IMPLEMENTING THE INTEGRATED FRAMEWORK
“IF”  IN CAMBODIA

Presented by the Ministry of Commerce, Royal Government of Cambodia to the 6^th Consultative Group (CG) Meeting,
Government Palace, Phnom Penh, 19-21 June 2002

PREPARATION FOR ACCESSION TO THE WTO

CAMBODIA'S ACCESSION TO THE WTO:
A Historical Perspective.

Cambodia’s Unique Relationship with the GATT²¹

Cambodia previously enjoyed a special status within the General Agreement on Tariffs and Trade (GATT), due to its former relationship with France, and also came very close to acceding on its own. The country’s previous colonial status could have facilitated Cambodia’s accession to GATT. Under the terms of Article XXVI:5(c) of GATT 1947 — which now has no equivalent in the WTO — countries such as Cambodia were permitted a relatively easy route for entry into GATT. Former colonies of GATT contracting parties could acquire de facto GATT status upon their achievement of independence. A country could then convert this de facto status into full GATT contracting party status by succession, a process that involved much less stringent scrutiny of its trade regime and fewer new commitments than did the ordinary accession process of GATT Article XXXIII. Some countries succeeded to GATT shortly after gaining independence, while others waited years before taking this step. Cambodia qualified for this route to accession, insofar as France did apply GATT rules to Cambodian trade while the country was under a protectorate, and duly informed the GATT of this fact upon Cambodia’s independence. The option expired with the end of the GATT, however, and Cambodia — like all other countries that are still outside the system — must now meet the more rigorous requirements of WTO accession.

Cambodia did indeed enjoy de facto status as a GATT contracting party, as did other former colonies of France. It made a very serious effort to accede to GATT on its own and  went so far as to finalize negotiations with the existing contracting parties over the terms of its protocol of accession, which were formally concluded on 6 April 1962.²²  Although the Geneva side of the process was concluded, Cambodia never completed the domestic ratification procedures. The 1962 protocol expired with the GATT itself in 1995, and is irrelevant to Cambodia’s WTO status. The country now faces the same process of accession as other countries.

On 19 October 1994, Cambodia applied for accession under Article XII of the Agreement Establishing the World Traded Organization and a Working Party was established in December of the same year to examine the accession process of Cambodia. With technical assistance from UNCTAD and the World Bank, Cambodia completed its Memorandum on Foreign Trade Regime (MFTR) and submitted it to the Working Party in May 1999. Subsequently, Cambodia received 179 questions and comments on the MFTR from Japan, EU, Australia and the US. On 08 November 2000 Cambodia provided its replies along with the pertinent documents clearing the way for the holding of the First Working Party Meeting (WP) on 22 May 2001 and a series of bilateral negotiations with some interested members.

While the outcomes of the first round of multilateral and bilateral negotiations were positive, many outstanding issues remained to be resolved by Cambodia. An additional 107 questions of substantive and clarificative nature on the previous replies to the MFTR were received. On the top of the agenda for the second Working Party was the submission of a National Legislation Action Plan, along with a series of checklists on regulations affecting trade in Services, regulations affecting Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS), and regulations on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Documents prepared for the second WP and interested members included the following: (1) Electronic copy of applied tariff book (Tariff Nomenclature 6 digits); (2) Legislation action plan; (3) Initial tariff offer; (4) Initial Services offer (services commitment); (5) Form ACC/4 (check list on domestic support measures in agricultural sector); (6) ACC/5 (check list on regulations affecting Trade in Services); (7) ACC/8 (check list on regulations related to TBT and SPS; (8) ACC/9 (check list on TRIPS); (9) Written answers to the questions posed by interested members during the first WP.²³

Immediately following the Doha 4th Ministerial Meeting, WTO Director General Mr. Mike Moore visited Cambodia on 27 November 2001 at which time Cambodia submitted its documents for the second WP. During the period of February 6-17, 2002, a second WP was convened giving Cambodia the opportunity to engage in two separate tracks of negotiations - bilateral, multilateral - and to initiate an informal plurilateral meeting on Agriculture.²⁴ In the concluding remarks, the Working Party Chairman, Ambassador Andrea Meloni, upon the motion raised by the EU delegation, has recommended that the WTO Secretariat begin drafting the Factual Summary which will serve as input for the drafting of the Report on Accession for Cambodia.

