Draft Law To Help Protect Cambodian SMEs, Regulate Trade Flows

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The draft trade law, when passed, will help protect small businesses in the Kingdom selling locally made products.

The Council of Ministers on Friday adopted a draft law on trade remedies to protect local producers, businesses, enterprises and foreign businesses operating in Cambodia from imported products being sold below their cost base.

Ministry of Commerce spokeswoman Soeng Sophary said the trade remedies law will protect all businesses in the Kingdom and will regulate the current flow of domestic and international trade and investment in Cambodia. “The draft trade remedies law will not affect the free market. It will affect businesses that sharply reduce prices from their cost base in a bid to fight other businesses,” she said.

The draft law, with six chapters and 44 articles, will protect and help Cambodian enterprises from dishonest businesses and a flood of imported products. It will help build trust and protect local and foreign investors in Cambodia, ensuring honest competition among similar local and imported products.

Te Taing Por, president of the Federation of Association for Small and Medium Enterprises of Cambodia, welcomed the new law, saying it would help local and foreign businesses in Cambodia run smoothly. However, he wondered how the law would be able help to local businesses if imported products are allowed to freely flow into the kingdom.

He said there should be restrictions on imports to help boost local products and make it more competitive. “How can local products compete and survive if the ‘Buy Khmer Products’ campaign is held one day but foreign products can flow into the kingdom on the other 99 days?” he asked. “Other ASEAN countries will not allow products freely into their countries even though the free flow of goods is set in ASEAN principles.”

Chen Sopheap, owner of Keiy Tambanh Khmer handicrafts, welcomed the draft law, saying it could help local enterprises if implemented effectively. She said local products cannot compete with foreign products because the production cost for local products is high and limited in quality, packaging and design. “It is difficult to compete with businesses if they import foreign products to sell in Cambodia at a lower price,” she added.

Sopheap welcomed the ministry’s initiative to support businesses in Cambodia, but suggested to both the Ministry of Commerce and Ministry of Industry and Handicraft to push local products as they cannot compete with imported goods.

Sophary, the ministry spokeswoman, said the draft law would not only target a specific segment such as small and medium-sized enterprises, but that all businesses would have to follow the law. She added that the government would not allow only one player in the market, saying the government wants more suppliers and producers to compete on quality, innovation and price.

A Commerce Ministry report showed that the total trade value in 2016 was $21.93 billion, up about 4.18 percent from $21.02 billion in 2015. Total imports were more than $12 billion – a 5.10 percent increase from more than $11.4 billion in 2015, giving the country a trade deficit of $2.2 billion, or 18.28 percent.

This article was originally published in the Khmer Times.