March 21, 2017

Level the playing field: PM to World Trade Organization

Prime Minister Hun Sen speaks at a session during the Fifth China Round-table conference yesterday in Siem Reap. Facebook

Kali Kotoski and Touch Sokha
The Phnom Penh Post, Tue, 21 March 2017

Prime Minister Hun Sen accused the World Trade Organization (WTO) of operating under a double standard yesterday, claiming the international trade body was applying pressure on small developing economies while overlooking the regulatory breaches of its more developed member states.

Speaking during the opening session of the Fifth China Round Table on WTO Accession in Siem Reap yesterday – a three-day conference aimed at discussing best practices for least developed countries (LDCs) to join the WTO – the premier called for a level playing field.

He claimed LDC members of the WTO exhibited more respect for the organisation’s trade regulations than many members with developed economies, adding that rich nations were unfairly subsidising their agricultural sector and skewing global commodity prices.

“Less developed countries who join the WTO respect its regulations,” he said. “For example, we respect the financial restrictions on funding the agricultural sector, despite it being a huge barrier for us to export to other countries.”

“Rich countries continue to violate WTO rules,” he said.

“So please WTO, do not just blame poor countries for breaking the rules, blame rich countries too.”

In 2004, Cambodia became the first LDC to be acceded to the WTO, along with Nepal. Since then seven more LDCs have joined the international trade body. Another eight have applied for accession, including Bhutan, Comoros, Equatorial Guinea, Ethiopia, Sao Tome et Principe, Somalia, Sudan and East Timor.

Cambodia is hosting the WTO accession conference and was appointed last month as LDC Group Coordinator with a one-year mandate to coordinate the activities of the WTO’s 36 LDC members and eight observers. The Siem Reap conference, themed “Best Practices on the Accessions of Least Developed Countries (LDCs)”, highlights the experiences of member LDC countries to help guide the eight applicants for accession.

Prime Minister Hun Sen threw his weight behind the application of East Timor. He called on WTO members to fast-track acceptance of the tiny Pacific island country, claiming that its economy was better prepared for WTO accession than Cambodia’s was when it joined in 2004.

“I would call on the existing members of WTO to accept East Timor’s request for membership,” he said. “Their current economic situation is better than Cambodia was when it became a member, so why prohibit them from
membership?”

The premier, who previously championed for East Timor to become a member of ASEAN, added that the island nation was qualified for full WTO membership seeing as it had already positioned itself to join ASEAN by establishing embassies in all 10 of the bloc’s member states.

Addressing Cambodia’s own accession experience, Hun Sen said the country paid a price to join the WTO by opening up its sectors to international regulations before it had time to develop them.

However, Moeng Phadenvordeth, deputy director of the WTO notifications and legal compliance Department at the Ministry of Commerce, said he felt the WTO had given Cambodia sufficient time to develop its economy and the Kingdom was now reaping the rewards of liberalised trade.

“The number-one benefit is that we can reach the worldwide export market,” he said. “The other is that the WTO provides flexibility for LDCs to fully implement its regulatory standards to meet all of the trade agreements.”

He noted that Cambodia still has another three years to implement the WTO’s Trade Facilitation Agreement (TFA), which came into force globally in February. The agreement breaks down the barriers of global trade by streamlining cross-border access with electronic single windows and paperless trade systems.

“While we still need to notify the WTO of when we can meet all the TFA’s requirements, we have yet to implement laws, especially in areas of customs management,” he said. “For this we need technical assistance from the WTO so that we can ratify all the protocols.”

However, he added that the TFA framework allows the Kingdom to tackle the barriers in a piecemeal process and it can also enlist the support of development agencies.

David Van, local managing director of the Bower Group Asia, said that while Cambodia’s accession to the WTO in 2004 after two years of concerted negotiations was a record speed for acceptance, other LDCs may not want to follow the Kingdom’s model.

“We were a small devastated economy in a post-conflict era and we didn’t have any sectors to protect, so we basically opened up all sectors to expedite the negotiations,” he said. “Not many countries would or may want to follow Cambodia’s steps in WTO accession procedure as conditions are very different for each country.”

While he added that the TFA could not have come into force at a better time for global trade, given the demise of the Trans-Pacific Partnership (TPP) deal, Cambodia had to act quickly to benefit from it.

“Once fully into force, the TFA is expected to reduce total trade cost by over 14 percent for low income economies and more than 13 percent for upper middle income economies,” he said.

“[However,] Cambodia is unfortunately well behind schedule in some legislation that the country had committed to pass under its WTO obligations for years now, for example e-commerce and consumer protection laws.”

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