WORLD TRADE
ORGANIZATIONWT/COMTD/IF/36
18 September 1998
(98-3583)
Committee on Trade and Development
Integrated Framework for Trade-RelatedTechnical AssistanceOriginal:  English
TRADE-RELATED TECHNICAL ASSISTANCE NEEDS ASSESSMENT
SUBMITTED BY THE KINGDOM OF CAMBODIA
INTEGRATED RESPONSES BY THE IMF, ITC, UNCTAD, UNDP,
WORLD BANK, AND WTO
1
THE KINGDOM OF CAMBODIA
                                                     
1 Published in accordance with the provisions of paragraph 5(e) of the Integrated Framework for
Trade -Related  Techncial Assistance (WT/LDC/HL/1/Rev.1)WT/COMTD/IF/36
Page 2
TRADE-RELATED TECHNICAL ASSISTANCE NEEDS ASSESSMENT
SUBMITTED BY THE KINGDOM OF CAMBODIA
The Royal Government of the Kingdom of Cambodia is actively seeking the rapid integration
of Cambodia into the regional and global economies. It considers international trade and investment
as important instruments for achieving its broad social and developmental objectives.  Trade and
investment  create jobs, alleviate poverty, and bring to Cambodia the skills and disciplines necessary
to increase the earning power of its citizens. The Royal Government understands that the
liberalization of trade and investment throughout  the world economy is creating opportunities that
Cambodia must be able to seize.
The Royal Government has at present a limited capacity to play its role in ensuring that these
opportunities are indeed seized. Under the Pol Pot regime all educated  Cambodians were either killed
or left the country. During the decade after that Regime, Cambodia remained wracked by civil war,and isolated from most of the world economy a nd from the operation of world markets. Although
much has been accomplished  during the 1990's, Cambodia remains woefully short of the skills
necessary to grasp the opportunities for growth and development that have resulted from the
liberalization of trade and investment. The Royal Go vernment has urgent need for technical assistance
and training in all aspects of policy formulation and execution related to trade and investment.
For these reasons the Royal Government welcomes the results of the High Level Meeting on
LDC's Trade Development and in particular the endorsement by that Meeting of the Integrated
Framework. It attaches great importance to situ ating its own discussions with donors within the
context of the Integrated Framework. To begin that process, the Ministry of Commerce -- inconsultation with other Ministries and interested entities and organizations, including those in the
private sector -- has prepared the following asse ssment of Cambodia's technical assistance needs
2. The
assessment is organized according to the "Check-list for Conducting Trade-Related Technical
Cooperation Needs Assessmen t" (WT/LDC/HL/1/Rev.1)
A. TRADE POLICY
(a) What are the sectors that you believe have unexploited or underexploited export
potential?
Cambodia is internationally competitive in three broad areas: tourism; agricultural and
natural-resource-based products; and certain light manufactures requiring for their production
relatively large amounts of cheap and unskilled labour. In each of these broad areas, competitive
exports already exist. However, they could be greatly expanded. In addition, Cambodia could be
competitive in new export products falling within these broad categories.
Tourism is presently centered on visits to Angkor Wat and surrounding temples.  The capacity
of the tourist industry in Siem Reap, the nearest to wn, has been growing rapidly, but further expansion
is both feasible and consistent with maintaining the archeological sites. Cambodia also has an
attractive seacoast, and possibilities for eco-tourism in the Northeast part of the country.  These have
not yet been developed for international tourism.
                                                     
2 Assistance in preparing this assessment was provided through a Mission coordinated by WTO and
made up of staff from ITC, UNCTAD, UNDP and WTO.  The Mission visited Cambodia in March 1998.WT/COMTD/IF/36
Page 3
Cambodian agriculture is not significantly protected from international competition nor
subject to any special support measures. Exports of rice, soybeans and rubber take place on a modest
scale. Expansion of these exports depends heavily on improved grading and quality control. In
addition, recent investment  in palm oil and cashew nuts has occurred with the intent to export.
Agro-industries and aqua-processing are other areas that have not yet been exploited. Developingexport capacities in the countryside would help promote rural development, expand human capacities
and reduce rural poverty.
Light, labour-intensive manufacturing began some four years ago with the garment industry.
While every effort is being made to ensure that  this industry prospers, the impact on the Cambodian
textile industry of membership in WTO and the implementation of the Agreement on Textiles and
Clothing (ATC) is difficult to forecast. Assembly of electronic products has also begun, and could beexpanded. Export of handicraft and silk products needs to be explored.
(b) Could you please define your country’s pers pective of the reasons for any changes in the
structure and direction of exports and imports?
Since 1989 when Cambodia began to re-orient its economy away from a socialist command
system toward a market economy, the structure and direction of trade has changed dramatically.
Previously, trade was heavily concentrated toward the Soviet bloc countries, both for imports and
exports.  State trading and barter trade were prevalent. These practices have now entirely disappeared.
Over the past eight years, imports of materials related to industrial activity have grown.  For
example, in 1996, petroleum, capital equipment and raw materials constituted a large proportion of
imports.  Specifically, petroleum products, road vehicles, textile yarn and fibers, machines for special
industries, electric and general industrial machinery, power generating equipment, nonmetal minerals,
iron and steel, and telecommunications equipment comprised approximately 60% of total imports.ASEAN countries and markets represent a substant ial proportion of Cambodia’s total trade in both
imports and exports, though much of this is entrepot trade through Singapore.  However, garment
exports flow chiefly to the United States and the European Union.  Cambodia has MFN and GSP
status with both of these important trading partners.
Cambodia’s export profile for goods has two main components:  crude materials (wood and
rubber) and garments.  The former represents traditional exports for Cambodia while the latterrepresents a new and rapidly expanding industry in Cambodia.  In addition to garments, the expansion
of exports of basic manufactures also includes some growth in the export of wood manufactured
products.
(c) What have been the objectives of trade po licy in the most recent period, compared to,
say, two decades ago?
As is the case with its trade profile, Cambodia’s trade policies have undergone enormous
changes in the past 20 years.  From 1979 to 1989, trade policies were designed to support a socialist
command economy.  In addition, industrial development was stagnant.  Soviet bloc countriesrepresented Cambodia’s major trading partners.  Trade was effectively controlled through quantitative
restrictions and state-owned trading entities.  In addition, private ownership of property was not
permitted.  The transition to a market economy began in 1989 and accelerated with the adoption in
1993 of the new Constitution stipulating a market economy and the  formation of the Royal
Government of Cambodia.
The goals of trade policy since 1993 have been to establish a liberal trade regime; increase
integration with the regional and global trading system (entry into ASEAN and WTO are important
components of this strategy); promote investment; support the development of export-oriented
industries; expand employment opportunities; and spur economic growth to reduce poverty.WT/COMTD/IF/36
Page 4
Restrictions limiting the ability of companies and individuals to engage in international trade were
lifted.  Providing tariff protection to import-compe ting industries has generally not been an objective
of trade policy. However, the sharp depreciations in the exchange rates of major trading partners that
occurred in 1997-98 was countered by limited and temporary increases in some import tariffs.
 (d) What are the Ministries in charge of trade policy matters, including formulation,
implementation, enforcement and monitoring?  How is coordination made?  What are the
respective roles of the relevant Ministries (give particular attention to tariff policies and other
policies directly affecting exports and imports of goods and services)?
The following ministries and agencies are most directly involved in trade policy matters:
Ministry of Commerce (MoC), Ministry of Ec onomy & Finance (MEF), Ministry of Industry,
Mines & Energy (MIME), Ministry of Agricult ure (MoA), Ministry of Planning (MoP),
National Bank of Cambodia (NBC) and the Coun cil for the Development of Cambodia (CDC).
Inter-ministerial coordination is pursued through va rious formal and informal mechanisms.  Examples
would include the Council of Ministers (with representation from every ministry), various
issue/sector-specific working groups addressing matters such as trade in services and non-tariffbarriers, a National AFTA Unit that addresses issues related to the ASEAN Free Trade Area, an
inter-ministerial coordinating committee on WTO accession, and other ad hoc bodies. Interministerial
coordination still requires further strengthening so as to improve the coherence and consistency of
policy, and avoid overlapping functions among Ministries.
