Cambodia WT/TPR/S/253 
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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. Cambodia is a relatively small country with a population of around 14 million people. It has 
emerged from three decades of turmoil, including ci vil war and political instability.  The country has 
few economic resources except for its agriculture, fi shery and forestry resources.  It has limited 
mineral resources, excluding recent indications of  offshore reserves of oil and gas, no major 
hydropower potential, and only a small industrial b ase.  Even its agricultural resources are limited, 
consisting primarily of 3.7 million hectares of cultiv ated land, of which 75% is devoted to rice and 
25% to other food and industrial crops, primarily rubber.  The fisheries resources comprise the 
Mekong River and Tonle Sap Great Lake, which is one of the most productive freshwater fisheries in 
the world. The bulk of the population still consists of rice farmers who supplement their income from 
fishing, or fishermen who supplement their income from rice farming. 
(i) Overview of the economy  
2. Agriculture, including forestry and fishing, cont ributed an estimated 33.5% of GDP at current 
prices in 2010. In 2007, according to the IMF, the sector engaged an estimated 55.9% of the 
economically active population, but remained extrem ely vulnerable to adverse weather conditions.  
This problem is compounded by inadequate rural in frastructure and a lack of farm inputs such as 
fertilizers. In 2010, paddy rice production was around 8.2 million tonnes;  this crop is a significant source of export revenue. Other important crops incl ude rubber, cassava, maize, sugar cane, bananas, 
and mango.  The fishing sector is adversely affected by land encroachment and the reduction of the 
flooded forest area. According to IMF data, agricultur al GDP increased, in real terms, at an estimated 
average annual rate of 5.8% during 2004-10 (Table IV.1). 
3. Industry, including mining, manufacturing, constr uction, and utilities contributed an estimated 
21% of GDP in 2010, down from 25. 6% in 2004.  The manufacturing sector contributed between 14% 
and 19% of GDP during the period, and is domin ated by the production of garments, household 
goods, textiles, tyres, and pharmaceutical products. Th e manufacture of clothing, mostly for export, 
grew rapidly from the mid 1990s, and by late 2008 well over 300,000 worker s were engaged in 
garment manufacture. The garment sector accounts fo r 70% of manufacturing (12% of GDP) and 75% 
of Cambodia's export revenue.  Historically, improvi ng labour standards and working conditions have 
generally helped garments exporters to maintain ex port contracts and stave off the competitive threat 
from other low-cost manufacturers in the region.  
4. Construction contributed over 6% of GDP duri ng the review period and has been one of the 
fastest growing industries in recent years. Large- scale public-sector projects, the need to develop 
urban infrastructure and national highways, and the rapidly rising demand for residential housing have 
contributed to a boom in the sector.  Cambodia is endowed with a variety of minerals, but exploitation is still on a small scale. The mining sector has c ontributed only 0.4% to GDP in recent years. 
However, a number of companies, including foreign companies, have been exploring for oil and gas 
offshore in the Gulf of Thailand over the past decad e, and in 2005 the first significant discovery was 
announced.   WT/TPR/S/253 Trade Policy Review 
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Table IV.1 
Growth and share of GDP by economic activities, 2004-10 
(%) 
    2004 2005 2006 2007 2008 2009 2010a 
Growth rate at constant 2000 prices        
Agriculture, fisheries and forestry -0.9 15.7 5.5 5.0 5.7 5.4 4.0 
 Crops -2.3 27.6 5.3 8.2 6.6 5.8 4.4 
 Fisheries -1.7 5.6 3.8 0.8 6.5 6.0 2.9 
Mining and quarrying 24.2 26.3 15.9 7.7 15.8 20.0 5.6 
Manufacturing 17.7 9.7 17.4 8.9 3.1 -5.3 1.8 
 Textile, clothing and footwear 24.9 9.2 20.4 10.0 2.2 -9.0 1.5 
Electricity, gas and water 11.2 12.5 31.7 11.5 8.5 8.5 4.6 
Construction 13.2 22.1 20.0 6.7 5.8 5.0 2.6 
Services 13.2 13.1 10.1 10.1 9.0 2.3 3.3 
 Wholesale and retail trade 5.8 8.5 7.1 9.5 9.4 4.2 3.3 
