Order Code RS20931
Updated November 22, 2004
CRS Report for Congress
Received through the CRS Web
Laos: Background and U.S. Relations
Thomas Lum
Specialist in Asian Affairs
Foreign Affairs, Defense, and Trade Division
Summary
Until November 2004, when Congress passed legislation extending
nondiscriminatory treatment to the products of Laos, the Southeast Asian nation
remained one of the few countries with which the United States did not have normal
trade relations (NTR). The debate in Congress over whether to grant NTR status to Laos
was long influenced by the legacy of U.S. military involvement in Laos during the
Vietnam War and by allegations of serious human rights abuses in the country,
particularly against the Hmong ethnic minority. Despite strained bilateral relations, the
United States and Laos have cooperated in important areas, including recovering
remains of Americans missing in action (MIAs) and counter-narcotics efforts. On
November 19, 2004, Congress passed the Miscellaneous Trade and Technical
Corrections Act of 2004 (H.R. 1047), which granted normal trade relations treatment to
Laos.
Congressional Interests
Since 1997, when the United States and the Lao People’s Democratic Republic
(LPDR) concluded a bilateral trade agreement, legislation to extend normal trade relations
(NTR) treatment to the LPDR faced opposition from many Members of Congress
concerned about human rights conditions in Laos and the plight of the Hmong minority.
In 2004, Laos, one of the poorest countries in Asia, was one of only three countries that
did not have normal trade relations with the United States, and the only country with
normal diplomatic relations that was denied NTR treatment.1 Some prominent Hmong-
American organizations opposed enacting the trade agreement, although the Laotian-
American community as a whole was reportedly split on the issue.2
1 In 2004, the three countries that did not have NTR status with the United States were Cuba,
Laos, and North Korea.
2 Vaudine England, “Laotians Are Divided over U.S. Trade,” Wall Street Journal, September 1,
2004; Daniel Lovering, “Former Enemies Wage Battle over U.S. Trade with Laos,” Associated
Press, January 12, 2004; Frederic J. Frommer, “Free Trade Deal for Laos Splits Hmong
(continued...)
Congressional Research Service ˜ The Library of Congress

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Although there are no formal
Laos in Brief
restrictions or sanctions, the amount
of U.S. foreign assistance to Laos
Chief of State: President Gen. KHAMTAI Siphandon
remains relatively small and mostly
Population: 5.7 million
c h a n n e l e d t h r o u g h n o n -
Per Capita Income: $310 or $1,700 (purchasing power
governmental organizations. U.S.
parity)
foreign assistance programs include
Life Expectancy: 54 years
joint efforts to account for
Literacy: 53%
Americans missing in action and
Religious Affiliations: Buddhist — 60%; Animist — 30%;
remove unexploded ordnance from
Christian — 1.5%.
the Vietnam War; counter-
Ethnic Groups: Lao (lowland and upland) — 90%;
narcotics;3 anti-trafficking in
Highland (Hmong and Yao) — 9%; Vietnamese
and
Chinese (1%).
persons; HIV/AIDS prevention; and
Major Industries: hydroelectric power, tin and gypsum
the development of the silk sector.
mining, timber, agricultural processing, coffee production,
Total U.S. assistance to Laos in
garments, and construction.
FY2004 is estimated to be $3.5
Largest Export Markets: Vietnam, Thailand, France
million, plus an additional $500,000
Sources: CIA World Factbook; Economist Intelligence Unit
in Leahy War Victims Funds for
landmine education.
Political and Economic Situation in Laos
Political Situation. The Lao People’s Revolutionary Party (LPRP), a secretive,
Leninist political organization, has sole authority over the government and society of
Laos. The LPRP contains factions, but the Party appears to be united against fundamental
political change or democratization. The main factions in the LPRP represent economic
reformers, economic conservatives, the military, regional and provincial interests, pro-
China and pro-Vietnam leanings, and younger and older cohorts. Some LPRP leaders
reportedly view China as a model for economic reform. China engages in cooperative
economic projects with Laos and provides technical and economic assistance (including
a grant of $3.6 million for a rubber plantation and a low interest loan worth $24 million
in 2004). Vietnam’s influence remains strong, however, particularly in political and
military affairs.4
Since 1999, the LPRP has faced intermittent, sometimes violent incidents of political
opposition. In October 1999 and November 2000, university students and teachers staged
two demonstrations for democratic reforms, resulting in dozens of arrests. Since 2000,
rebel militias operating out of Thailand have staged several attacks on Lao border posts
and anti-government groups have detonated over a dozen small bombs in the capital,
Vientiene, and other cities, killing several people. At least two groups, the Free
2 (...continued)
Community,” Associated Press, May 6, 2003.
