Phnom Penh. 28 March 2005 — The Ministry of Commerce and the International Finance Corporation’s Mekong Private Sector Development Facility (IFC-MPDF) launched a new publication today that details opportunities and challenges of doing business now that Cambodia has become a member of the World Trade Organization. The publication, Cambodia and the WTO: A guide for business, is available free of charge in English and Khmer from IFC-MPDF and the Ministry of Commerce.
At the launch, which was a half day seminar on WTO for business and government leaders, H.E Sok Siphana, Secretary of State for the Ministry of Commerce, began by clarifying some common misconceptions about WTO. “The first”, he said, “is that the World Trade Organization is simply a “free trade” organization. It’s not. WTO’s mission is to open markets and keep them open, but members can still set tariffs and other import restrictions as long as they are within the framework agreed to when the country joined WTO. But over time the objective is to reduce tariffs and restrictions as much as possible to help businesses take advantage of the global economy. WTO provides a forum where legally binding trade agreements are negotiated and a repository for details of those agreements and the trade commitments made by each of its members. It also provides a key system for resolving disputes among members.
With regard to impacts of WTO membership, H.E. Sok Siphana said that in the short term, Cambodia will not gain much in terms of market access. “As a “least developed country”, Cambodia already enjoys a number of trade preferences. The impact of imports on domestic producers is also likely to be negligible. As part of the WTO accession process, Cambodia began opening up its markets in 2001 and, in addition, local producers face strong competition from smugglers. Fully implemented, WTO rules could help many local producers by encouraging improved border enforcement that cuts opportunities for smuggling.
WTO trade negotiations are an ongoing process and Cambodia must take an active part to ensure its needs are met. “While actual negotiations are carried out by representatives of the government, we need business owners to tell us what they want. When the current Doha round of negotiations ends, we are expecting that industrial countries will substantially reduce subsidies they pay to their farmers and open their markets further. That will mean opportunities for agricultural products from Cambodia. Over the years WTO members have successfully opened up European and North American markets for many products but these agricultural subsidies made it difficult for outside producers to compete.
Following the Secretary of State’s overview of key WTO principles, David Woods, MPDF’s chief consultant on the WTO Guide, presented key points regarding how WTO accession and other evolving aspects of global trade are likely to impact a sample of Cambodia’s products and sectors. Those covered in his presentation and in the WTO Guide were rice, cashew nuts, livestock, mangoes, vegetable oils, palm wine, rubber, fish, silk products, bamboo and rattan furniture, garments, financial services and construction.
Summing up the seminar to launch the WTO Guide, IFC-MPDF General Manager Adam Sack stated that he hoped the new publication would prove a valuable resource for Cambodia’s private sector. “We collaborated with the Ministry in producing this to help dispel some of the misconceptions about WTO, highlight areas with growth potential and challenges to overcome, and also to provide useful sources for further information. Through this and our other initiatives to explain WTO to the private sector, we hope that Cambodian entrepreneurs will understand what’s required to make the most of new WTO opportunities.”