Among these ministries, MEF has chief responsibility for fiscal and financial policy,
including tax, customs and tariff policies; MoC is involved in international trade policy (including
tariff policy) and is responsible for the registration of companies doing business in Cambodia; MIME
is responsible for industrial policy; MoA addresses agriculture, forestry and fisheries; MoP manages
socioeconomic development planning and statistics; the NBC oversees monetary policy; and CDC isdesigned to act as a “one-stop shop” for in vestment in Cambodia.  Through its Cambodia
Rehabilitation and Development Board, CDC handles international assistance and public investment,
and through its Cambodian Investment Board (CIB ), CDC manages private investment in Cambodia.
In addition, the Ministry of Health is responsible for regulating the import and sale of drugs and
pharmaceutical products.
(e) How are the private sector and academic in stitutions associated with the formulation
and conduct of trade policy?
For the most part, private sector and academic institutions have not been heavily involved in
the formulation and conduct of Cambodia’s trade pol icy.  One notable exception is the Cambodian
Garment Manufacturers Association with which the Ministry of Commerce regularly consults withrespect to garment and textile-related issues of trade policy.  While there also exist a Phnom Penh
Chamber of Commerce, a Faculty of Business, Faculty of Economics and Faculty of Law within the
university system, these latter groups have not yet been drawn into dialogue with the government on
trade-policy matters. There are also three research institutions located in Phnom Penh that have been
involved to varying degrees in promoting public discussion of trade-related policy issues.
(f) What are the institutions in your country th at can play a role in implementation of a
trade- related project at the local level?  State their respective roles.
Except for the various national institutions of the Royal Government of Cambodia, there are few
institutions at the local level that might play a ro le in the implementation of trade-related projects.
The Ministry of Commerce, the Ministry of Industry, Mines and Energy and the Ministry of
Agriculture have offices in the provinces and municipalities and, depending upon the nature of the
project, the research institutions noted above that are involved in trade-related activities may have
some capacity to be involved at the local level. Numerous NGOs have experience with projectWT/COMTD/IF/36
Page 5
implementation in the provinces. In addition, local village development committees (VDCs) have
been formed in many provinces to exercise responsibility for development planning within their
localities.  Similar committees also exist at the distri ct level in some provinces.  Their capacity to play
a role would have to gauged for any specific trade-related project.
(g) What are the main laws and regulations dealing with trade policy on exports and
imports?  Please provide a short description of each.
The legal system in Cambodia is in the midst of a substantial and difficult transition. The goal
is to establish a coherent, transparent and predictable legal framework that will support the
development of a modern market economy. While a number of important economic-related laws have
been enacted since 1993, there remain major gaps in the legal framework. There have also beenserious difficulties in securing adequate implementation and enforcement of laws, owing, among
other things, to the low levels of legal understanding and generally low capacities of persons working
within the legal system. The following laws and regulations are relevant to Cambodia’s trade policy:
Customs Law: The present legal basis for the administration of Customs dates from the State
of Cambodia,3 and  is badly out of date. A new Customs Code is being drafted, and assistance is
required in ensuring that it meets current international standards.  Reforms in 1993 created a
cascading, five-band system of tariffs ranging from 0% to 50% which covers the vast majority of
products (though a limited number of products retain other tariff levels).  A tariff rate of 7% applies to
inputs for domestic production, a 15% rate applies to capital goods, a 35% rate applies to productsrelated to industries with “infant industry” potential, and a 50% tariff for certain key consumer goods.
The tariff nomenclature, which conforms to the Harmonized System, is presently being updated to
ensure conformity with ASEAN and HS 96.
1. Law on Taxation (1997):   In addition to establishing a transparent, well-defined
system of income tax, the 1997 law also includes a VAT tax to be implemented
beginning in 1999.
2. Law on Registration of Companies (1995):  requires the registration of all companies,
foreign and domestic, with the MoC.
3. Law on Investment (1994):  provides various incentives to foreign and local investors
on a non- discriminatory basis including:  a 9% corporate income tax; tax holidays up
to 8 years; full import duty exemptions for export-oriented projects (defined as export
enterprises that export at least 80% of their output); free repatriation of profits;
guarantees against nationalization and price controls; no withholding tax on
dividends; and a five-year loss carry-forwar d.  The law also lays out basic procedures
for investment approvals and resolution of disputes.
4. Sub-decree on Implementation of the Invest ment Law (1998):  provides more detailed
procedures for investment applications and approval including rules on application
fee and deposits, feasibility studies, the revocation of investment privileges andincentives, the formation of joint ventures and taxation.  The Sub-Decree also
provides a more extensive list of suggested areas of investment and a criteria matrix
for incentives.
5. Chamber of Commerce Law (1995):  in addition to creating a Chamber of Commerce
in Phnom Penh, the law states that the Chamber of Commerce  has a responsibility to
                                                     
3 The State of Cambodia and its predecessor, the Peopl e's Republic of Cambodia, administered most of
Cambodian territory between 1980 and 1993.WT/COMTD/IF/36
Page 6
play a role in the resolution of business disputes, but no such role has been played to
date.
In addition, draft laws in the following areas exist:  contract, bankruptcy, business
organizations, arbitration, trademarks, products li ability, (prepared by the Ministry of Commerce);
establishment of a commercial tribunal (prepared by the Ministry of Justice); insurance and customs
code (prepared by the Ministry of Economy and Finance); factories, industrial zones authority, and
patents and industrial design (prepared by the Ministry of Industry, Mines and Energy); copyright
(prepared by the Ministry of Culture).
(h) What are the main instruments of trade policy on exports and imports?  Please
elaborate.
The main instruments of trade policy affecting import/export activity in Cambodia are as
follows:
- Tariffs:  as noted above, the Cambodia’s present tariff schedule was promulgated in
1993 and follows the harmonized system of tariffs.  There are 5 main tariff bands
which cover the vast majority of items (though technically 8 bands exist).  The
highest tariff rate is 50% and applies to selected consumer goods.  In fact, 3 tariff
bands -- the 7, 15 and 35 percent rates -- cover over 90% of Cambodia’s tariff lines.
All duties are applied on an ad valorem  basis.  The import-weighted average of duties
is 16% (19% if gold and silver are excluded). All imports are subject to a 4 per cent
consumption tax. In addition, some items (beer, wine and spirits, motorcycles,
cigarettes, petroleum) are subject to special consumption taxes. Identical rates of
taxation are applied to domestically-produced products. There are no tariff quotas,
and tariff exemptions exist for certain categories of importers including diplomaticmissions, projects qualifying for import exemptions under the Investment Law
(requires written permission of CDC or Council of Ministers) and recipients of
exemptions granted on an ad hoc basis.  Reliable information on the incidence of
these exemptions is not available.  Customs valuation is based on transaction values
on a CIF basis. For all imports so covered, customs agents are required to accept the
values determined by pre-shipment inspection (see below).
- Pre-Shipment Inspection:  since 1995, pre-shipment inspections (PSI) have been
required for imports with a declared total value or actual value of US$5,000 or more.
Certain exceptions apply covering precious stones and precious metals, objects of art,
live animals, explosives, current newspapers/periodicals, household and personal
effects and cigarettes (however, require ap proval from MEF).  In addition, garment
export industries are exempted from PSI without limitation, and imports of all CDC
approved investors are temporarily exempt.
- Import Restrictions:  In general, no import licenses exist (they were abolished in
1993), and import restrictions only exist for weapons, explosives, munitions, military
machinery, gold and silver (requires a permit from National Bank of Cambodia),
drugs and poisonous substances.
- Registration Requirements:  All commercial enterprises operating in Cambodia are
required to register with the Ministry of Commerce whether or not they engage in
international trade.  Companies that are 51% Cambodian owned are permitted to
freely engage in all export and import activities.  Foreign-owned enterprises--those
that are less than 51% Cambodian-owned--are not permitted to engage in purely
trading activities, i.e. they cannot import goods for the sole purpose of re-selling them
without transformation.   Foreign enterprises registered with MoC and CDC canWT/COMTD/IF/36
Page 7
engage in those import and export activities required by their business.
Representative offices are not permitted to engage in commercial activities.  A branch
or subsidiary of a foreign company, upon registration with MoC, is permitted to
conduct commercial activities in Cambodia.
- Export Restrictions:  Exporters organized as Cambodian companies are permitted to
operate without restriction, except as regards the following items: antiques
(absolutely prohibited); round logs (absolutely prohibited);  and narcotic drugs and
poisonous substances (absolutely prohibited).