3 Laos is the world’s third-largest producer of opium.
4 Xinhua News Agency, March 18, 2004. According to some analysts, China and Vietnam have
competed for influence in both Laos and Cambodia: Yves Bourdet, “Laos in 2001,” Asian Survey
(vol. 42, no. 1), January/February 2002; “In Laos, a Shift in Government,” Stratfor (Strategic
Forecasting), March 30, 2001.

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Democratic People’s Government of Laos and the Committee for Independence and
Democracy in Laos, reportedly have claimed responsibility for the explosions. Between
February and August 2003, seven ambushes of highway buses and other vehicles were
reported, in which over 40 people were killed, including two Swiss tourists. The Lao
Government has both attempted to downplay the attacks and occasionally blamed Hmong
insurgents. So far, these isolated attacks have not sparked widespread anti-government
activity and, according to analysts, the regime’s hold on power remains firm.
Economic Conditions and Trade. Laos is a small, mountainous, landlocked
country bordering Burma, Cambodia, China, Thailand, and Vietnam. One of the poorest
countries in Asia, with a per capita annual income of $310, Laos ranks 135th on the United
Nations Development Program Human Development Index, which measures life
expectancy, education, literacy, and gross domestic product (GDP) per capita. The
country’s road and communications systems are underdeveloped. Subsistence agriculture
accounts for about half of GDP and involves over 80% of the country’s labor force.
About 18% of GDP comes from manufacturing.5 In addition, Laos continues to cope with
the damage and unexploded ordnance from U.S. bombing raids during the Vietnam War.6
In 1986, the LPDR government began a policy of economic reform — disbanding
collective farms, allowing market forces to determine prices, legalizing private ownership
of land, and encouraging private enterprise in all but some key industries and sectors.
Between 1988 and 1996, the country’s economy grew by 7% per year. It began to falter
in 1997 due to effects of the Asian financial crisis, a drop in exports to Thailand, and
adverse economic policies such as the re-imposition of central controls. The economy
began to stabilize in 2000. Laos’s GDP grew by 5.9% in 2002-03 and is expected to grow
by 6% in 2004-05.7
The LPDR joined the Association of Southeast Asian Nations (ASEAN) in 1997 and
has lowered tariffs toward member nations. Between 1998 and 2001, the value of Laos’s
exports to the European Union, which grants Laos and other least developed countries
preferential tariff treatment, increased from $100 million to $110 million. By contrast,
its exports to the United States fell from $21 million to $3.9 million during the same
period. In 2003, Laos exported $4 million worth of goods to the United States, up from
$2.4 million in 2002 — mostly apparel, wood products, and coffee.8 In 2003, Laos
imported $4.6 million worth of merchandise from the United States. With the help of
foreign investment, the LPDR has built several large dams since the late 1990s and has
5 Bertil Lintner, “Stalled Reforms,” Far Eastern Economic Review, November 7, 2002.
6 The United States dropped more than 2.5 million tons of ordnance on Laos during the Vietnam
War, more than the total used against Germany and Japan in World War II. An estimated 10
million unexploded submunitions or “bomblets” remain scattered across the country, killing
approximately 200 Laotians per year. Since 1973, 5,700 Laotians have been killed and 5,600
injured by unexploded ordnance. Paul Wiseman, “30-Year-Old Bombs Still Very Deadly in
Laos,” USA Today, December 12, 2003; Ellen Nakashima, “U.S. Search Teams Scour Old
Battlefields: More than 1,800 Are Still Missing in Vietnam Alone,” Washington Post, May 4,
2004.
7 Asian Development Bank; The Economist Intelligence Unit, “Country Report — Laos,” August
2004.
8 United States International Trade Commission.

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begun exporting electricity to Thailand and Vietnam. The sale of hydroelectric power
makes up nearly one-third of the country’s exports, followed closely by garments.