It is interesting to note that Cambodia was the first LDC to have a Working Party meeting after the Doha ministerial meeting. In his Opening Statement at the Second Working Party, Commerce Minister Cham Prasidh emphasized the importance of this Working Party as the first Working Party of an LDC post-Doha 4th WTO Ministerial Meeting. The Doha Ministerial Declaration (DMD) made specific reference to Para 42, where there are provisions highlighting the need to fast track and facilitate the accession of LDCs. Minister Cham Prasidh reiterated to the Working Party that Cambodia's accession is a test of the sincerity and the intention of developed countries with regard the DMD.

Cambodia has just completed its preparation for the third Working Party meeting which is expected sometime in late July 2002. Documentation for this round includes the submission of a revised National Legislative Action Plan, a revised tariff offer, a revised Services offer, a revised TRIPS checklist, and a series of action plan for areas like TBT, SPS, Custom Valuation for which Cambodia has requested a transitional period. Cambodia is also in the midst of adopting a sub-decree to establish three inquiring points (SPS, TBT, and Services) as well as a WTO rules compliance unit.

While the short-term implications of WTO membership will probably indicate a prevalence of costs over benefits, the long-term benefits stand to outweigh costs by far. Not only does WTO membership provide smaller, more vulnerable economies like Cambodia, with better protection, non-discriminatory MFN treatment, and a recourse to the rule of law, but it also provides much better access to international markets, a boost to domestic reforms and economic development, while at the same time allowing for many exceptions under various S&D clauses and technical assistance.

Lessons Learned From Cambodia's Accession Process ….. The Challenges For Future…

Cambodia’s imminent accession into WTO constitutes a major challenge for the country. Cambodia is required to prepare voluminous and complex documentation regarding its trade regime for goods and services, and will engage in lengthy negotiations with the WTO Member Countries, both at the bilateral and multilateral level. We will also have to carry out legislative reforms to achieve conformity with the requirements of the implementation of the WTO Agreements. Moreover, WTO accession requires thorough understanding of the WTO Agreements ranging from trade in goods and services, to trade-related intellectual property rights, and to trade-related investment measures.

While it is acknowledged by many WTO delegations that Cambodia has made great progress in the preparation for its accession, Cambodia still suffers from shortcomings in the area of Agriculture negotiation, and WTO compliant legislation development. In the Services Offer, Cambodia needs to further its understanding on the policy and economic implications arising from the various services sector commitments like telecom, financial services and professional services, etc.

Cambodia needs to mobilize the necessary resources, both financial and in kind, to cover expenses associated with the accession process, including attendance of meetings, missions to Geneva and bilateral missions, adjustments in national legal and institutional framework, costs of translation services, and revenue foregone as a result of concessions made. Moreover, Cambodia needs to ensure that our concessions and commitments made under the WTO accession process are consistent with other international obligations (e.g. IMF or World Bank loan conditionalities) and are compatible with those made, or to be made, under regional trading arrangements like ASEAN or the Bangkok Agreement. For that matter, frequent consultations with other member countries of regional trading arrangements is really needed to avoid later conflict.

Target: Cambodia aims to be the First LDC to accede to the WTO….Since 1995

At the rate the accession process is moving Cambodia stands a great chance to be the first LDC to accede to the WTO. Nonetheless political will and commitment to accelerate the accession process from Cambodia will not be enough. The WTO should consider the notion of so-called "fast track" procedures for streamline bureaucratic procedures for admission for LDCs as first suggested by the European Union.²⁵

For their part, WTO members should be realistic in their demands for concessions from Cambodia and take due account of its unique financial, economic, institutional and other constraints. Moreover, powerful WTO members should refrain from insisting on “LDC-plus” or worse yet "WTO-plus" obligations for Cambodia, a country that has no current or potential capabilities to become a major player in the world market. They should take into account the internal adjustment shocks that Cambodia will confront when complying with the new rules in the absence of reasonable transition concessions. Just asking for a few reasonable schedules of commitments on goods and services from Cambodia would be perceived as a positive gesture from all WTO Members. Therefore, doing away with the WTO-plus conditions for accession and the automatic extension of Special & Differential (S&D) provisions to Cambodia – as an acceding LDC – would seem to be good starting points.