- Export Licenses:  Rice, wood and wood products  are subject to export licensing
requirements.
- Export Credits, Guarantees and Government Insurance Programs:  do not exist in
Cambodia.
- Sanitary and Phytosanitary Measures:  licenses from the Ministry of Health are
required for imports and sale of medicine.  In addition imported live animals must be
certified regarding proper vaccinations, and imported plants must have a
phytosanitary certificate.   Otherwise, there are normally no special quarantines or
restrictions.
- Privatization of State Enterprises:  has been ongoing since 1991.  An inter-ministerial
privatization committee led by MEF was established in July 1995 and is charged with
preparing a privatization program to include a list of all remaining state enterprises,
strategies for their privatization and procedures for monitoring the process.  The
Committee drafted privatization regulations in September 1995. Of  the  157 StateOwned Enterprises that existed in the late 1980s, 99 have been privatized and one has
been closed. Of the 57 remaining State Enterprises, current plans of the
inter-ministerial committee call for 18 to be privatized, 5 to remain as joint ventures,
17 to be closed, and 17 to remain as State Enterprises.
(i) In case you are a WTO Member or are in the process of acceding, how is your country
preparing itself to comply  with the WTO Agreements?
Cambodia has already undertaken major steps towards trade liberalization, and in the process
has dismantled a number of features of its previous trading regime that would raise issues in terms of
the WTO Agreements. For example, customs valuation now takes place normally on the basis of
invoice values, rather than on the basis of an indicative price list; quantitative restrictions on importshave been abolished; licensing of imports is restricted to the usual list of sensitive items, and is not
designed to restrict the volume of imports; Cambodia no longer has any state trading as defined by
ART. XVII of GATT 94 and the WTO Understanding on ART. XVII; subsidies to the agricultural
sector have been discontinued; taxation policy has been reformed to observe the principle of national
treatment; all policies regarding trade in goods are applied on an MFN basis, etc.
Cambodia is putting in place the legal framework necessary for a market economy. Again, in
the process it is acquiring the capacity to implemen t obligations it will take on when it becomes a
member of WTO. For example, draft legislation on protection of trademarks is under preparation in
the Ministry of Commerce, and draft legislation dealing with other aspects of protection of intellectualproperty rights is being prepared in other Ministries.WT/COMTD/IF/36
Page 8
(j) What is the state of familiarity with the WTO framework:  among government and
government-related agencies; in the private sector?
Familiarity with the WTO framework is still rudimentary. A small number of officials in the
Ministry of Commerce have received repeated training from WTO and others. A broad spectrum ofgovernment officials received training at a recent WTO national seminar. This same spectrum has
been dealing with the country memorandum required by the accession process. A few officials outside
the Ministry of Commerce have thus come into contact with those aspects of the WTO framework
that impinge on their responsibilities.
Private research institutes dealing with economi cs have so far focused on the implications for
Cambodia of ASEAN membership, which, during the past two years, has been the main topic ofpublic discussion in the field of trade.
In the enterprise sector, manufactures exporters are generally well aware of WTO issues
relevant to their business. For example, garment exporters, all of whom are foreign investors,  are
familiar with the ATC. There is no evidence that smaller exporters, exporters of primary commodities
or importers are familiar with WTO.
(k) What are your technical assistance require ments with regard to your compliance with
the WTO Agreements?
Technical assistance needs are concentrated in two areas: the WTO accession process and the
creation of a satisfactory legal framework.
There is need for ongoing support to the accession process, which would include help with
the mechanics of accession (preparation of the country memorandum, advice on negotiatingstrategies, etc.); further training and familiarization for various audiences; and assistance with
eventual compliance issues.
There is also need for ongoing support for the drafting of laws relevant to a market economy
and in particular to compliance with WTO obligations. This needs to be supplemented by assistance
designed to facilitate the prompt implementation and enforcement of these laws.
(l) In which specific areas of the WTO Agreements do you have technical assistance needs?
Cambodia needs assistance in the following specific areas: ATC, market access, rules of
origin, safeguards and services (initially as regards choice of sector in which to make a market access
offer), technical standards, protection of patents and copyrights.
(m) What is your assessment of your existing trade analysis and negotiating capacities, both
multilateral and bilateral, in areas alread y covered by the WTO Agreements and other
trade-related areas, e.g. competition policy and trade and environment?
The capacity for trade policy analysis is not sufficiently deep or widespread within the
government. Further training is required in a number of areas, in particular the interfaces between
trade policy and industrial policies, and between trade policy and public revenue policy. The
relevance to trade and industrial policies of concepts such as comparative advantage and effective
protection needs to be more broadly understood. Also , techniques need to be developed for evaluating
the revenue consequences of tariff reductions, both on a preferential and MFN basis. The techniques
for processing the raw trade data generated by Customs and presenting the data in a way that allows
them to be used for trade policy purposes are lacking and  are urgently required. Because of the
interfaces between trade policy and other aspects of economic policy, there is need for assistance in
creating mechanisms to bring about better coordination of the policies of the various economicWT/COMTD/IF/36
Page 9
ministries and agencies.  At the same time, support to help reinforce existing institutional mechanisms
for addressing trade policy is essential.  For example, a National AFTA Unit exists to prepare for and
implement AFTA once Cambodia joins ASEAN.  However, few members of the Unit possess the
necessary understanding and experience in cataloguing non-tariff barriers (NTBs) and monitoring the
dismantling of unduly obstructive NTBs, a requireme nt of AFTA.  Training on NTBs would be highly
useful.  This is just one example of the kind of training needed to build up trade-related institutional
mechanisms and inter-ministerial bodies.  In addition, sector-specific studies and needs assessments
targeting key sectors of the Cambodian economy would be highly useful.  Such sectors might include:
agriculture and agro-industry, the informal sector and services sectors, in particular as regards the
policies required in the light of prospective membership in WTO and ASEAN.
Information on services is often not available, and the capacity to analyze services issues in a
WTO framework has not been developed.
Cambodia has no analytic capacities in the areas of competition policy and trade and
environment.
Negotiating capacities in a bilateral setting exist at the senior level; there has been no
experience in multilateral negotiations.
(n) How is your country preparing itself for ASEAN membership?
Since 1996, Cambodia has been actively preparing fo r integration with ASEAN.  Institutional
mechanisms and entities have been established with specific responsibilities for ASEAN matters
including ASEAN departments in key ministries su ch as MEF and MoC and inter-ministerial bodies
such the National AFTA Unit.  ASEAN department s in the three lead ministries received some
limited budgetary resources in 1997 for ASEAN preparations.  Officials in these entities havereceived orientations on ASEAN and specific introductory training on AFTA, cooperation in services
and commercial law reform.  In mid-1997, the Council of Ministers formally forwarded a set of 21
ASEAN agreements to the National Assembly for approval of an instrument of accession in
anticipation of ASEAN entry.  The National Assembly has not yet taken action on these agreements.
The National AFTA Unit prepared an initial dr aft Inclusion List (IL) for AFTA/CEPT in July
1997. It is currently considering revisions to the IL and is compiling initial drafts of the TemporaryInclusion, Sensitive and General Exceptions Lists.  The National AFTA Unit has also discussed an
initial macro-economic assessment of AFTA's implications for Cambodia prepared by two outside
consultants.  In addition, as mentioned earlier, MEF is preparing a draft of a new customs code and
updated tariff nomenclature for Cambodia are being prep ared by MEF.  An informal, inter-ministerial
working group has also compiled an initial list of non-tariff barriers for review and comment by the
ASEAN Secretariat.
Activities to educate officials and the public about ASEAN and the implications of
membership have been conducted, including:  the presentation of two public forums on ASEAN (to
live audiences and on national TV), the publication of books on ASEAN in the Khmer language fordistribution to officials, university faculties and the public.  One publication includes the first Khmer
translations of all key ASEAN agreements.  This book will be used by the National Assembly for its
eventual consideration of accession to these agreements.
Most of these preparatory activities have been supported by UNDP Cambodia's ASEAN
Project, which is currently scheduled to terminate in July 1998 (mainly for budgetary reasons).  Two
research institutions have also organized various conferences and events related to Cambodia’s
integration into ASEAN. There is currently no commitment by any donor to launch a long-term
program of in-country, ASEAN-related assistance, despite the fact that such assistance has proven
highly effective (and cost effective) and useful as Cambodia prepares for ASEAN integration.WT/COMTD/IF/36
Page 10
(o) What is the state of familiarity with the ASEAN framework: among government and
government-related agencies; in the private sector?
