Sunday, September 23,20071 Cambodia in WTO 1. Miss. MOEUNG Sovannden 2. Mr. MAO Veasna 3. Mr. NHEM Sovanna

Sunday, September 23,2Sunday, September 23,2007007

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Cambodia in WTOCambodia in WTO

1.1. Miss. MOEUNG SovanndenMiss. MOEUNG Sovannden

2.2. Mr. MAO VeasnaMr. MAO Veasna

3.3. Mr. NHEM SovannaMr. NHEM Sovanna


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Cambodia in WTOCambodia in WTO

Main focuses:Main focuses: History of Cambodia’s accession into History of Cambodia’s accession into

WTOWTO Opportunities and ChallengesOpportunities and Challenges Policy Recommendation to seize Policy Recommendation to seize

opportunities and overcome challengesopportunities and overcome challenges


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1- History of Cambodia’s accession 1- History of Cambodia’s accession into WTOinto WTO

What is WTO?What is WTO?

-- WTO stands for The World Trade WTO stands for The World Trade OrganizationOrganization

-- It was created in 1995 as one of the It was created in 1995 as one of the outcomes of the Uruguay Round of outcomes of the Uruguay Round of multilateral trade talks.multilateral trade talks.

-- There are 151 membersThere are 151 members


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Socio-economic BackgroundSocio-economic Background

-- In mid-1993, Cambodia intended to re-In mid-1993, Cambodia intended to re-establish itself as a democracy and a establish itself as a democracy and a prosperous countryprosperous country

-- The economic recovery has largely been The economic recovery has largely been confined to urban centre.confined to urban centre.

-- The overall economic growth is narrowly The overall economic growth is narrowly based and fragile ( mainly based on garment, based and fragile ( mainly based on garment, tourism and construction).tourism and construction).

-- The gap between the rich and the poor The gap between the rich and the poor has has dramatically increased.dramatically increased.


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Socio-economic BackgroundSocio-economic Background

-- There has been very little crop production There has been very little crop production for population consumption.for population consumption.

-- The main engine of economic growth and The main engine of economic growth and job creation was the garment industry.job creation was the garment industry.

-- The benefits of the tourism industry boom The benefits of the tourism industry boom on on local livelihood has remained limited.local livelihood has remained limited.

Could the WTO membership help improve Could the WTO membership help improve Cambodia’s socio-economic Condition?Cambodia’s socio-economic Condition?


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Reasons for joining WTOReasons for joining WTO

- To protect its fledging garment industry after To protect its fledging garment industry after the removal of export quotas at the end of the removal of export quotas at the end of 2004 under MFA agreements for all 2004 under MFA agreements for all members of WTO.members of WTO.

- To benefit fully from the rights accorded to To benefit fully from the rights accorded to all members under the WTO agreements.all members under the WTO agreements.

Will Cambodia really benefit from entering Will Cambodia really benefit from entering the WTO?the WTO?


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Cambodia’s accession in WTOCambodia’s accession in WTO

-- In October 1994, Cambodia applied for the In October 1994, Cambodia applied for the membership of WTO.membership of WTO.

-- In December 1994, a Working party was In December 1994, a Working party was established to consider the applicationestablished to consider the application

-- In June 1999, a Memorandum on its In June 1999, a Memorandum on its Foreign Foreign Trade Regime was submitted under Trade Regime was submitted under the the technical technical assistance from UNCTAD and assistance from UNCTAD and the the World Bank.World Bank.


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-- In January 2001, questions and answers In January 2001, questions and answers related to the Memorandum and related to the Memorandum and

conditions for the conditions for the accession were accession were circulated.circulated.

- On 16 April 2003, the Working Party met to On 16 April 2003, the Working Party met to consider the Memorandum for the first timeconsider the Memorandum for the first time

- On 22 July 2003, the Working Party meeting On 22 July 2003, the Working Party meeting in Geneva indicated that Cambodia would in Geneva indicated that Cambodia would become member of WTO in September become member of WTO in September 2003.2003.


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- On 11 September 2003, WTO ministers On 11 September 2003, WTO ministers approved Cambodia’s membership approved Cambodia’s membership agreement and Cambodia will become a full agreement and Cambodia will become a full member 30days later after ratifying the member 30days later after ratifying the agreed terms and informing to WTO.agreed terms and informing to WTO.