On a parallel track Cambodia can take advantage of its status as an IF Pilot Scheme country to secure some of the necessary trade-related capacity building both to improve knowledge and implementation of trade rules, and to better exploit the improved market access for its exports. Developed nations should extend their Technical Assistance to Cambodia on a fast-track basis in some specific areas where immediate compliance to WTO rules is needed in line with their pledges made in numerous political statements like:

• The Millennium Development Goals (September, 2000), especially the goal on the development of a Global Partnership for Development (Goal No. 8), which points to the establishment of an inclusive and equitable globalization, which can be best achieved through a “human development paradigm”. The Millennium Declaration includes critical considerations on further developing an open, rule-based, predictable, non-discriminatory trading system, and a commitment to good governance, development, and poverty reduction — both nationally and internationally.
  

• last year's call of the Quad countries regarding WTO Rules and their implementations (May 2001) in which they will "make full use of the flexibility foreseen under the WTO Agreements for LDCs, like the granting of transitional periods for the full implementation of specific rules. While the goal should be the adoption of WTO provisions upon accession, these transitional periods may be applied to the acceding LDCs upon request and presentation of a detailed plan of action for assuring compliance with WTO rules, to be included in the protocol of accession. The implementation of the action plans could be supported by technical assistance."
  

• The WTO Fourth Ministerial Declaration in Doha, Qatar, November 2001 which stressed that "technical cooperation and capacity building are core elements of the development dimension of the multilateral trading system. It provides the mandate and the resources to assist countries to mainstream trade into national plans for economic development and strategies for poverty reduction."

• The Financing for Development  (FfD) Conference (March, 2002) which provided additional opportunities in addressing the capacity needs of  LDCs in relation to trade and poverty reduction. The FfD will allow to move the debate toward a new resource framework which goes beyond ODA and included, among others, mobilization of domestic resources, revenue generated by trade and FDI.

•  .... and possibly more at the next World Summit for Sustainable Development in Johannesburg, South Africa in August 2002 where it is expected that a solid program of action will be firmed up now that new resources had been found in Monterrey, following the European and American decisions to step up development aid.

This section is extensively drawn from a detailed analysis of Dr. Craig VanGrasstek, "Laws and Policies of the United States of America Concerning the Accession of Cambodia to the World Trade Organization," UNCTAD February 8, 2000.

See the “Protocol for the Accession of Cambodia,” in General Agreement on Tariffs and Trade, Basic Instruments and Selected Documents Eleventh Supplement (Geneva, Switzerland: GATT, 1963), pages 12-16. Note that this document does not include the annexes to the protocol (which would consist primarily of the tariff concessions that Cambodia made in the negotiations over its accession).

Tekreth S. Conference Proceedings: Globalization Conference: Business and Law, Preparation for WTO Accession: Experiences and Lessons Learned, June 27-28, 2001, Phnom Penh.

As a sign which reflects the importance Cambodia attached to the accession process Cambodia dispatched a large delegation comprising of 32 and 22 senior officials to the first and second WP respectively.

The idea was followed up by the ECE for economies in transition which had been able to accelerate their internal reforms. The approach would "involve radically streamlined review and evaluation procedures, more frequent meetings of the Working Parties, and flexible, individual schedules for individual countries" (Economic Commission for Europe (ECE) document, Committee for Trade, Industry and Enterprise Development, Fourth Session, 21-23 June 2000).

* * * * *

MAINSTREAMING AND "TRADE-RELATED CAPACITY
BUILDING"

Trade Related Capacity Building refers to:

A coherent set of activities by donors (bilateral and multilateral) and partner countries designed to enhance the ability of policy-makers, enterprises and civil society actors in-country to improve trade performance through policy and institutional strengthening as part of a comprehensive approach to achieve a country’s overall development goals and poverty reduction strategies (DFID 2001, OECD 2001).