There is a relatively small core of officials who have a strong familiarity with ASEAN's
history, structure and cooperative framework, and these officials are largely within MFA, MEF and
MoC.  On technical matters -- especially with re gard to ASEAN economic initiatives -- the number of
officials fully understanding the substance, requirements and direction of such matters is even more
limited.  For example, there may be a few as 4-6 offi cials with a clear understanding of AFTA and the
issues involved in its implementation.  Among the various line ministries, familiarity with ASEAN is
very limited, even among officials designated as the ASEAN focal points for ministries.  It is clear
that an ongoing comprehensive program of training, especially on economic matters, will be requiredover the medium term.
Certain independent research institutions  have had substantial exposure to ASEAN and have
organized a wide variety of ASEAN-related act ivities such as workshops, conferences and
publications on ASEAN topics for officials, the private sector and other entities such as universityfaculties.  Though often very informative, such activities typically do not address ASEAN cooperation
at a technical or operational level, instead focusing on larger questions of policy and directions within
ASEAN and their implications for Cambodia.
The private sector has had very little exposure to ASEAN and hence familiarity is generally
very low.  To the extent that representatives of the private sector were involved in the Second Public
Forum mentioned above or watched the televised broadcasts of the forums, they would have received
some basic information on ASEAN.  However, no sustained set of activities has been created to fully
engage the Cambodian private sector in the ASEAN dialogue in Cambodia or help the private sector
understand some of the business implications of ASEAN cooperation.
(p) What are your technical assistance require ments with regard to your compliance with
ASEAN agreements?
Since Cambodia is not currently a member of ASEAN, there are immediate technical
assistance needs leading up to entry and vital technical assistance needs in the immediate post-entry
period, in addition to important medium-term needs for support.  Concerning compliance withASEAN agreements, technical assistance needs would include training and advice in areas such as:
customs procedures (including systematic enforcement), regularized application of tariff
nomenclature, rules of origin, valuation systems, non-tariff barriers (NTBs), intellectual property
issues, ASEAN initiatives on investment cooperation, and the application of ASEAN agreements on
services including key sectors such as financial services. Difficulties are being encountered indeveloping approaches to services within the context of ASEAN.
There is a critical need to receive ongoing technical assistance with regard to the legal
implications of negotiating, acceding to and impl ementing ASEAN agreements.  Although each of the
three lead ministries for ASEAN integration— MFA, MEF and MoC—has a legal department, the
legal capacity of officials is especially limited.  And no officials have the experience and training to
evaluate and advise these ministries on the legal implications of their ASEAN work.  This places
Cambodia is a very difficult position with regard to negotiating and complyin g with the large number
of ASEAN agreements to which it will accede or which it will ratify in the near future.  In sum, there
are significant needs with respect to creating a legal framework consistent with the obligations of anASEAN member.
Technical assistance needs also include training and input with regard to the mechanics of
acceding to and implementing ASEAN agreements such as:  the preparation of the country
memorandums, position papers and legal evaluations; advice on negotiating strategies andWT/COMTD/IF/36
Page 11
preparations; and dispute settlement. Training and familiarization with compliance issues for specific,
more technical ASEAN agreements will also be necessary.
(q) In which specific areas of the ASEAN Agreements do you have technical assistance
needs?
With regard to most ASEAN agreements, assistance in conducting national level analysis of
requirements, commitments and implementation is  needed.  In relation to this, assistance in
understanding the legal implications of accession to various ASEAN agreements—e.g., how domestic
legislation will need to be reformed—would be beneficial.
Concerning ASEAN's AFTA/CEPT Agreement, trai ning and other assistance is required to
ensure that the mechanics of implementation—e.g., setting up a "green lane" system, applying
ASEAN rules of origin and procedures to remove NTBs—are well understood.
In addition, there is a serious need to assess the sectoral implications of AFTA for Cambodia.
To follow up on the initial macro-economic assessment conducted, a set of sector-specific studies areneeded to provide a greater understanding of AFTA's potential impact and opportunities for:
agriculture, small and medium-sized enterprises, industry, investment (particularly in light of
ASEAN's creation of the ASEAN Investment Area), the informal sectors and light manufacturing.
More substantial assessments of how to design Cambodia's product lists for CEPT to maximize export
growth, promote industrial development and ensure adequate revenues are also needed.  Moreover,AFTA's potential impact on Cambodia's employment profile is another key issue that has thus far
received little attention or study, despite its importance for Cambodia's larger development objective
to reduce poverty.  In addition, no serious studies have been conducted on the budget revenue and
balance of payments implications of AFTA. In order to understand the potential gains in market
access, it is also important that the CEPT lists are formulated taking into account the CEPT lists ofother ASEAN members to which Cambodia hopes to in crease exports for specific goods.  Cambodia
would benefit from assistance in carrying out a study that focuses on the connection between
Cambodia's CEPT lists, market access and the export potential for specific goods.
With regard to investment and intellectual property, there is a need for greater conceptual
understanding of these areas including basic terminology, policy developments and options, and
practical implications (regulatory or operational).  With regard to services, training focused on theseven key services sectors for ASEAN cooperation, formulating and evaluating services regimes and
related information, and services negotiations would be highly useful.  In addition, training on the
ASEAN Dispute Settlement Mechanism will help familiarize officials with this new agreement.
(r) What is your assessment of your existing trade analysis and negotiating capacities in
areas already covered by ASEAN Agreements?
Given the very limited experiences that Cambodian officials have had in international
negotiations, especially on matters of trade and economic cooperation, current negotiating capacities
among officials is severely limited.  This is particularly true with regard to multilateral negotiationssuch as those conducted by ASEAN.  This situation is compounded by the fact that relevant trade and
economic data can be difficult to obtain, and few officials have been trained in trade analysis and the
use of such data in formulating trade strategies and conducting trade negotiations.  In general,
capacities to address technical issues—in terms of basic understanding, policy and data analysis,
negotiations—require major strengthening in nearly every area of ASEAN cooperation.WT/COMTD/IF/36
Page 12
B. OBSTACLES TO TRADE EXPANSION
Supply Constraints, including Institutional Bottlenecks
(a) What are the main bottlenecks inhibiting the development of sustained export capacity
of goods and services?
Cambodia faces numerous problems inhibiting the development of a sustained export
capacity.  Such constraints fall into two categories:  (1)  those related to the private sector's domain
and (2) those more governmental in nature.  Clearly, the main obstacle to export development (and
Cambodia’s development generally) is the low level of human resources and skills; this constraint
applies with equal significance to both the public and private sectors. As a result, there are too fewpeople with strong educational backgrounds and experiences, there are high rates of illiteracy, low
vocational skills and weak systems of formal and informal education.
Constraints implicating governmental responsibilities would include the lack of physical
infrastructure in Cambodia.  Roads, power supplies, water systems and telecommunications systemsare relatively weak. Transport, power and communications costs are all high by international
standards. A port exists at Sihanoukville on the Gu lf of Thailand with a sealed road connecting the
port city to the capital Phnom Penh, which also has port facilities on the Tonle Sap River and a dry
port located 10 kilometres from Phnom Penh.  Other roads connecting Cambodia’s major cities and
border crossings are in a poor state.  An oil terminal controlled by the Excise Dept. exists on theMekong River.
Other public sector-oriented constraints to developing export capacity include:  (i) problems
with institutional coordination and cooperation among government ministries and agencies involved
in trade; (ii) problems related to customs and tax administration (this issue has been highlighted by theprivate sector); (iii) continuing security problems;  (iv) an incomplete legal framework and difficulties
in the application of laws; and (v) an inadequate capacity to promote industrial sector development
and to attract foreign direct investment.  All these problems have been specifically noted by the
private sector.  The government is striving to loosen the constraints that fall within its areas of
responsibility.
Private sector-oriented constraints include:  (i) the lack of quality management; (ii) the lack of
access to current market and trade-related information both from within and outside Cambodia; (iii)
lack of access to modern communications for most Cambodians outside the capital (80% of the
country’s population lives in the countryside); (iv) scarcity and prohibitive cost of credit from the
financial sector, especially for rural and small-scale industries and enterprises; (vi) lack of product
marketing support services and information;
(b) Are there any institutional bottlenecks whic h may impede the efficient conduct of your
country's trade policies?  Provide details.  For example, what are the problems perceived by the
different actors, e.g. exporters, producers, service providers, professional associations and
Ministries?  Are problems mainly perceived in the area of:  human resources; management ofthe institution; financial and material resources; communication?
