions, aiming to build the zone as a pioneering and substantive model of development. The vision is to establish a comprehensive zone linked with other strategic projects such as airports, seaports, and Dong Ha urban development, orienting toward a modern “new generation” free trade area. There should be policies to attract leading enterprises in specific sectors to form interconnected value chains and investment clusters.

Research will concentrate on processing industries and the development of a green economic zone. Quang Tri and Savannakhet provinces need to jointly plan and coordinate the two areas—Lao Bao and Densavan—to allocate economic sectors rationally, thereby attracting investment, developing integrated transport infrastructure, training a shared labor force, establishing a common labor market, and designing unified policies and regulations.

It is essential to issue incentive policies to attract investment in priority industries, aiming for a green, knowledge-based, and sustainable orientation. The zone should adopt modern governance models to create a civilized, modern, and high-quality living environment, ensuring social welfare and maintaining political and social stability.

There is a need to further study and implement the “one-stop, single-point” inspection model with simplified customs procedures and streamlined control of goods and vehicles, in order to maximize facilitation of international trade, cross-border travel, and imports/exports. This will involve linking information systems among functional units at the border gates. Quang Tri province affirmed that piloting the Lao Bao–Densavan cross-border zone is a sound policy of the top leaders of Vietnam and Laos. It is expected that this new model of cooperation will create a new cross-border development space, commensurate with the special friendship between the two Parties and peoples of Vietnam and Laos.

Leaders of Quang Tri and Savannakhet agreed to recommend that relevant ministries and agencies of both countries advise the governments of Vietnam and Laos to sign an agreement on piloting the Lao Bao–Densavan joint cross-border economic and trade zone. This agreement would provide the legal foundation for both provinces to establish coordination mechanisms for the management and operation of the zone. They also agreed to continue working with relevant ministries to develop regulations and guidance for implementation.

The Traditional Museum of the Vietnam–Laos Combat Alliance in Ban Dong. Photo: K.S

The establishment and development of the Lao Bao–Densavan cross-border economic and trade zone holds strategic significance in enhancing Vietnam–Laos economic connectivity, contributing to the deepening of bilateral cooperation and safeguarding national defense and security for both nations.

In recent years, investment in transportation infrastructure by both countries has begun to yield results, particularly along Route 9, with new developments in Sepon District (home to the Densavan Trade Zone). Many large-scale investment projects have been launched, significantly boosting the volume and value of import-export goods through the Lao Bao–Densavan border gates.

If implemented, the project will provide strong impetus for economic and social development in both provinces and contribute to the economic advancement of Vietnam and Laos. The Lao Bao–Densavan area is gradually being shaped into a logistics and goods transit hub for Southeast Asia and regional transport corridors across ASEAN, the Greater Mekong Subregion (GMS), and the India–ASEAN silk route.

Currently, the My Thuy Deep-Sea Port and Quang Tri Airport are under construction. The first two berths of My Thuy Port are expected to be operational by the end of 2025, and Quang Tri Airport is scheduled to start operation in 2026. These are crucial infrastructure links that will support the functioning of the Lao Bao–Densavan joint cross-border zone.

The Lao Bao–Densavan zone is envisioned to become a center for manufacturing, processing, and goods transit along the East–West Economic Corridor, with free trade zones and logistics centers connecting the Greater Mekong Subregion, and linked to China through the Vientiane–Kunming high-speed railway, to My Thuy Port in Quang Tri, and to the Da Nang International Port—aligning with current trends and regional context.

To implement the policy of both countries’ top leaders, in recent years Quang Tri province has actively coordinated with Savannakhet province and held several meetings with the Lao Ministry of Planning and Investment to unify the direction and content of the project and a draft intergovernmental agreement on the pilot project. The Lao side has agreed on the content and is supportive of submitting the agreement to both governments for official signing, which would provide the legal foundation for implementing the pilot “Lao Bao–Densavan Cross-Border Economic and Trade Zone” project.

From October 15 to 16, 2024, General Secretary and President To Lam paid a working visit to Quang Tri province. On this occasion, the province submitted proposals to the General Secretary, including an early launch of the Lao Bao–Densavan cross-border zone as a pilot model that could be replicated in other Vietnam–Laos border areas and to support socioeconomic development in border regions of Quang Tri and Savannakhet in particular, and both countries in general.

In response, General Secretary To Lam instructed the Office of the Party Central Committee to study the province’s proposals and consult relevant agencies to report to the Politburo and Secretariat, especially on the early implementation of the pilot model.

With the attention and guidance of General Secretary To Lam and the participation of the entire political system from central to local levels, it is expected that the Lao Bao–Densavan joint cross-border economic and trade zone will soon become operational and effective, following a “new generation” free trade zone model. This includes the formation of international “next-generation” logistics hubs and “green development” industrial zones integrated with smart, innovative urban areas—driving sustainable development for both Quang Tri and Savannakhet.

Ko Kan Suong - Ngoc Mai