The shared view among development economists is that the ability of individual LDCs, and Cambodia is no different from the rest, to participate more fully in the global economy typically is constrained by bottlenecks and limitations arising from 3 main areas: (1) border barriers to trade; (2) the 'behind the border' barriers; and (3) barriers in accessing global markets.  This diagnosis broadly applies to Cambodia and its experiences have shown that despite the success of recent years (Cambodia is the only LDC which has attained the 1 billion dollar export mark), Cambodian exporters often must struggle to remain competitive.  The costs of doing export business in Cambodia are often high. This may be so because some of the pieces of our macro and legal framework are still missing, because the incentives for investment are not always the right ones, because of weaknesses in our physical infrastructure, because of the inordinately high costs of trade facilitation (customs and tax administration reforms are yet fully put in place), or for some other reasons. Thus for Cambodia to consolidate, expand, and diversify its export sector will require opening up bottlenecks and loosening up limitations that, at present, are constraining its development. 

One of the critical findings of the IF Diagnostic Study is that supply bottlenecks rather than market access is a major constraint for trade development in Cambodia. The new multilateral trade regime and capital account liberalization have created an environment in which the most competitive countries gain the benefits of openness.

The competitiveness of Cambodian enterprises and products in world market is a function of the cost structure of their production, their productivity, and exchange rates.  The cost structure is influenced in part by the cost of infrastructure services (telecom, utilities, industrial estates, etc.) by the cost of trade facilitation services (transportation, freight clearing and forwarding), and by direct or indirect export taxes.  Some of those costs are high in comparison to those of competitor countries. Wages and labor productivity are other elements of competitiveness.  Compared to competitor countries, productivity of labor in Cambodia tends to be low as a result of a number of factors including the relatively low skill level of the labor force and the incentive structure for productivity increases.  There is a serious need to develop conditions to promote more rapid productivity growth in the export sector.

Developing new export products and markets requires putting in place also a range of trade support services (trade information, trade promotion, trade financing, and others) to assist exporting enterprises as well as fostering a range of export skills within those enterprises.  The current institutional and human capacity in Cambodia in this broad area is inadequate.

Developing new export products and markets also requires a new entrepreneurial capacity that is also weak in Cambodia. Even if domestic savings are mobilized for investment in the trade sector, there is a shortage of “soft” capital – that is the know-how that entrepreneurs need if they are to succeed.  How to promote the transfer or development of this know-how into Cambodia must be a concern of government and the business community.

If Cambodia is to improve its trade performance it must obviously overcome many of these challenges. Capacity gaps need to be addressed in a wide range of areas, often simultaneously, and an unusually diverse array of stakeholders needs to be engaged.  "Trade rules compliance capacity" is needed to enable Cambodia to improve knowledge and implementation of trade rules while "Trade competitiveness capacity" is needed to enable Cambodia to better exploit the improved market access for its exports. Without technical and financial support to upgrade domestic supply response capability and strengthen the competitiveness of Cambodia’s products, the national economy will not be able to participate in the global one in a way that would benefit to it.

Throughout the entire Diagnostic Study these barriers were identified and sound diagnoses were formulated, adopted and reflected in the a TA matrix. The immediate challenge for the Government was then to maintain the momentum and translate the TA Matrix into concrete realities. The strategy of the Government was to kick start right away a few small initiatives drawn from the TA matrix under some existing fund from the main IF Diagnostic Studies while giving adequate time to prepare larger scale projects for implementation over the mid and long term timeframe. Over the months following the adoption of the TA Matrix, Cambodia has consistently referred to it as a coordination tool in its approach to mobilize capacity building support. In this connection, the TA Matrix is a concrete gauge of success of the IF regarding collaboration and coordination among donors. Many of these activities have come to fruition and as highlighted in the following pages while others are in the making.

For the upcoming CG meeting in June 2002 the Government will seek to take advantage of its status as an IF Pilot Scheme country to secure other necessary trade-related capacity building, both to improve knowledge and implementation of trade rules as well as to better exploit the improved market access for its exports. Some concrete proposals were made by various agencies and are reflected under each agency heading.

