The United States opened a legation in Laos in 1950. Although diplomatic relations were never severed, U.S.-Lao relations deteriorated during in the post-Indochina War period after 1975. The relationship remained cool until 1982 when efforts at improvement began. Full diplomatic relations were restored in 1992 with a return to ambassadorial-level representation. Accounting for Americans missing in Laos from the Vietnam War has been a special focus of our bilateral relationship. Since the late 1980s, joint U.S. and Lao teams have conducted a series of excavations and investigations of sites related to cases of Americans missing in Laos.
Counternarcotics activities are also an important part of the bilateral relationship. The United States and Laos cooperate closely on opium crop control projects that have helped to bring about a 96% decline in poppy cultivation, from 42,000 hectares in 1989 to 1,100 hectares in 2007. Laos, however, remains on the U.S. list of major opium producers amid signs of some recent increase in poppy cultivation. U.S.-sponsored demand reduction programs have increased Laos' capacity to treat both opium and amphetamine addiction. The U.S. also provides law enforcement assistance to help contend with the rapid growth in methamphetamine trafficking and associated crime that has occurred in Laos since 2003.
The U.S. Government provided more than $18 million in foreign assistance to Laos in FY 2008, in areas including unexploded ordnance clearance and removal, counternarcotics, health and avian influenza, education, economic development, and governance.
In December 2004, President George W. Bush signed into law a bill extending normal trade relations to Laos; in February 2005, a Bilateral Trade Agreement between the United States and Laos entered into force. There has been a consequent rise in Lao exports to the U.S., although the volume of trade remains small in absolute terms. Bilateral trade reached $60.7 million in 2008, compared with $25.4 million in 2007. The Lao Government is working to implement the provisions of the Bilateral Trade Agreement while simultaneously seeking to join the World Trade Organization.
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