 Restaurants and hotels 23.4 22.3 13.7 10.2 9.8 1.8 4.2 
 Transport and communication 9.6 14.5 2.1 7.2 7.1 3.9 3.4 
 Finance 20.5 19.6 24.0 22.2 19.2 8.0 3.3 
 Public administration -6.7 5.9 -1.2 0.1 4.5 1.0 3.2 
 Real estate and business 20.3 7.8 10.9 10.7 5.0 -2.5 3.4 
 Other services 18.0 18.3 17.2 12.1 12.0 2.9 2.7 
Share of GDP at current prices        
Agriculture, fisheries and forestry 29.4 30.7 30.1 29.7 32.8  33.5 33.5 
 Crops 13.6 15.7 15.1 15.5 17.9  18.4 18.5 
 Fisheries 8.2 7.3 7.2 6.9 7.4  7.7 7.6 
Mining and quarrying 0.3 0.4 0.4 0.4 0.4  0.5 0.5 
Manufacturing 18.8 17.8 18.6 17.3 15.3  14.4 13.9 
 Textile, clothing and footwear 13.3 12.3 13.0 12.1 9.1  8.7 9.0 
Electricity, gas and water 0.5 0.5 0.6 0.6 0.5  0.5 0.5 
Construction 6.0 6.3 6.7 6.7 6.1  6.3 6.1 
Services 39.3 39.1 38.7 38.5 38.8  38.8 38.3 
 Wholesale and retail trade 9.4 9.2 8.9 8.9 8.9  9.0 8.8 
 Restaurants and hotels 4.2 4.3 4.4 4.3 4.5  4.5 4.3 
 Transport and communication 7.1 7.4 7.1 6.9 7.4  7.5 7.5 
 Finance 1.1 1.1 1.3 1.4 1.3  1.4 1.4 
 Public administration 2.0 1.8 1.7 1.9 1.8  1.8 1.8 
 Real estate and business 7.2 6.6 6.5 6.3 6.4  6.1 6.1 
 Other services 8.5 8.6 8.8 8.8 8.5  8.5 8.4 
Otherb 5.7 5.2 5.0 6.9 6.0  6.2 7.1 
.. Not available. 
a Estimates. 
b Includes taxes on products less subsid ies minus Finance Service Charge. 
Source:  Data provided by the authorities;  and IMF (2009), Country Report No. 09/48 , February . 
5. The services sector accounted for an estimated 38-39% of GDP during the review period. 
Tourism has become increasingly significant since 2000, with receipts reaching US$1.5 billion in 2008, when tourist arrivals exceeded 2 million.  The Angkor Wat temple complex in Siem Reap 
continues to be the main draw, and the beach es around Sihanoukville are being developed.  
6. The formal sector encompasses garments, touris m, and public administration, while the vast 
majority of enterprises (including small and me dium-sized enterprises that are household-based) Cambodia WT/TPR/S/253 
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remain informal because of the burdensome require ments needed to register a business and secure the 
necessary licenses. Smuggling of goods provides the li velihood for many in the informal economy.   
7. The garment and service sectors have attracted significant foreign direct investment in the 
past, but sizeable FDI has recently moved to the co nstruction sector. This is expected as an economy 
grows and develops; and resources move to highe r-productivity activities in industry and modern 
services.  This process, and the associated rural-urba n migration that occurs with the transformation, 
contributes to a reduction in poverty.  Although house hold incomes in rural areas grew moderately 
between 2000 and 2007, World Bank studies showed th at poverty reduction in Cambodia was slow in 
comparison with neighbouring  countries, and inequality significantly increased.  
8. It has become increasingly difficult for new entr ants to be absorbed into the labour market. 
The number of new job-seekers exceeded 250,000 per y ear by 2010, and prospective new entrants to 
the labour market are projected to total 400,000 in  the near future, as more young people reach 
working age. Regular data on employment trends are not available. However, according to the 
National Institute of Statistics 2004 Inter-Censal Population Survey, 7% of  the labour force was 
unemployed, with a slightly higher rate in rural areas than in urban areas. Employment is 
predominately based on agriculture, with around 73% of workers engaged in agriculture, forestry, and 
fisheries. Manufacturing accounted for 5.3% of em ployed workers, according to the 2004 survey, 
while wholesale and retail trade accounted for 8.9% a nd public administration and defence for 2.6%.  
The clothing industry is now the second largest empl oyer in this predominantly agricultural country. 
Over 85% of workers in the industry are women and over 90% of them come from rural areas.  It is 
estimated that these workers remit about 50% of mont hly wages to family in rural provincial areas. In 
this way, the rapid expansion of FDI-driven cl othing exports has become a vehicle for the 
empowerment of women, improving liv elihoods, and poverty alleviation.  