There are three major institutional constraints which impede the efficient conduct of trade
policy in Cambodia:  (i) insufficient strong, consistent, transparent and regularized coordination and
communication among government ministries and agencies; (ii) the low skill levels among publicofficials; and (iii) various weaknesses in trade facilitation.
Officials involved in trade policy-making and implementation lack sufficient skills, training
and experience to effectively carry out their duties, or often even understand their role in the
development and implementation of trade policy.  The training needs for the civil service areWT/COMTD/IF/36
Page 13
enormous and require the development of a systematic, comprehensive training program designed for
the key ministries involved in trade policy.  Due to the lack of strong inter-ministerial coordination,
policy-making is often not fully coherent, fully informed or completely consistent.  In addition, the
organizational structure of some ministries is inefficient and they are therefore not fully adapted to
their role in a market-oriented economy.  The lack of adequate financial and material resources withinthe government only exacerbates these problems.  Insufficient public resources are currently made
available to the ministries to pay a living salary, provide adequate training opportunities to officials
and provide supplies and equipment to support their daily work (including sufficient, reliable  and
efficient communications equipment to ensure easy contact among public institutions and the outside
world).  Over the medium term, it is expected that the government will have difficulty generating
domestic income to finance such human resources development, institution building, improved
infrastructure and trade promotion/facilitation activities.  This only underscores the crucial linkbetween trade, development and investment in Cambodia.
(c) What are the main bottlenecks to export diversification?
The major bottlenecks to export diversification are similar in nature to the constraints to
export development discussed in (a) and (b) above.  Key bottlenecks include the unskilled and
inexperienced work force, low levels of capitalization, limited access to credit, technology and market
information, incomplete legal framework, poor physical infrastructure, inadequate system for ensuring
technical quality and safety standards,  high energy and communication costs, and low capacities to
promote industrial development and attract foreign direct investment. Many of these bottlenecksbecome particularly severe in the countryside, an d thus weigh especially heavily on the development
of export production in rural areas.  As this lis t of constraints demonstrates, the development and
diversification of Cambodia’s exports will requ ire massive, new private and public investment in
Cambodia.  In the short to medium term, most of th is investment will have to be foreign investment.
(d) If investment in the production of goods a nd services is inadequate, what are the main
reasons?  Please elaborate.
Among the issues noted above, the main reasons for inadequate investment in Cambodia are:
security concerns and perceived political instability; incomplete legal framework (including a legally
uncertain land tenure system); weak human reso urces; poor physical infrastructure; outdated
technology; limited enterprise development; difficu lty meeting quality standards; the high costs of
energy and communications; difficulties in securing  transparent and consistent government
decision-making; and a weak financial sector.
(e) Is there a national policy to encourage export-related investment opportunities?  Please
elaborate.  What arrangements are in place fo r reviewing, drafting and negotiating contractual
arrangements with foreign investors?
Cambodia has a policy to promote export-related investment opportunities that is effected
through its Investment Law.  As detailed above, th e Investment Law provides substantial incentives to
investors in export-oriented ventures (i.e., projects that will export at least 80% of their output).Contractual and other arrangements with foreign in vestors are primarily finalized with the CIB within
the CDC, though certain ministries and the Council of Ministers are sometimes directly involved in
negotiating and drafting contractual arrangements for specific foreign investment projects.
(f) What are the main obstacles to the transfer, development and acquisition of technology?
Is there any national policy/strategy in this area?  Please elaborate.
One major problem in attracting and acquiring technology in Cambodia is the low level of
human resources available to use and apply new technology.  Cambodia has no formal policy or
strategy with regard to technology transfer.WT/COMTD/IF/36
Page 14
(g) What are your technical assistance or oth er assistance needs with respect to supply
constraints?
Technical assistance needs are substantial with respect to addressing supply constraints.
Assistance is required in formulating approp riate strategies for  promoting industrial
development.  Assistance is needed in such tasks as: preparing draft laws, decrees and regulations to
implement an appropriate strategy; formulating concrete programs for constructing and managing
industrial estates and for organizing an Industrial Zone Authority; formulating appropriate policies for
the promotion of small and medium sized enterprises, and translating these policies into  necessarylaws and regulations; formulating a strategy for entrepreneurship development and making it
operational; devising specific programs to foster small-and medium-scale agricultural production for
export; strengthening capacities as regards industrial standards activities and the establishment of an
Industrial Standards Institute; and establishing certification schemes as regards ISO 9000 and ISO
14000.
Assistance is also required in the development of essential infrastructure. As regards energy,
there is need for assistance in basic energy development planning and in power project management.
There is also need for assistance in developing strategies, institutions and mechanisms for the
management of petroleum resources. Training should be a major component of this assistance. Asregards transport, assistance is needed in establishing an appropriate legal and regulatory framework
in line with international principles; in acceding to appropriate international conventions in the area oftransport and transit facilitation, and the negotiation of bilateral and sub-regional transit agreements;
and in the simplification of procedures and documentation and the facilitation of transport formalities.
As regards, telecommunications, there is need fo r training in management skills, international
regulations and new telecommunications technologies.
Support for a comprehensive review of investment policy, mechanisms and administration
would be highly useful. The CDC needs assistance in  evaluating the effectiveness of current policies;
in developing information systems for monitoring investment activities and the use of incentives; and
in improving its capacities to attract investment, including through the identification of specific
investment opportunities in Cambodia.
Finally, assistance is required in putting in place mechanisms to improve the coordination and
cooperation among government ministries and agencies involved in economic policy, and in particular
trade policy. Associated with this is a need for human resources development allowing
inter-relationships between various aspects of economic and trade policy to be better understood andevaluated.
Trade Promotion and Trade Support Services
(h)-(p) Except for foreign investment firms, Cambodian enterprises, especially small and
medium  enterprises, experience a variety of difficulties in entering export markets and in expanding
exports. Familiarity with modern data and information sources is low and sometimes non-existent.
Small and medium enterprises are not able to inform themselves on the design and quality
requirements of foreign markets. International trade finance activities carried out by banks in
Cambodia tend to be limited to payment and collections and letters of credit. Pre-and post-shipmentfinance is not easily available  from banks in Cambodia. Insurance is not well developed. and
factories and the transport of merchandise within Cambodia are rarely insured. Firms are frequently
faced with delays in clearing imported inputs  through customs, thereby jeopardizing  their production
schedules and ability to meet the delivery dates required by their clients abroad.WT/COMTD/IF/36
Page 15
The role of the Cambodian government in trade promotion and trade support services is in its
infancy. At present, the Cambodian government does not effectively promote trade or provide trade
support services.  Though the MoC has recently established a trade promotion department, it is not yet
operational. Developing effective mechanisms and trained officials for trade promotion and trade
support services is clearly an area of great need and importance for Cambodia.  Thus far, the PhnomPenh Chamber of Commerce has not actively promoted trade among its members or the Cambodian
private sector at large.
(q) Assistance is needed in all aspects of creating an effective export promotion mechanism,
including the elaboration of an export promotion strategy, developing and managing the  necessary
national and international data bases, and training on techniques for organizing a trade fair. Particular
attention needs to be given to promoting the exports of small and medium enterprises.
Assistance is also required in completing the task of putting in place an appropriate legal and
regulatory framework for the financial sector. Training on trade finance and trade insurance is
required for both the private sector and government officials (in particular those dealing with export
promotion). Help is needed in setting up proper m echanisms to supervise the implementation of the
forthcoming legislation on insurance.
In the  area of business information, training on international marketing is required for both
those involved in export promotion and private traders associations. Assistance is also needed in
establishing a Trade Point to facilitate the exchange of information needed by exporters andimporters.
Assistance is required in putting in place more effective customs procedures, allowing
Cambodia to benefit fully from customs automation through ASYCUDA. In addition to allowing
more efficient customs clearance for traders, automation will enhance the capacity of the CustomsDepartment to generate timely trade data, and improve revenue collection.
Market Access
(r) What are your main market access problems?
Market access problems follow a familiar pattern: on items where Cambodia has supply
capabilities there are significant import constraints - actual and potential - on its exports; where there
are no - or lesser - import impediments Cambodia, with a few exceptions,  has no supply capabilities.
