Cambodia in WTO Miss. MOEUNG Sovannden Mr. MAO Veasna Mr. NHEM Sovanna Sunday, September 23,2007

Cambodia in WTO Main focuses: History of Cambodia’s accession into WTO Opportunities and Challenges Policy Recommendation to seize opportunities and overcome challenges Sunday, September 23,2007

1- History of Cambodia’s accession into WTO What is WTO? - WTO stands for The World Trade Organization - It was created in 1995 as one of the outcomes of the Uruguay Round of multilateral trade talks. - There are 151 members Sunday, September 23,2007

Socio-economic Background - In mid-1993, Cambodia intended to re- establish itself as a democracy and a prosperous country - The economic recovery has largely been confined to urban centre. - The overall economic growth is narrowly based and fragile ( mainly based on garment, tourism and construction). - The gap between the rich and the poor has dramatically increased. Sunday, September 23,2007

Socio-economic Background - There has been very little crop production for population consumption. - The main engine of economic growth and job creation was the garment industry. - The benefits of the tourism industry boom on local livelihood has remained limited. Could the WTO membership help improve Cambodia’s socio-economic Condition? Sunday, September 23,2007

Reasons for joining WTO To protect its fledging garment industry after the removal of export quotas at the end of 2004 under MFA agreements for all members of WTO. To benefit fully from the rights accorded to all members under the WTO agreements. Will Cambodia really benefit from entering the WTO? Sunday, September 23,2007

Cambodia’s accession in WTO - In October 1994, Cambodia applied for the membership of WTO. - In December 1994, a Working party was established to consider the application - In June 1999, a Memorandum on its Foreign Trade Regime was submitted under the technical assistance from UNCTAD and the World Bank. Sunday, September 23,2007

-. In January 2001, questions and answers - In January 2001, questions and answers related to the Memorandum and conditions for the accession were circulated. On 16 April 2003, the Working Party met to consider the Memorandum for the first time On 22 July 2003, the Working Party meeting in Geneva indicated that Cambodia would become member of WTO in September 2003. Sunday, September 23,2007

On 13 October 2004, Cambodia become a full member of WTO On 11 September 2003, WTO ministers approved Cambodia’s membership agreement and Cambodia will become a full member 30days later after ratifying the agreed terms and informing to WTO. On 11 February 2004, the General Council decided to extend from 31 March to 30 September 2004 On 13 October 2004, Cambodia become a full member of WTO Sunday, September 23,2007

2- Opportunities and Challenges Most external trade barriers will be removed. The fledging garment industry is protected after the removal of export quotas. Low tariff rate as low as zero for LDC like Cambodia. No ceiling on quantity that can be exported. The rights accorded to all members under the WTO agreement. Sunday, September 23,2007

Concessions that go far beyond the level of commitments. Challenges: Concessions that go far beyond the level of commitments. A large number of commitments in legal and judicial system reforms, including the enforcement of the rule of law, and the establishment of a specialized commercial court has been made. The local production sector may have difficulties in competing with foreign producers. Lack of financial supports for economic reforms Sunday, September 23,2007

3- Policy Recommendations Restructuring Public Administration Highest priority-civil service reforms Improve good governance & fighting corruption in public administration Reducing overstaffed to meet the real need Staff with competency Civil servants salaries Transform the surplus public administration staff into a productive group Military, police, and judicial system reforms (130,000 soldiers & 70,000 policemen is simply too extravagant) Sunday, September 23,2007

Implementing and enforcing the laws Promulgation of laws and regulations need to be implemented. Improve educational system for general populations & offer special education to law enforcement authorities Strong administration and institutions Sunday, September 23,2007

Re-adjusting fiscal policy & Improving banking system: Raising effectiveness & efficiency of tax collection Review re-licensing requirement. Increase the required capital of commercial bank operations (funds available for SMEs) Develop relevant credit policy & enhance rule of laws to protect CBs from illegal & unethical practices. Sunday, September 23,2007

Rethinking foreign assistance priority: Focus more on the structural adjustment program Increasing the effectiveness & transparency in financial mgt to strengthen reform process more effective & efficient Clear objective & systematic strategies with focus on implementation Sunday, September 23,2007

Conclusion: Government commitment to promptly implement reform in a concrete manner Real determination of Cambodia leaders to move country forward with the rule of law Consistent with economic development strategy Sunday, September 23,2007

Thank you for your attention The end Thank you for your attention Sunday, September 23,2007

Commitment of adoption/implementaton of commited laws/regulations is the challenges?How membership effect (negative) on Cambodia reform? Issue of the copuntry’s capacity (it is new for Cambodia) Issue of timing (short-period) Sunday, September 23,2007

Competition law Commercial courts Sunday, September 23,2007