Experts estimate that it will take two years for Laos to make the required legal, financial,
budgetary and other trade-related reforms to join the World Trade Organization.9
Human Rights Issues
Following the communist assumption of power in 1975, the Lao government dealt
harshly with its perceived political opponents, including Royal Lao Government and
Army officials, the royal family, and U.S.-trained Hmong guerrilla fighters, sending
30,000-50,000 of them to “seminar camps” (also called “reeducation centers”). Nearly
all remaining political prisoners reportedly were released by the late 1980s.10 The
government does not allow the independent organization of political, religious, or labor
groups, severely curtails free speech and association, controls the country’s judiciary, and
regularly denies due process.11 In addition to hundreds of short- and long-term political
detainees, there were nine known political prisoners in 2003. According to former
prisoners, extremely harsh conditions and the use of torture in Laotian jails are common.12
Religious Freedom. The State Department has characterized Laos as a
“totalitarian or authoritarian regime” for six consecutive years (1999-2004) although it
has never designated Laos as a “country of particular concern” (CPC). The United States
Commission on International Religious Freedom (USCIRF) recommended that Laos be
placed on the CPC list for four consecutive years (2000-2003), mostly for persecution of
the Christian minority. In 2004, the Commission placed Laos on a “watch list” but did
not recommend that the country be designated as a CPC, citing the release of religious
prisoners, the reduction in forced renunciations of faith, and the re-opening of many
churches that the government had closed. In February 2004, the Lao government and the
U.S. Embassy in Laos jointly conducted a seminar on religious freedom issues. Although
religious organizations that are not officially approved by the state are illegal and the
government has blocked registration of new denominations, the Lao government appears
to tolerate some independent religious activity.
Because human rights in Laos lack legal protections, some violations of religious
freedom continue at the local level, including arrests and short-term detentions of leaders
of Christian congregations. As of September 2004, there were two known religious
prisoners. In some rural areas, government officials have suppressed Christian activities
for allegedly having foreign influences, disrupting local customs and practices, competing
9 “Laos Economy: The Government Prepares for Planned WTO Entry,” Economist Intelligence
Unit — Viewswire, March 8, 2004.
10 Over 300,000 Laotians, mostly Hmong, fled Laos after the communist takeover, mostly to
Thailand and then to other countries. Mike Fahey, “Laotians Face Death If Sent Home, Activist
Says,” Madison Capital Times, December 16, 1999.
11 In December 2000, the LPDR signed the International Covenant on Civil and Political Rights
and the International Covenant on Economic, Social, and Cultural Rights. Laos has not yet
ratified the covenants.
12 Department of State, Bureau of Democracy, Human Rights, and Labor, “Country Reports on
Human Rights Practices 2003 — Laos,” February 25, 2004.

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for village resources, or challenging local authority. A new religious decree, promulgated
by the Lao government in July 2002, reportedly has curbed some human rights abuses, but
also reaffirmed the government’s control over religious practice. Article 9 of the law,
which discourages acts that “create divisions among religions and persons,” has often
been invoked to justify government restrictions on religious activities.13
The Hmong Minority. Many observers have argued that although societal
discrimination likely persists, the LPDR government does not currently engage in
systematic persecution of the Hmong minority. However, others have attested that the
Lao government has committed atrocities against defiant Hmong communities living in
remote areas. During the Vietnam War, the United States Central Intelligence Agency
(CIA) trained and armed an estimated 60,000 Hmong guerillas to fight the Vietcong.
After the Lao communist government took power in 1975, Lao and Vietnamese troops
crushed most of the Hmong army. The Lao government allegedly has carried out a 25-
year war of attrition to eliminate remaining Hmong militias and their communities, who
may total from one thousand to several thousand persons. Several of an estimated 20
rebel groups and their families are said to be surrounded by LPDR troops and facing
starvation.14 This continuing conflict has been a key stumbling block to better U.S.-LPDR
relations. U.S. officials in Laos have been unable to independently verify claims of Lao
People’s Army or Vietnamese troop movements in mountain areas, mass killings, or the
use of biological weapons against the Hmong. Monitoring is difficult, however, because
many highland villages are accessible only by helicopter and travel is restricted by the
central government.
Between 1975 and 1998, nearly 130,000 Hmong refugees were admitted to the
United States.15 In the 1990s, about 29,000 Hmong were repatriated from camps in
Thailand to Laos. Some returning Hmong claimed that they faced discrimination or lack
of economic opportunities, while United Nations human rights observers found that the
former refugees were “successfully reintegrated.”16 An estimated 60,000 Hmong remain
in Thailand; many have integrated into local society. In January 2004, the Bush
Administration announced that the approximately 15,000 Hmong living at the Wat Tham
Krabok temple in central Thailand would be eligible to apply for resettlement in the
United States. Most have arrived in Minnesota, Wisconsin, and California, homes to
large Hmong-American populations.