- On 11 February 2004, the General Council On 11 February 2004, the General Council decided to extend from 31 March to 30 decided to extend from 31 March to 30 September 2004September 2004

- On 13 October 2004, Cambodia become a full On 13 October 2004, Cambodia become a full member of WTOmember of WTO


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2- Opportunities and Challenges2- Opportunities and Challenges

Opportunities:Opportunities:

- Most external trade barriers will be removed.Most external trade barriers will be removed.- The fledging garment industry is protected after The fledging garment industry is protected after

the removal of export quotas.the removal of export quotas.- Low tariff rate as low as zero for LDC like Low tariff rate as low as zero for LDC like

Cambodia.Cambodia.- No ceiling on quantity that can be exported.No ceiling on quantity that can be exported.- The rights accorded to all members under the The rights accorded to all members under the

WTO agreement.WTO agreement.


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Challenges:Challenges:

- Concessions that go far beyond the level of Concessions that go far beyond the level of commitments.commitments.

- A large number of commitments in legal and A large number of commitments in legal and judicial system reforms, including the judicial system reforms, including the enforcement of the rule of law, and the enforcement of the rule of law, and the establishment of a specialized commercial court establishment of a specialized commercial court has been made.has been made.

- The local production sector may have difficulties The local production sector may have difficulties in competing with foreign producers.in competing with foreign producers.

- Lack of financial supports for economic reformsLack of financial supports for economic reforms


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3- Policy Recommendations3- Policy Recommendations Restructuring Public AdministrationRestructuring Public Administration Highest priority-civil service reformsHighest priority-civil service reforms Improve good governance & fighting Improve good governance & fighting

corruption in public administrationcorruption in public administration Reducing overstaffed to meet the real needReducing overstaffed to meet the real need Staff with competencyStaff with competency Civil servants salariesCivil servants salaries Transform the surplus public administration Transform the surplus public administration

staff into a productive groupstaff into a productive group Military, police, and judicial system reforms Military, police, and judicial system reforms

(130,000 soldiers & 70,000 policemen is simply too (130,000 soldiers & 70,000 policemen is simply too extravagant)extravagant)


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Implementing and enforcing the lawsImplementing and enforcing the laws

Promulgation of laws and regulations need Promulgation of laws and regulations need to be implemented.to be implemented.

Improve educational system for general Improve educational system for general populations & offer special education to populations & offer special education to law enforcement authoritieslaw enforcement authorities

- Strong administration and institutionsStrong administration and institutions


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Re-adjusting fiscal policy & Improving Re-adjusting fiscal policy & Improving banking systembanking system::

Raising effectiveness & efficiency of tax Raising effectiveness & efficiency of tax collectioncollection

Review re-licensing requirement.Review re-licensing requirement.- Increase the required capital of commercial Increase the required capital of commercial

bank operations (funds available for SMEs)bank operations (funds available for SMEs)- Develop relevant credit policy & enhance Develop relevant credit policy & enhance

rule of laws to protect CBs from illegal & rule of laws to protect CBs from illegal & unethical practices.unethical practices.


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Rethinking foreign assistance priority:Rethinking foreign assistance priority: Focus more on the structural adjustment Focus more on the structural adjustment

programprogram Increasing the effectiveness & transparency Increasing the effectiveness & transparency

in financial mgt to strengthen reform in financial mgt to strengthen reform process more effective & efficientprocess more effective & efficient

Clear objective & systematic strategies with Clear objective & systematic strategies with focus on implementationfocus on implementation


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ConclusionConclusion::

Government commitment to promptly Government commitment to promptly implement reform in a concrete implement reform in a concrete mannermanner

Real determination of Cambodia Real determination of Cambodia leaders to move country forward with leaders to move country forward with the rule of lawthe rule of law

Consistent with economic Consistent with economic development strategydevelopment strategy


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The endThe end

Thank you for your attentionThank you for your attention


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Commitment of Commitment of adoption/implementaton of adoption/implementaton of commited laws/regulations is the commited laws/regulations is the challenges?How membership effect challenges?How membership effect (negative) on Cambodia reform?(negative) on Cambodia reform?• Issue of the copuntry’s capacity (it is Issue of the copuntry’s capacity (it is

new for Cambodia)new for Cambodia)• Issue of timing (short-period)Issue of timing (short-period)


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Competition lawCompetition law Commercial courtsCommercial courts

Documents

Sunday, September 23,20071 Cambodia in WTO 1. Miss. MOEUNG Sovannden 2. Mr. MAO Veasna 3. Mr. NHEM Sovanna