Phased Implementation for LDCs

In the light of Cambodia’s LDC status the accession agreement allowed for a phased implementation of the main WTO Agreements. Cambodia was granted four transition periods delaying implementation of:

• The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (excluding pharmaceuticals and agricultural chemicals) until 1 January 2007.
• The Agreement on Technical Barriers to Trade (TBT) (product standards and technical regulations ensuring the safety of products) until 1 January 2007.
• The Agreement on Sanitary and Phytosanitary Measures (SPS) (measures to protect the health of people, plants and animals) until 1 January 2008.
• The Agreement on Customs Valuation until 1 January 2009.

The Agreement on Trade-Related Investment Measures (TRIMS) was agreed to be non-applicable as the industrial policy measures it relates to (such as local content or export balancing agreements) do not exist in Cambodia, and are not envisaged as future policy instruments.

In terms of market access in services Cambodia adopted a generally liberal stance welcoming foreign involvement except in a very limited number of areas where local initiatives might be threatened. The negotiating team focused on areas that would contribute most to the investment climate by improving those services required by business. For example, Cambodia committed itself to allow foreign firms to operate in the areas of legal services (with some exceptions), accounting, auditing, bookkeeping, banking, management consulting, telecommunications and transport. In addition, Cambodia undertook commitments in areas that will help Cambodians develop the skills needed for a modern, competitive economy. Thus, it committed to allowing foreign firms to provide higher education and adult education services. Also Cambodia undertook commitments in areas it felt would contribute to improvements in health care and in the provision of sanitary, refuse and sewerage services, on the grounds that a foreign presence in these activities can contribute to improvements in public health.

A number of other considerations entered into the negotiators’ decisions on market access for services. Cambodia felt particularly comfortable in taking on commitments in sectors where it had long had an open policy regarding foreign participation and where that policy had served the country well. This was the case, for example, in the banking, tourism, transport, and courier services. Cambodia also felt particularly comfortable in opening up some sectors, where it knew Cambodians could compete successfully with foreigners, for example in guide services. However in a limited number of cases foreign access was denied by reserving part of a market for local small and medium sized enterprises. For example, Cambodia committed to open its hotel market only for hotels of three stars and higher, and committed to allow foreign supply of retailing services only for a small number of specific items or for very large supermarkets or department stores.

Overall, the government believed that from its negotiations for both goods, and access to the domestic services market, it had made a set of commitments that fully reflected its own liberal strategy on trade and investment and that this policy stance was now “locked-in” through the national commitment to the WTO. It felt that for a small economy relatively high levels of protection make little sense, as the scope for an import substitution trade strategy is very limited. In fact, the tariff reforms that preceded the WTO accession were seen as in the national interest, rather than being an externally imposed requirement for WTO entry.

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