13 U.S. Department of State, Bureau of Democracy, Human Rights, and Labor, International
Religious Freedom Report 2004 — Laos, September 15, 2004; U.S. Commission on International
Religious Freedom, Annual Report 2004, May 2004.
14 Andrew Perrin, “Welcome to the Jungle,” Time Asia, May 5, 2003; Amnesty International
Public Statement, No. 224, September 13, 2004; Jane Hamilton-Merritt, Tragic Mountains: The
Hmong, the Americans, and the Secret Wars for Laos, 1942-1992 (Bloomington: Indiana
University Press, 1992). Hamilton-Merritt suggests that as many as 30,000 Hmong soldiers and
civilians died as a result of their involvement in the Vietnam War.
15 According to some estimates, the U.S. Hmong population totals approximately 250,000 persons
and constitutes slightly over half of the U.S. Laotian population.
16 Department of State, Bureau of Democracy, Human Rights, and Labor, “Country Reports on
Human Rights Practices 2003 — Laos,” February 25, 2004.

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Normal Trade Relations
Legislative History. The United States and Laos initialed a bilateral trade accord
in 1997 and signed it on September 19, 2003. However, the agreement could not be put
into effect unless Congress granted NTR status to Laos. Unlike trade legislation for
Vietnam, which allowed for annual renewals of NTR, trade legislation for Laos and
Cambodia provided for permanent NTR status.17 Two bills that would extend NTR
treatment to Laos were introduced in the 105th Congress but not enacted, largely due to
concerns about human rights conditions. In 2001, the Bush Administration included the
U.S.-Vietnam and U.S.-Laos bilateral trade agreements in its international trade agenda.
Three bills were introduced in the 108th Congress — H.R. 3195, S. 2200, and H.R. 3943
— that would extend nondiscriminatory treatment to the products of Laos. The
Miscellaneous Trade and Technical Corrections Act of 2004 (H.R. 1047) includes a
provision (Section 2005, as reported out by the conference committee) that would grant
NTR to Laos. The House and Senate agreed to the conference report on October 8, 2004,
and November 19, 2004, respectively.
Arguments for and against NTR. Proponents of NTR for Laos argued that
better bilateral economic relations would enhance areas in which the two countries
already cooperate. They contended that greater U.S. trade and investment would bolster
U.S. leverage with Laos (including U.S. pressure on human rights issues), in relation to
the influences of Vietnam and China, and help strengthen the position of economic
reformers within the Lao government. For the people of Laos, it was held, NTR would
help raise exports and create employment (with little impact on U.S. jobs) and help lift
many Laotians, including the Hmong minority, out of dire poverty.18 Furthermore, some
argued, NTR would help spur the LPRD’s integration into the Southeast Asian regional
economy and strengthen commercial ties between Laotians and Laotian-Americans.
Opponents of extending NTR status to Laos argued that human rights conditions in
the country would have to improve substantially before NTR treatment was considered.
They contended that granting NTR would strengthen the communist regime, which they
stated had professed friendship with North Korea and denounced the U.S.-led war in Iraq,
and betray the trust of Hmong people. Some policy-makers held that enacting the
bilateral trade agreement would not likely improve the livelihoods of most people in Laos,
and called upon the Lao government to deepen economic restructuring. Some Members
of Congress also demanded that the Lao government provide greater cooperation in
investigating the disappearance of two Hmong-Americans who were last seen near the
Thailand-Laos border in April 1999.19
17 Since Laos (like Cambodia) was not considered a “non-market economy” when the Trade Act
of 1974 was passed on January 3, 1975, Title IV, Section 402 (the Jackson-Vanik Amendment)
does not apply to Laos as it does to Vietnam. Congress extended NTR treatment to Cambodia
on September 25, 1996 (P.L.104-203) and to Vietnam on October 16, 2001 (P.L. 107-52).
18 Catharine Dalpino and Edward Gresser, “Change Policy toward Laos, the Last Vestige of the
Vietnam War,” Seattle Post-Intelligencer, April 24, 2003.
19 “Congressmen Call on Bush to Block Laos Trade Drive,” Agence France-Presse, April 26,
2003; Senator Russell Feingold, Floor Statement, Congressional Record (July 10, 2003), p.
S9236.

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