One complication in analyzing market access is that the larger part of Cambodia’s exports are
to Singapore and Thailand. In both cases it is believed that a large proportion of imports fromCambodia are resold to third countries. The actual destination of Cambodia’s exports is thus not
always known to Cambodians.
There are problems involving barriers in markets to which Cambodia is exporting. These are
taken up in the next section. But market access problems also take the form of unfamiliarity withmarkets. For example, there is very little export by Cambodia to Japan, China and Australia, and the
export that does take place is mainly of unprocessed raw materials. The techniques for overcoming
this unfamiliarity, and of identifying potential markets have not yet been developed.
(s) What specific problems or barriers, and in which countries, are most troublesome for
your exporters?
Cambodia's exports of manufactures are made up mostly of garments. The Cambodian
garment industry is only three years old. Canada has imposed quotas on exports of clothing fromWT/COMTD/IF/36
Page 16
Cambodia since 1995. In 1998 the United States imposed a quota on Cambodian exports of gloves.
There are no quantitative restraints in other markets.
Despite rapid growth in garment exports to the United States,  the member states of the
European Union remain the most important market for Cambodian garments. There are no indicationsthat the EU intends to put any part of these exports under restraint in the near future.
Cambodia was not a member of the Multifiber Arrangements and is not a member of WTO. It
therefore lacks any agreed framework within which to undertake discussions with its trading partners
on garment exports. The Cambodian authorities see this as a significant problem.
The Ministry of Commerce is concerned to ensure that garments entering foreign markets and
claiming to be Cambodian are indeed of Cambodian origin. It has recently taken steps to revise
procedures for issuing certificates of origin to make irregular transactions more difficult, and to
lighten the burden of securing such certificates on the industry. It has received technical assistance on
this from ESCAP. The management of Cambodia’s rapidly-growing garment trade remains a
significant challenge for the Cambodian authorities.
(t) Regional and sub-regional trading arrangem e n t s  ( R T A s ) :   p l e a s e  l i s t  R T A s  t o  w h i c h
your country belongs.  Are you satisfied with th e performance with these RTAs?  Please state
the problems of each.  Do you have suggestions on how to solve these?
Cambodia participates in several regional and sub-regional fora related to trade including the
Greater Mekong Sub-region (an ADB-supported initia tive), the Mekong River Commission, and the
CLMV Working Group (supported by Japan).  Most importantly, Cambodia expects to join the
Association of Southeast Asian Nations (ASEAN) in 1998.  In this regard, Cambodia has committed
substantial resources and effort in its preparations for ASEAN admission (See above).
(u) Are there any problems in utilizing the exis ting market access preferences, such as GSP,
GSTP?  Please state the nature of problems relating to each of these.
Problems in utilizing GSP reflect the fact that garments are Cambodia’s main export of
manufactures.
The US GSP scheme does not include garments in its coverage.
The EU GSP scheme includes garments in its coverage, but specifies origin requirements that
Cambodia cannot meet. In September 1997 the EC granted a derogation from these origin
requirements that allow fabrics produced in a number of neighbouring countries to be considered asCambodian for purposes of determining the origin of garments manufactured in Cambodia. However,
Cambodian exports under the derogation are subject to quantitative limits set at about the level of past
exports. GSP access will therefore not in itself generate any increase in the export of goods presently
exported. Further, the derogation expires at the end of 1998. It is thus unlikely to affect investment in
Cambodia’s garment industry. To date the Cambodian industry has made only limited use of thisderogation.
The Cambodian authorities are not familiar with GSTP.
(v) What are your technical assistance needs with respect to market access?
Cambodia requires continuous assistance in managing its garment trade.
Other technical assistance needs occur in three overlapping and inter-linked areas. How to
take full advantage of preferential access: GSP, GSTP and, in due course, AFTA; how to expand andWT/COMTD/IF/36
Page 17
diversify the range of export products Cambodia offers; how to expand and diversify the range of its
export markets. A first step might consist of exploring export possibilities in new markets for goods
presently exported. For example export possibilities for garments in Canada, Norway, Eastern Europe,
Japan and Australia.
C. TECHNICAL ASSISTANCE
(a) To the extent this kind of information is easily available, could you please briefly
describe what trade-related assistance you have received over the past five years from bilateral
and multilateral sources and what projects/programs are presently under consideration in this
area?
Over the past five years, Cambodia has received various forms of technical assistance related
to trade from institutions such as ADB, ESCAP, FAO, UNCTAD, UNDP, WIPO, the World Bank,
and WTO. Assistance has also been received from Australia, the European Commission, New
Zealand and the United States.  Technical assistance on the garment trade has been funded by theCambodian Garment Manufacturers  Association.  In May 1998, assistance from UNCTAD, UNDP,
and the World Bank was ongoing.  Most assistan ce  had an important  training component.
At present, there are advisers assisting Cambodi a with its preparations for accession to the
World Trade Organization, improving the legal fram ework for business and trade (World Bank) and
tax reform (IMF/UNDP).  There is a UNDP project assisting the government with preparations to join
the Association of Southeast Asian Nations (ASEAN) which will end in July 1998.  There is ongoing
World Bank technical assistance to MEF on budget formulation.  As a result of nine months of work
by advisers supported by the Asian Development Bank (ADB) with MoC and MIME, a 1997 report
has been submitted to the government on developing the instruments for trade and industrializationpolicies.  A second ADB-sponsored study--which included a two-week mission to Cambodia -- is
being finalized on the impact of the ASEAN Free Trade Area on trade and economic development in
Cambodia.  In addition, assistance related to technical standards, managing garment exports, and
certificates of origin for Cambodian garments has been or is being provided.
Previously, some technical assistance has been provided in the areas of customs reform
(UNDP), development of a chamber of commerce (EU), GSP status (EU) and reform of Cambodia’sinvestment regime (World Bank).  Prior assistance supported by UNDP was also provided to the
NBC.  UNCTAD has signed a memorandum of understanding with the Cambodian government
related to trade and investment.  As part of this program, UNCTAD is seeking support for a
sub-component to install and train officials to use the ASYCUDA trade data system.
(b) Please summarize your technical assistance n eeds as well as other needs reflected in this
check-list.
Assistance is needed in the following areas:
- developing comprehensive, accessible trade data management systems
- training on trade analysis and its relationship to industrial incentives
- support for regional and global integration efforts related to ASEAN and WTO
- taking full advantage of GSP, GSTP, AFTA and other ASEAN economic initiatives
- support for strengthening institutional mechanisms for trade policy- putting in place a transparent and predictable legal framework
- managing garment trade
- improving data on industry and formulating an industrial strategy
- reviewing investment policy, mechanisms and administration
- enhancing infrastructure in the areas of energy, transport and telecommunicationsWT/COMTD/IF/36
Page 18
- trade facilitation, in particular customs and tax reform and administration and
automation
- training on multilateral negotiation skills
- development/promotion of services sectors and other key sectors of Cambodian
economy (agriculture, informal, SMEs, etc.)
- training related to trade promotion and expanding export opportunities in new
markets.
(c) In the light of the information you have been able to provide so far in response to the
questions in this check-list, what types of inform ation are, in your view, still missing or could be
improved upon?  In order to assist you in providing this missing information, would you need
technical assistance?
There are several areas in which more complete information is needed, including the services
sectors  (with the possible exception of the tourism s ector); industrial data, especially with respect to
SMEs; and data related to the informal sectors.  Technical assistance in filling in crucial gaps in
trade-related information would be highly useful.
(d) Does your country have the technological and human resources to make use of new
information/communication technology tools such as CD-ROM, the Internet, etc.?  What
assistance would you need to enable your country to use these tools in the context of training
and, more generally, in the context of trade development?
There is a growing awareness among policy makers and officials of the benefits and
opportunities offered by new information/communication technology to assist in the work of both the
public and private sectors.  Tools such as CD-ROM and the Internet are beginning to penetrate
Cambodia and to be accessible to officials and the private sector.  The capacity of officials to accessand use such tools in trade development is one potentially useful area of assistance.  Support for
training and increased access to new informati on/communication technology should be part of any
such assistance.WT/COMTD/IF/36
Page 19
INTEGRATED RESPONSES BY THE IMF, ITC, UNCTAD, UNDP
WORLD BANK AND WTO1
CAMBODIA
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question A(k):
Technical assistance requirements as
regards compliance with WTO Agreements
Technical assistance needs are concentrated
in two areas: the WTO accession process
and the creation of a satisfactory legal
framework.
