WTO Trade Pact Poised To Boost Cambodian Exports

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Commerce Minister Pan Sorasak speaking to reporters at the TFA workshop. KHMER TIMES / MAI VIREAK

The US Ambassador has urged the Cambodian government to improve customs procedures and reduce bureaucracy to make the most of the World Trade Organisation’s Trade Facilitation Agreement (TFA). Cambodia has been implementing the TFA, which seeks to expedite the movement, release and clearance of goods across borders, since it came into force in February this year.

Speaking at a workshop on the issue yesterday, Ambassador William A. Heidt said the trade pact is complicated, so could not be implemented in full from day one. He urged Cambodia to work on parts of the agreement that help increase exports and support development in the first instance, particularly in the agriculture sector.

The Ambassador said Cambodia stands to benefit greatly from the TFA, since it is in the WTO’s least-developed countries group. Least-developed countries tend to have a higher level of trade costs and full implementation of the TFA is forecast to slash members’ trade costs by an average of 14.3 per cent.

Exports from Cambodia were worth about $10 billion last year, said Heidt. “When Cambodia has fully implemented the TFA, that could expand by about 16 percent or almost $2 billion. That’s a lot of jobs and a lot of development,” he added.

The TFA is intended to help improve transparency, consistency and predictability of how traders are treated. It should also increase possibilities for traders to participate in global value chains and reduce the scope for corruption, according to the WTO. Developing countries could increase the number of products they export by 20 percent.

Commerce Minister Pan Sorasak said Cambodia has implemented more than 40 percent of the TFA so far. “As the 8th least-developed country to ratify the TFA, Cambodia has demonstrated the desire to improve regional and international trade facilitation by finding ways to expedite movement, release and clearance of goods,” said the Minster.

“Cambodia has been working on improving import-export procedures with the Automated System for Customs Data, so that more than 90 percent of imports are cleared within 24 hours. This is a significant improvement on custom clearance and cross-border trade facilitation.”

Sorasak added that the Ministry has launched online business registration to help eliminate red tape and unofficial fees. It is also working with General Department of Taxation and other government agencies to improve information exchange, with the ultimate goal of having a one-stop shop for all public services, he said.

The Minister said the country will continue to strengthen its legal and regulatory framework to support better trade. “The Ministry of Commerce has been working on six draft laws which are related to trade including the law on e-Commerce, consumer protection, commercial contracts, fair competition, food safety, trade remedies and amending the law on secured transactions,” he added.

This article was originally published in the Khmer Times.