Abstract
This paper studies the structure of external trade of Laos, a transition economy in Southeast
Asia. By analyzing the revealed comparative advantage for 1985-2005, we find that: (i)
exports concentrated in some agricultural products and crude natural resources; (ii) the
structure of exports did not change significantly; (iii) trade diversification was low; (iv) the
labor-intensive garment industry has steadily gained competitiveness; (v) within an industry
specialization tended to occur in the simple product lines; and (vi) mining industry (copper)
showed a positive trend in competitiveness. These findings imply that Laos largely follows the
neoclassical path of industrialization, and appropriate industrial and trade policies are
essential for diversifying exports and developing higher value-added commodities.