(ii) Export potential by sector 
9. Building on the 2002 Integrated Framework (IF),  the Government completed a Diagnostic 
Trade Integration Study (DTIS) in 2007, which revi ewed developments in ke y trade-related policies 
as well as the global environment for Cambodia and concludes that tariff advantages are unlikely to 
drive future export growth.1 The DTIS derived from this the n eed to diversify exports and export 
markets and identified 19 products and services with potential for export diversification, 12 of which 
are in the agriculture, forestry, and fisheries s ector. The most important is rice, for which the 
Government has prepared an ambitious plan to ma ke Cambodia the world's third largest exporter of 
rice (regarded as the country's 'white gold'), behind Thailand and Viet Nam, by 2015. The other 
products are:  rubber, cassava, fishery, fruits and vegetables, wood products, soybeans, silk, livestock, 
cashew nuts, corn and beer.  In the industrial sector, wood products, light manufacturing assembly, footwear, and garments are listed, as well as tour ism, labour, transport, business, and web-based 
services.  
10. The report points to a number of shared ch allenges for Cambodian sectors with export 
potential. Factors that continue to constrain e xport diversification include:  high production and 
infrastructure costs, low competitiveness and produc tivity; limited value added in many sectors, due 
to high import dependency for raw materials an d intermediate inputs; poor quality and limited 
differentiation of products, limited access to tec hnology, and small design and R&D capacity; in 
many sectors, enterprises have difficulties meeting exacting quality standards of various foreign 
markets as well as meeting time delivery requirement s of foreign buyers; an underdeveloped, albeit 
improving, legal and institutional frame work for business export development. 
                                                      
1 Ministry of Planning and UNDP (2007). WT/TPR/S/253 Trade Policy Review 
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(2) AGRICULTURE  
(i) Sector situation 
11. Agriculture remains Cambodia's most important eco nomic sector in terms of its contributions 
to income and employment for most of the count ry's rural population, which accounts for about 85% 
of the total population.  Agricultural GDP growth averaged 5.8% per annum in real terms during 
2004-10, about twice the rate of growth of the popula tion.  Despite this relatively strong performance, 
agriculture's contribution to GDP has gradually declined, from 40% in the mid 1990s to around 33% in 2010, although it remains the primary source of em ployment for at least 70% of the population.  
Most Cambodian farmers are smallholders with le ss than two hectares per household. Key sub-sectors 
are crops (dominated by rice), fisheries, forestry , and livestock, which are major sources of livelihood 
for the poor.  About 9% of the population depends on fisheries for primary employment and, besides being a primary source of protein in the domestic diet, fish is exported in significant volumes. The 
importance of forestry in agricultural GDP has dec lined in recent years, partly as a result of the 
Government's forestry reform policy and partly due to resource deple tion (exacerbated by illegal 
commercial logging and poor land-use management ), a ban on log exports, and revocation of 
concessions. Smallholders use livestock as a source of  food, income, and drawght power, as well as a 
form of insurance in times of sickness or other catastrophes.  
12. Despite the improved market access for Cambodian products and favourable weather during 
2005-09, exports of agricultural products are of little significance according to official figures, 
accounting for only 8% of total exports, partly due to supply inconsistency, difficulties in meeting 
SPS requirements, and poor trade-related instituti onal support. Cambodia has one of the most 
inefficient export services in the region. However, most exports of Cambodian agricultural products 
are unofficial and are exported in a non-processed stat e to neighbouring countries, reflecting the very 
low value added of the sector. 
(ii) Regulatory framework  
13. The National Strategic Development Plan  (NSDP) 2006-2010 is the Government's 
overarching framework for reducing poverty through economic growth.  It has been extended to 2013 
and is based on Cambodia's Rectangular Strategy platform
2, in which a key pillar is enhancing the 
agriculture sector, through improving productivity a nd diversification in a market environment 
conducive to private-sector participation. The Go vernment has been engaged in reforming the 
agriculture sector since the mid 1990s and ha s so far achieved food self-sufficiency, price 
liberalization, and an improved land law. The refo rm is on-going with the objective of promoting 
sustainable growth of market-based agriculture, improving productivity, intensifying crop production to increase yields and rural incomes, divers ifying crops, improving fisheries and forestry 
management, carrying out land reforms and divesting state-owned enterprises in the sector. 
14. The Ministry of Agriculture, Fisheries and Fo restry is the lead agency responsible for 
development of the agricultural sector. The MAFF, a nd its various departments, is responsible for 
monitoring and regulating primary agricultural pro duction quality (crops, fisheries, livestock) and 
first stage processing
3, and it is the principal regulatory agency of agricultural material and chemicals.  