LIST OF TRADE RELATED CAPACITY BUILDING UNDERTAKEN OR PROPOSED BY THE 6 CORE AGENCIES AND BILATERAL DONORS.

International Monetary Fund (IMF)

Trade-related technical assistance provided by the IMF focused primarily on trade facilitation issues (customs administration), capacity improvement in tax policy and administration, and on capacity to collect, compile, analyze, and disseminate broad economic statistics and external trade data through reform of the statistical institutional framework.

Drafting of Insolvency Law: The IMF has been assisting MoC in the formulation and implementation of law and regulations in the areas of corporate insolvency as part of its overall legal reform efforts. The project is a sub-component of the IMF’s Cambodia Technical Cooperation Action Plan (TCAP) and  is implemented as a joint IMF/UNDP technical assistance project.

International Trade Centre UNCTAD/WTO (ITC)

ITC has been actively involved in trade enhancement activities, in particular in supply-side development and promoting private sector’s readiness for export, and hands-on training in enterprise development.

Creation of a Trade Support Network: With the support of ITC, and following the outcomes of the ITC’s Executive Forum 2001 in Montreux, Cambodia was able to build from there a Trade Support Network (TSN). This network is a departure from the traditional approach, in which the Ministry of Commerce has attempted to meet most of the trade support service needs of exporters. A wide range of entities, both from the private and public sector, capable of providing trade support services have been brought together, although still at the informal level and on an ad hoc basis.

Membership in the ITC’s World Tr@de Net: On 17 December 2001 the MoC officially established a local World Tr@de Net focal point within the MoC.  Access to this network will enable Cambodian businesses to better manage their participation in trade as a result of better knowledge of the world trading system. Business managers become better informed and can  improve their trade strategies. Moreover, the network will also allow Government officials and businesses to work more effectively together.

South-South Trade Promotion Programme: Demand Surveys for Agro-Products and Processed Foods. ITC has commissioned a demand survey which covered raw material inputs and end-user imports related to the selected products which include food ingredients and fragrances, fruit and vegetable juices, cereal products, oilseed products, apicultural products, spices, confectionary and specialty food products in Cambodia. The principal objective of the demand survey was to provide comprehensive information on the market for the above selected products in Cambodia, with a view to assisting potential suppliers of these products in taking advantage of existing trade opportunities. The outcome of this survey was used by the ITC in a Buyers/Sellers meeting on Agro-Products and Processed Foods last November 2001, at Singapore. In addition to describing market characteristics for the benefit of potential suppliers in Cambodia, the survey also aimed at analyzing the existing constraints in the import sector concerned and at formulating recommendations for action to Government and others having development responsibilities.

Development of Essential Oils and Spices Industry: As part of a series of initiatives to diversify the agricultural sector and in support of the Pro-Poor Trade Sector Strategy, ITC has recently completed an assessment of the potential of Cambodia to enter as an exporter into the international market for essential oils and spices and identified the next steps in the development pathway. For both commodity groups, competition exists between existing suppliers on the basis of product price, product quality and standards of trading service. However, these conditions do not preclude successful market entry by Cambodia with carefully selected commodities. The keys to success are: (i) aiming at the capture of a modest market share of a large-scale international trade, where market access is relatively easy; (ii) selecting commodities that do not pose great difficulties in the acquisition of technical skills for the production of an acceptable quality; and (iii) taking advantage of Cambodia's perceived comparative advantages, especially those of low agriculture labor costs, under-utilized farmland and a keen farmer interest in adopting new cash income generating crops. ITC has a full blown project in the range of $300,000 - 400,000 for submission to the Swiss government or other interested donors.

ITC's Export led Poverty Reduction Programme (EPRP): ITC has selected 6 countries (Bolivia, Cambodia, Namibia, Madagascar, Peru, and Vietnam) to implement the EPR program starting first with 2 sub-sectors: processed agricultural products, and simple manufactured components. The focus of intervention will be support to poor communities in producing export-oriented products (formation of producers' groups, training on entrepreneurial skills, support in the adaptation of products to export market requirements, partnership with micro finance institution to address producers' credit needs).