There is need for ongoing support to the
accession process, which would include
help with the mechanics of accession
(preparation of the country memorandum,
advice on negotiating strategies, etc.);further training and familiarization for
various audiences; and assistance with
eventual compliance issues.UNCTAD Assistance has already been provided in this
area in support of the World Bank Project.
It could be continued.
*
                                                     
1 Subject to a request from the government, UNDP will support the Government of Cambodia with the
formulation of a National Programme for Trade development  to be presented to the Consultative Group
meeting.
*Funds are requested.WT/COMTD/IF/36
Page 20
Technical assistance needs identified in the
questionnaireOrganization Response
Question A(k) (cont'd):
WTO A national seminar on the WTO will be held
in the week of 3 May 1999 in Cambodia for
government officials as well as for the
business community.
Cambodian participants will be invited to
regional seminars organized for Asian and
Pacific least-Developed countries in 1998
and 1999.
- Cambodian participants will be invited to
the next Short Trade Policy courses for
least-developed countries.  A Cambodianofficial participated in the first Trade Policy
course for least-developed countries held in
April 1998.
World Bank There is an on-going technical assistance
project which:
- provides analysis of WTO/GATT and
other trade agreements;
- provides an overview about experiences of
other developing countries;- advices and assists in the preparation of
submissions to WTO; and
- advises on the implications for Cambodia
of joining WTO.
2
There is also need for ongoing support for
the drafting of laws relevant to a market
economy and in particular to compliance
with WTO obligations.  This needs to be
supplemented by assistance designed to
facilitate the prompt implementation andenforcement of these laws.World Bank An on-going technical assistance project
assists the government to draft the
commercial codes.
                                                     
2 If additional resources are made available the World Bank may consider expanding its assistance.WT/COMTD/IF/36
Page 21
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question A(l):
Technical assistance needs as regards
specific WTO Agreements
Agreement on Textiles and Clothing WTO See A(k).
Market Access WTO See A(k).
Rules of Origin WTO See A(k).
Safeguards WTO See A(k).
Services (initially as regards choice of
sector in which to make a market accessoffer)WTO See A(k).
Technical Standards WTO See A(k).
Protection of Patents and Copyrights WTO See A(k).WT/COMTD/IF/36
Page 22
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question A(m):
Assessment of the existing trade analysis
and negotiating capacities
The capacity for trade policy analysis is not
sufficiently deep or widespread within thegovernment. Further training is required in
a number of areas, in particular the
interfaces between trade policy and
industrial policies, and between trade policy
and public revenue policy. The relevance totrade and industrial policies of concepts
such as comparative advantage and
effective protection needs to be more
broadly understood. Also, techniques need
to be developed for evaluating the revenue
consequences of tariff reductions, both on a
preferential and MFN basis. The techniquesfor processing the raw trade data generated
by Customs and presenting the data in a
way that allows them to be used for trade
policy purposes are lacking and are urgently
required.IMF The Fiscal Affairs had a resident tax advisor
in Cambodia until quite recently. The Fundis currently contacting him to request more
specific information on the state of trade tax
policy and additional need for assistance.
The Fund stands ready to provide advice to
address the following concerns:
it is understood that with the onset of
economic crisis in Asia the authorities have
introduced higher tariffs for certain products
in order to protect local producers/”infant
industries”. The Fund would advise that the
authorities need to make efforts to reducemaximum and average tariffs, eliminate
export and import duty exemptions, adopt
and enhance effective forestry policy and
eliminate export taxes and the remaining
NTBs.
UNCTAD Further trade-policy support could be
provided to complement the World Bank
project below.  The introduction of
ASYCUDA (see B(q) below) would assist intrade data processing from customs.
World Bank An ongoing technical assistance project
provides training of government staff on
trade policy issues.  (See A(k)).
Because of the interfaces between trade
policy and other aspects of economic
policy, there is need for assistance in
creating mechanisms to bring about better
coordination of the policies of the various
economic ministries and agencies.WT/COMTD/IF/36
Page 23
Technical assistance needs identified in the
questionnaireOrganization Response
Question A(m) (cont'd):
At the same time, support to help reinforce
existing institutional mechanisms for
addressing trade policy is essential.  For
example, a National AFTA Unit exists to
prepare for and implement AFTA once
Cambodia joins ASEAN.  However, fewmembers of the Unit possess the necessary
understanding and experience in
cataloguing non-tariff barriers (NTBs) and
monitoring the dismantling of unduly
obstructive NTBs, a requirement of AFTA.
Training on NTBs would be highly useful.
This is just one example of the kind oftraining needed to build up trade-related
institutional mechanisms and
inter-ministerial bodies.UNDP Through project CMB/96/006, UNDP is
currently supporting the Cambodian
Government on preparations for integration
into ASEAN. This project which began in
August 1996, focuses on training, public
education, institutional strengthening,production of Kmer language materials on
ASEAN and support for a macroeconomic
study related to AFTA.
This project is running out of funding.
Additional sources are sought to continue
the project.
UNCTAD This could be covered by the
complementary assistance mentioned under
A(m) above.
In addition, sector-specific studies and
needs assessments targeting key sectors of
the Cambodian economy would be highly
useful.  Such sectors might include:
agriculture and agro-industry, the informal
sector and services sectors, in particular asregards the policies required in the light of
prospective membership in WTO and
ASEAN.UNDP See above.
 Information on services is often not
available, and the capacity to analyze
services issues in a WTO framework hasnot been developed.
Cambodia has no analytic capacities in the
areas of competition policy and trade and
environment.UNCTAD This could be covered by the
complementary assistance mentioned under
A(m) above.
Negotiating capacities in a bilateral setting
exist at the senior level; there has been no
experience in multilateral negotiations.UNCTAD This could be covered by the
complementary assistance mentioned under
A(m) above.
WTO A module on multilateral negotiating
techniques will be part of the next ShortTrade Policy Course for least-developed
countries.WT/COMTD/IF/36
Page 24
Technical assistance needs identified in the
questionnaireOrganization Response
Question A(m) (cont'd):
World Bank An ongoing technical assistance project
provides
- assistance in contacts with the WTO
Secretariat and
- assistance in bilateral trade negotiations.WT/COMTD/IF/36
Page 25
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question B(g):
Technical assistance needs as regards
supply constraints
Technical assistance needs are substantial
with respect to addressing supplyconstraints.
Assistance is required in formulating
appropriate strategies for promoting
industrial development.UNCTAD This could be covered by the
complementary assistance mentioned underA(m) above.
Assistance is needed in such tasks as:
preparing draft laws, decrees and
regulations to implement an appropriatestrategy;UNCTAD Assistance in investment legislation may be
provided.
*
formulating concrete programs forconstructing and managing industrial
estates and for organizing an Industrial
Zone Authority;
formulating appropriate policies for the
promotion of small and medium sized
enterprises, and translating these policies
into necessary laws and regulations;World Bank The World Bank under IFC's MPDF
(Mekong Projets Development Facility) is
organizing seminars on small and medium
size enterprises and training for owners of
small and medium size enterprises.
formulating a strategy for entrepreneurship
development and making it operational;UNCTAD Assistance may be provided.*
World Bank See World Bank entry immediately above.
devising specific programs to foster small-
and medium scale agricultural productionfor export;
                                                     
*Funds are requested.WT/COMTD/IF/36
Page 26
Technical assistance needs identified in the
questionnaireOrganization Response
Question B(g) (cont'd):
strengthening capacities as regards
industrial standards activities and the
establishment of an Industrial Standards
Institute; and establishing certification
schemes as regards ISO 9000 and ISO
14000.ITC Within the frame of a new ITC technical
cooperation programme for Cambodia*
which is presently being prepared, specificassistance to the Ministry of Industry is
foreseen for the establishment of a
certification system, including finalizationof its draft law.