The General Directorate of Agriculture is responsible  for plant production, the Department of Animal 
                                                      
2 Under the 2004 Rectangular Strategy for Growth, Employment, Equity and Efficiency, agricultural 
productivity, diversification, and competitiveness are the first growth priority along with the rehabilitation and 
construction of physical infrastructure.   
3 Includes washing, cleaning, husking, peeling, cutting and slicing, threshing and winnowing, and 
animal and fish slaughter. Cambodia WT/TPR/S/253 
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Health and Production for animal husbandry, the Fisheries Administration for fisheries and 
aquaculture, and the Forestry Administration for forestry. 
15. The Ministry of Commerce (Camcontrol) is responsible for market  surveillance within 
Cambodia and for food safety, has the legal mandate to inspect food products at the border, and is 
responsible for export certification. For secondary stage agri-based product processing, the MIME is 
involved in monitoring production and regulatory oversight. 
16. Other institutions that have direct or i ndirect roles and responsibilities for planning, 
implementing, and managing agricultural programmes and activities include:  the Ministry of Rural 
Development;  the Ministry of Water resour ces and Meteorology;  the Cambodia National Mekong 
Committee;  the Council for Agriculture and Rural De velopment, which is a high-level policy-making 
body responsible for formulating the Government's ro ad map for agricultural and rural development;  
and the Tonle Sap Basin Authority, which promotes sustainable development in the lake basin.  
(iii) Agricultural trade policies 
17. The simple average MFN tariff on agricultural products is 14.5%, down from 20.6% in 2003.  
SPS certificates and permits are required for the impor tation of certain agricultural products.  From 
1 June 2005, Cambodia has gradually eliminated  quantitative restrictions on the importation of 
fertilizers and other agricultural inputs, except p esticides. Cambodia established a WTO-consistent 
method of registration and review of imported agricultural chemical  requirements, related to safe 
storage and domestic distribution, applicable to do mestic distributors or to importers using bonded 
storage prior to domestic distribution.  Since January 2007, Cambodia has relied on the provisions of 
TBT Agreement to regulate domestic and international trade in these items.    
18. Cambodia does not impose prohibitions or restrictions on exported agricultural products, 
except for certain narcotic drugs.  A 10% tax is le vied on exports of pure-bred cattle and swine. 
Export restrictions on rice were lifted in July 2001,  but Cambodia has reserved its right to restrict 
exports of rice temporarily to prevent or relieve critical shortages of foodstuffs as foreseen under 
Article XI:2(a) of the GATT 1994. Cambodia has not  extended export credit, export credit guarantee 
or insurance programmes for agricultural produc ts, other than milled rice.  Upon Cambodia's 
accession to the WTO, agricultural export subsid ies were bound at zero in its Schedule of 
Concessions and Commitments on Goods: Cambodia does not maintain or apply any export subsidies 
for agricultural products.   
19. Cambodia does not use either Amber Box or Bl ue Box measures. Expenditures for Green Box 
measures for 2007 and 2008 were notified to the WTO in March 2010.4  According to the data 
provided, over half of total support in 2007 and 2008 took the form of payments for relief from 
natural disasters (Table IV.2).  For calendar y ears 2004, 2005, 2006, and 2009 no domestic support 
was granted for agricultural products. 
20. The Cambodian Agricultural Research and Development Institute (CARDI) plays a 
significant role in agricultural research, supporti ng research management capacity for farmers, 
farmers' associations, and agri-businesses.  The MAFF provides extension services to farmers and provides seed to farmers affected by natural disaster s. In addition to Green Box measures, Cambodian 
farmers are exempt from the agricultural land tax a nd income taxes, classifi ed as decoupled income 
support. VAT exemptions on agricultural inputs ar e generally available to farmers and the VAT 
revenue forgone in 2010 is estimat ed at about US$16 million.    