Industry Strategy in Medicinal and Aromatic Plants: ITC has also expressed its support to assist Cambodia prepare a special industry strategy in medicinal and aromatic plants which they believe Cambodia has the right climate and soil environment to make it a success. This sub-sector can fetch extremely high value as compared to other agriculture crops.

ITC’s Strategic and Operational Market Analysis Tools: ITC produces and disseminates market research and trade analysis for exporters, importers and trade support institutions in developing countries and transition economies. ITC's market analysis activities have focused in particular on the in-depth analysis of international trade flows, with the TradeMap programme and the development of analytical tools for market analysis and trade promotion accessible through two new Market Analysis Portals (Country and Product MAPs).

       a. Country Maps: This application has been designed to benchmark the national trade performance of 184 countries by sectors and specific products on the basis of a broad range of analytical tools. These include ITC's Trade Performance Index on export competitiveness, the National Export TradeMaps on a country's export portfolio, the econometric trade simulation model TradeSim on bilateral trade potential, the relation between trade and employment, and an assessment of the reliability and characteristics of national trade statistics.

       b. Product Market Analysis Portals - or Product MAPs: This application is due to be launched early 2002 and represents a very valuable source of information, on both the quantitative and qualitative aspects of market analysis. Product MAPs consist of 72 product-based portals, covering the trade of 5,000 products in 184 countries, and are a virtual one-stop shop for market analysis, with a particular focus on the needs of developing countries. Product MAPs facilitate the identification of dynamic import markets and competitive exporters, and offer an interactive facility to track international trade flows. Product MAPs also include networking tools, access to market studies, an enquiry reply service and give users the opportunity to establish a direct presence on the net and identify business contacts within a portal dedicated to international trade development.

       c.Trade Support Institution TradeMap - or TSI TradeMap: This interactive tool presents import and export values and quantities, growth rates and market share for 5000 products and 200 countries and allows users to analyze their export /import markets, pre-select priority markets for targeted marketing activities, review the performance of competing countries and assess opportunities for product diversification. As of 2002, TSI TradeMap will also provide tariff and NTBs data.

       d. Market News Service - or MNS: Provides weekly and monthly market prices and analysis for several hundred products in eight product groups. Sectors covered include cut flowers, fruit & vegetables, pharmaceutical starting materials, fruit juice, spices and rice.

       e. PC-TAS: The world's largest trade data base updated annually on CD-ROM, with product-specific export and import statistics on some 200 countries and territories.

       f. Market Brief: Each year ITC publishes concise market reports on export products of interest to developing countries. The Market Briefs provide a market overview, trade statistics and trends, recent market developments, regulations, price information, packaging information, importers' details, important addresses and trade fairs' schedules.

The MoC is currently seeking financial support of US$ 50,000 to acquire all these tools for three years.

United Nations Conference on Trade and Development (UNCTAD)

UNCTAD had been quite active in the provision of policy analysis on trade and investment. Trade-related technical assistance provided so far includes training and support in trade negotiations and implementation of commitments, WTO accessions advice and rules consistency, ports management and customs administration.

WTO Accession: Cambodia considers UNCTAD as the lead agency in providing training and support in trade negotiations and WTO accessions since 1997. Missions were dispatched on a need basis to assist the Government finalize the WTO documents prior to submission to the Working Party. Advice given covers the entire range from WTO replies, tariff of goods offer, services offer, technical checklists  (agriculture, TBT, SPS, and TRIPS), and various plans of action for the last two meetings of the WTO Working Party in 2001-2002.

Translation of Trade Negotiations Materials: The project involves the translation and publications in Khmer of 3 key documents:  "Business Guide to the World Trading System" published by the ITC and the Commonwealth Secretariat, the "Tools for Multilateral Trade Negotiations on Agriculture," and the "Tools for Multilateral Trade Negotiations on Trade in Services." published by the UNCTAD’s Commercial Diplomacy Programme. The project was quite timely and useful as the Cambodian delegation prepared for the third round of negotiation. Moreover a series of training workshops were held for key stakeholders like government institutions involved in the WTO, private sector participants, and civil society organizations including academia.