Assistance is also required in the
development of essential infrastructure.  As
regards energy, there is need for assistance
in basic energy development planning and
in power project management.  There is
also need for assistance in developing
strategies, institutions and mechanisms for
the management of petroleum resources.Training should be a major component of
this assistance.  As regards transport,
assistance is needed in establishing anappropriate legal and regulatory framework
in line with international principles; in
acceding to appropriate international
conventions in the area of transport andtransit facilitation, and the negotiation of
bilateral and sub-regional transit
agreements; and in the simplification of
procedures and documentation and the
facilitation of transport formalities.  Asregards telecommunications, there is need
for training in management skills,international regulations and new
telecommunications technologies.UNCTAD  Assistance may be provided in transit
agreements and simplification of trade
related procedures and documentation.
*
                                                     
*Funds are requested.WT/COMTD/IF/36
Page 27
Technical assistance needs identified in the
questionnaireOrganization Response
Question B(g) (cont'd):
World Bank Two World Bank projects:
1. The Active Phnom Penh Power
rehabilitation project, and
2. The Road Rehabilitation Project
will address some of the needs identified.
Support for a comprehensive review ofinvestment policy, mechanisms and
administration would be highly useful. The
CDC needs assistance in evaluating the
effectiveness of current policies; indeveloping information systems for
monitoring investment activities and the use
of incentives; and in improving its
capacities to attract investment, including
through the identification of specificinvestment opportunities in Cambodia.UNCTAD UNCTAD has prepared a project document
in consultation with the CDC to address this
issue.
*
Finally, assistance is required in putting in
place mechanisms to improve the
coordination and cooperation among
government ministries and agencies
involved in economic policy, and in
particular trade policy. Associated with this
is a need for human resources developmentallowing inter-relationships between
various aspects of economic and trade
policy to be better understood and
evaluated.ITC See the ITC entry above.
Under the above mentioned technical
assistance programme
* human resource
development of concerned ministries' staff
will receive the highest consideration.
Specific modules aimed at improving
knowledge of business practices will bedeveloped.
UNCTAD This could be covered by the
complementary assistance mentioned underA(m) above.
World Bank The existing technical assistance project by
its very nature addresses this need.
                                                     
*Funds are requested.WT/COMTD/IF/36
Page 28
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question B(q):
Technical assistance needs in the area of
trade promotion and support services
Assistance is needed in all aspects of
creating an effective export promotionmechanism, including the elaboration of an
export promotion strategy, developing and
managing the  necessary national and
international data bases, and training on
techniques for organizing a trade fair.Particular attention needs to be given to
promoting the exports of small and medium
enterprises.ITC See B(g).  Under the new technical
cooperation programme
* assistance will be
provided to strengthen the Export Promotion
Department of the Ministry of Commerce,
through training and advice on trade
information, participation in trade fairs and
the formulation of an export promotionstrategy.
In addition, ITC will explore the possibility
of adapting ITC's ongoing global
competitiveness curriculum to Cambodia.
World Bank An on-going technical assistance project:
- provides advise and assistance to the
Ministry of Commerce in formulating an
overall trade strategy, and
- compiles and systemizes information on
Cambodia's trade policies.
                                                     
*Funds are requested.WT/COMTD/IF/36
Page 29
Technical assistance needs identified in the
questionnaireOrganization Response
Question B(q) (cont'd):
Assistance is also required in completing
the task of putting in place an appropriate
legal and regulatory framework for the
financial sector. Training on trade finance
and trade insurance is required for both the
private sector and government officials (inparticular those dealing with export
promotion). Help is needed in setting up
proper mechanisms to supervise the
implementation of the forthcoming
legislation on insurance.UNCTAD An UNCTAD mission has identified
specific needs in this sector.  A project may
be developed.
*
In the area of business information, training
on international marketing is required for
both those involved in export promotion
and private traders associations. Assistanceis also needed in establishing a Trade Point
to facilitate the exchange of information
needed by exporters and importers.ITC See B(g).  Under the new ITC technical
cooperation programme for Cambodia
*
business information elaboration anddissemination will receive attention.Selected ITC databases and documentation
will be made available to participating
organizations.
UNCTAD A feasibility study for the Trade Point may
be undertaken in cooperation with the ITC
activities mentioned above .*
Assistance is required in putting in place
more effective customs procedures,
allowing Cambodia to benefit fully from
customs automation through ASYCUDA.In addition to allowing more efficient
customs clearance for traders, automation
will enhance the capacity of the Customs
Department to generate timely trade data,
and improve revenue collection.UNCTAD An ASYCUDA project document has been
prepared.  A preparatory assistance phase is
advisable.
*
                                                     
*Funds are requested.WT/COMTD/IF/36
Page 30
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question B(v):
Technical assistance as regards market
access
Cambodia requires continuous assistance in
managing its garment trade.ITC ITC is ready to explore this further.
Other technical assistance needs occur in
three overlapping and inter-linked areas.
How to take full advantage of preferential
access: GSP, GSTP and, in due course,AFTA;UNCTAD A GSP seminar will be held in 1998.
Other training activities may be organized.
*
UNDP See A(m).
how to expand and diversify the range of
export products Cambodia offers;ITC See B(q).
how to expand and diversify the range of its
export markets. A first step might consist of
exploring export possibilities in newmarkets for goods presently exported.  For
example export possibilities for garments in
Canada, Norway, Eastern Europe, Japan
and Australia.ITC ITC will provide the Ministry of Commerce
with available information on export
possibilities for the garment sector toselected target markets.
                                                     
*Funds are requested.WT/COMTD/IF/36
Page 31
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question C(b):
Summary of technical assistance needs
according to priority
Assistance is needed in the following areas:- developing comprehensive, accessible
trade data management systemsITC See B(q).
UNCTAD  See A(m) and B(q).
- training on trade analysis and its
relationship to industrial incentivesUNCTAD See A(m).
- support for regional and global integration
efforts related to ASEAN and WTOUNCTAD See A(k).
UNDP See A(m).
World Bank See A(k).
- taking full advantage of GSP, GSTP,
AFTA and other ASEAN economic
initiativesUNCTAD See B(v).
UNDP See A(m).
- support for strengthening institutional
mechanisms for trade policyIMF See A(m).
UNCTAD See A(m).
UNDP See A(m).
- putting in place a transparent and
predictable legal framework
- managing garment trade ITC See B(v).
- improving data on industry and
formulating an industrial strategyUNCTAD See B(g).
- reviewing investment policy, mechanisms
and administrationUNCTAD See B(g).WT/COMTD/IF/36
Page 32
Technical assistance needs identified in the
questionnaireOrganization Response
Question C(b) (cont'd):
World Bank Public Expenditure Reviews (PERs) 1998:
- Allocation of public expenditures
- Recommendation on administration and
reforms in public finance.
- enhancing infrastructure in the areas ofenergy, transport and telecommunicationsWorld Bank See B(g).
- trade facilitation, in particular customs and
tax reform and administration and
automationIMF See A(m).
UNCTAD See B(g) and B(q).
World Bank See PER above.
Public Expenditure Reviews (PERs) 1998:
- Tax reform implications;- Recommendation on tax administration
improvement.
- training on multilateral negotiation skills UNCTAD See A(k).
World Bank See A(k).
- development/promotion of services
sectors and other key sectors of Cambodianeconomy (agriculture, informal, SMEs, etc.)World Bank An Agriculture Productivity Improvement
Project will be undertaken.
- training related to trade promotion andexpanding export opportunities in new
markets.ITC See B(g) and B(q).WT/COMTD/IF/36
Page 33
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question C(c):
Additional information
There are several areas in which more
complete information is needed, includingthe services sectors (with the possible
exception of the tourism sector); industrial
data, especially with respect to SMEs; and
data related to the informal sectors.
Technical assistance in filling in crucialgaps in trade-related information would be
highly useful.UNCTAD TRAINS CD-Rom will continue to be
provided.WT/COMTD/IF/36
Page 34
Technical assistance needs identified in the
questionnaireOrganization Response
In reply to question C(d):
Technical assistance needs in the area of
information technology including training
of human resources
There is a growing awareness among policy
makers and officials of the benefits and
opportunities offered by new
information/communication technology to
assist in the work of both the public and
private sectors.  Tools such as CD-ROMand the Internet are beginning to penetrate
Cambodia and to be accessible to officials
and the private sector.  The capacity of
officials to access and use such tools in
trade development is one potentially usefularea of assistance.  Support for training and
increased access to new
information/communication technology
should be part of any such assistance.UNCTAD See B(q) Trade Points.
WTO Computer equipment and connection to the
Internet will be provided by the WTO in
October 1998.  Training of users will also beprovided.
__________