Key Lessons

Cambodia’s accession may be unique, for both political and economic reasons, and lessons from it have to be drawn with care. If there is an important lesson of experience to draw it is that each accession case involves a different negotiation with different dynamics.

Lesson 1: Cambodia differs from most recently acceding countries in that it is the first least developed country to have concluded its accession under Article XII of the Marrakech Agreement establishing the WTO. Cambodia is a small economy with a de facto liberal trade and economic regime, and the small size of its economy may pose fewer market access issues for major WTO members. Unlike the People’s Republic of China, which probably has much more bargaining power than all the recently acceding countries taken together, Cambodia has no current or potential capabilities to become a major player in the world market nor to disrupt powerful WTO members’ domestic markets. It posed no economic threat to any of its trading partners and this should have made the accession negotiations easier.

Lesson 2: Cambodia, from the outset, made its position clear that it looked to the process of WTO accession as a positive externality to stimulate and make irreversible substantial trade liberalization and more broadly based reforms.

Lesson 3: The clear policy direction was translated into clear political commitment and that enabled the Cambodian negotiating team to secure political support at the highest level both from the executive and legislative branches. Political commitment is crucial, if not a sine qua non for rapid and successful accession. Without it the lead ministry in charge of WTO negotiations would not have had the mandate to drive aggressively the negotiation process. Political commitment was reflected also in the relative ease in securing budgetary allocations. LDCs by their nature suffer from chronic financial and economic constraints, and Cambodia is no exception. WTO accession demands that the necessary funds in the national budget be allocated for required travel associated with Working Party meetings, missions, and bilateral consultations and negotiations in Geneva. Implementation of laws and policies implies institutional change, and hence requires adequate financial as well as human resources.

Lesson 4: Cambodia must demonstrate to its negotiating partners that it has the capacity and political will to implement the commitments made to other WTO members. After all, admitting Cambodia on the promise that it will deliver on the necessary commitments after its accession is also a matter of trust; new commitments are extensive and require new legislation and an appropriate institutional framework to implement policies related to WTO Agreements. Cambodia has for this purpose established a large task force comprising of over 110 senior government officials—at both the political and technical level—under the chairmanship of the Minister of Commerce.

Lesson 5: Because it is the private sector, which decides how its best interests can be pursued and despite the fact that it is the government that takes on the contractual responsibilities of WTO membership, Cambodia has ensured before, and during, the accession process that a national consensus be secured among all concerned parties, particularly the private sector. Cambodia has probably developed one of the most open engagement approaches to policy dialogue consultations. Active public awareness campaigns about the WTO, its agreements, the accession and the implications of membership were launched. In retrospect, effective cooperation among the executive and legislative branches of government and effective public-private sector partnerships was an essential factor for a smooth accession process.

Lesson 6: It is clear that difficulties existed, and delays occurred, during Cambodia’s accession process. Delays can occur on both sides of the negotiating table. Insufficient knowledge, inadequate experience, limited resources and shallow analytical capacities required for accession negotiations were recurrent sources of delay and procrastination and were complained about often by the Cambodian negotiating team. WTO members, for their part, were also the cause of delays. WTO members have yet to agree on a common approach to the terms of accession, and often express different views on this matter. To illustrate, demands by some members required from Cambodia a higher level of commitment than that made by the original WTO members in the Uruguay Round.

Lesson 7: While the process is inherently time consuming and complex, there are a number of steps that acceding countries and WTO members could take which would facilitate and expedite accession. In the case of Cambodia an aggressive pro-active approach and creative modalities for negotiations were resorted to in order to accelerate the accession process, such as:

• Submission of its National Legislative Action Plan focusing on the requirement for extensive WTO-specific legislation.
• Submission to the WTO secretariat of more than 85 laws, draft laws, and regulatory instruments.
• Establishment of three inquiry points (SPS physically located within the National Codex Committee, TBT within the Ministry of Industry, Mines, and Energy, and Services within the Ministry of Commerce).
• Rectification of obvious contradictions with WTO rules and agreements, especially with respect to the principles of MFN and national treatment, and the readjustment of the trade regime.
• Use of feedback from the Working Party meetings to remove or amend non-compliant legislation and trade practices.
• Working out Action Plans in each of the four areas (TRIPS, TBT, SPS, and Customs Valuation) of the WTO Agreements in which weaknesses in Cambodia’s institutional infrastructure required a delay in the implementation of these provisions. The Action Plans spelt out the specific steps that Cambodia would take to bring itself into full conformity with the rules, and the time frame for these steps.
• Fast tracking bilateral negotiations by traveling to capitals of several key WTO members to engage in negotiation and lobbying.
• Pressing WTO members to reaffirm their commitments to the GC Guidelines and requesting them to drop unreasonable demands, or the so-called “WTO-plus” requests.

Lesson 8: The process of accession represents a great opportunity for local capacity building. Cambodia made active use of technical assistance and consultancies from international organizations, in particular through the Integrated Framework for Trade-related Technical Assistance for Least Developed Countries (IF). This supported the preparation of the required documentation, as well as local human resource development. Local beneficiaries encompassed both public and private sector decision-makers and civil society stakeholders.

Lesson 9: The last and concluding lesson is that Cambodia has used its accession strategy to negotiate and obtain what it judges to be favorable terms of accession, while at the same time protecting its sensitive national interest; for example through retaining the right to allow duty-free imports for exporters and through limited restrictions in the hotel and retail sectors. Indeed, the accession negotiation should be seen as “give and take” rather than “win or lose”. From this perspective the government feels Cambodia has fared relatively well from the process, especially as a small economy, which cannot command much leverage in market access negotiations. However, given that WTO provides an internationally-recognized framework in which Cambodia can organize and carry out the necessary development of its legal and institutional structures and pursue an outward-oriented development strategy, the ultimate test of success rests entirely on Cambodians to rise to the challenge and to turn the accession to the WTO into a potent instrument for accelerated development.

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