Study Tours: In 2000-2001 UNCTAD has sponsored several study tours and training for 12 Cambodian officials to in Geneva. Other activities include the launch the World Investment Report in Cambodia, and participation a Seminar on Traditional Knowledge (IP) in India.

English Language Training for Trade negotiators: Cambodia will be eligible for additional technical assistance in the area of English Language Training for Trade negotiators in London and in the procurement of information technology equipment when these project will be approved by donors.

Trainfortrade programme: The Trainfortrade programme is aimed at strengthening training capacities in developing countries, particularly LDCs, in the field of international trade and trade related services. The programme strategy consists of developing partnerships with other training institutions in order to enable a permanent exchange of information, courses, and teachers; developing, producing and updating high-quality training packages that meet the needs of persons involved in international trade, and executives from both state and private sectors; organizing national and regional seminars and training courses in the institutional members of the network. The project will also aim at helping MoC establish an international trade institute in partnership with the private sector and academia. Funding is expected to be secured from the French Government to cover program costs for Cambodia and Lao PDR.

UNCTAD-ICC Investment Guides Project for Cambodia: UNCTAD in partnership with the International Chamber of Commerce (ICC) have initiated a mission to kick start the preparation of an investment guide to Cambodia for the use of potential foreign investors.

Proposed UNCTAD’s IF projects:

Support for WTO accession: Although UNCTAD provided several capacity-building activities such as training of trade negotiators, brainstorming meetings and seminars for Cambodian officials, a lot more needs to be done to assist Cambodia to achieve WTO membership and become an effective player in the multilateral trading system. Therefore, the purpose of this project is to further assist trade negotiators and policy makers in Cambodia through training and technical assistance to participate effectively in the international trading system and, especially, by achieving accession to the WTO and taking part in the Post-Doha trade negotiations.

Review of preferential arrangement in the textile sector: Over the past few years, UNCTAD monitoring and analysis of trade preferences available to Cambodia demonstrates that in many cases a consistent part of Cambodia exports, although eligible for trade preferences (mainly GSP preferences), did not (and still do not) qualify for the preferential tariff rates, thus causing unnecessary payment of MFN customs duties, rejected imports, unnecessary testing, spoilage, legal fees and foregone opportunities in general. Among the factors identified as affecting the effectiveness (i.e. the utilization), of the GSP and of other preferential arrangements, is the lack of understanding or awareness of the preferences available and, more importantly, the technical difficulties encountered in fulfilling the conditions and requirements attached to preferences, among others rules of origin. The present project will assist and enable Cambodia trade officials, exporters, chamber of commerce and the business community in general, to take full advantage of the trade possibilities and opportunities available to Cambodia through the optimum utilization of multilateral and regional and bilateral trade preferences of non-reciprocal or reciprocal nature.

Assistance to the reform of ports: Port Reform Study: The project will review the seaport sector with the objective to identify the reforms required to reduce port related costs and to improve service to port users, thus improving the climate for trade and regional investment. A team of consultants will work with local transport officials and traders to draw up a strategic plan for the port sector that would include a blueprint of the changes required to improve port performance. The study will consider the Governments objectives for the Sihanoukville port, the procedures used for setting tariffs, the role of the private sector, how to encourage competition, and the effect of administrative procedures on port performance and costs. 

Training of port managers (Trainfortrade): The project will focus on Capacity Building for Cambodian port managers under the UNCTAD Port Certificate programme which is a comprehensive training package aimed at preparing new entrants and training qualified managers in all port management issues.

ASYCUDA (assistance to customs): The project will involve the setting up of a pilot ASYCUDA site.

Capacity building in the tourism sector: The project will provide the necessary means to assist Cambodia to develop governmental and entrepreneurial capacities to improve tourism competitiveness, through increased backward linkages with the rest of the national economy. This will provide the country with more income and less leakages of tourism revenues. Therefore the project will contribute to a better use of the Tourism sector as a tool for development and poverty reduction.

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