                                                      
4 WTO document G/AG/N/KHM/2, 24 March 2010. WT/TPR/S/253 Trade Policy Review 
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Table IV.2 
Domestic support measurea, 2007 and 2008 
Measure Description of measure Monetary value of 
measure 
(million Riels) 
  2007 2008 
Research Research activities on agricultural productivity, land diversification, plant and 
animal health, in accord ance with Annex 2, para. 2(a) of the Agreement on 
Agriculture  183 288 
Pest and disease 
control Expenditures on plant protection and an imal quarantine, in accordance with 
Annex 2, para. 2(b) of the Agreement on Agriculture  1,052 1,406 
Training services Training for farmers and lo cal communities on crop pr oductivity, small-scale 
agri-processing and contract farming, in accordance with Annex 2, para. 2(c) of 
the Agreement on Agriculture  943 1,150 
Extension and 
advisory services Extension and advisory services, including transfer of information and results of 
research to farmer cooperatives and farmers, in accordance with Annex 2, 
para. 2(d) of the Agreement on Agriculture  1,370 1,342 
Inspection services Expenditures on inspection services  relating to animal hea lth, in accordance with 
Annex 2, para. 2(e) of the Agreement on Agriculture  157 92 
Marketing and 
promotion services Marketing and promotion services, incl uding market information and market 
development, in accordance with Anne x 2, para. 2(f) of the Agreement on 
Agriculture  Nil Nil 
Infrastructural services Infrastructural services including rehabilitation and maintenance of small-scale 
irrigation schemes, in accordance with Annex 2, para. 2(g) of the Agreement on 
Agriculture  Nil Nil 
Payments for relief 
from natural disasters  Expenditure for relief from natural disast er on the provision of agricultural inputs, 
equipment and pest and disease control to agricultural produc tion, in accordance 
with Annex 2, para. 8 of the Agreement on Agriculture  4,920 5,722 
Total  8,625 10,000 
a Measures exempt from the reduction commitment – Green Box. 
Note: Exchange rate:  2007, US$1 = 4,058 Riels;  2008, US$1 = 4,003 Riels. 
Source:  National Bank of Cambodia;  and WTO document G/AG/N/KHM/2.  
(iv) Policy developments in selected sub-sectors  
21. In 2010, rice and other crops took the largest share in agricultural output (54%), followed by 
fishing (27%), livestock and poultry (13%), and fo restry and logging (6%). The main agricultural 
products are paddy (rice in the husk), maize, cassava, soybeans, tobacco, and rubber.   
(a) Rice 
22. Cambodia has resumed exporting rice following a 25-year hiatus caused by war, political 
isolation, and a decimated agriculture sector. On ly as recently as 2004 has the cultivated national rice 
area returned to the levels common in the 1960s. Over the past decade, paddy rice production has 
increased steadily, at a 9% annual growth rate and rice has been in surplus and mainly unofficially 
exported. Much of this is border trade and is not recorded.   
23. As a result of the 'Everything-but-Arms' initiativ e, exports of milled rice to the EU became 
exempt from import duties and quotas from 2009.  This preferential measure, together with the 
removal of licence requirements for milled rice expor ters and a doubling of the Rural Development 
Bank capital to US$36 million, has helped increase the level of exports.   
24. Given Cambodia's recent success in achieving surplus rice production, including for export, 
the Government is intent on expanding its pro duction and export capacity and becoming a major 
export nation. Under the motto "Rice – White Gold", the Government adopted a new rice policy in Cambodia WT/TPR/S/253 
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2010 based on an ambitious five-year plan aime d at expanding the produc tion and export of rice.5  
Rice accounts for about half of Cambodia's to tal crop production and around 7-8% of GDP. 
According to the Government, production could reach  8.7 million tonnes of paddy rice in 2010-11, of 
which an estimated 3.1 million tonnes is required fo r local consumption. Factoring in seed and post-
harvest losses of around 13%, more than 3.9 million tonnes of paddy would be available for export. 
However, according to official statistics, only about 30,000 tonnes (less than 1%) are exported, 
implying that Cambodia's potential to enter world ma rkets remains largely unrealized, because of a 
lack of processing and warehousing capacity, as well as formal export arrangements.  
25. The rice export policy is wide-ranging and aims to :  (i) facilitate trade, by reducing informal 
fees, eliminating illegal checkpoints, quicker custom s clearance for imports of inputs, increasing rice 
milling capacity, and improving export processing, in cluding the certification and grading of products 
to meet the standards of importing countries;  (ii) raise productivity, by increasing paddy rice yields, using higher yield seeds, expanding irrigation syst ems, and modernizing farming techniques;  
(iii) deal with land issues (only 10% of farmer s have land titles), by improving land titling to enable 
farmers to use land as collateral for loans to fi nance necessary investments and working capital; and 
(iv)  improve infrastructure and reduce energy  costs, which account for around 25% of total 
production due to heavy reliance on imported  petroleum for electricity generation. 
26. Cambodia no longer implements any quantitative restrictions on rice imports and exports. 
Current import duties on milled rice are 7% plus a 10% VAT. VAT exemptions on agricultural inputs 
are generally available to farmers, although estimates  of revenue forgone by the Government are not 
available due to lack of statistical data.  On the marketing side, Cambodia does not offer any price 
support or intervention programmes for paddy or mille d rice.  According to the authorities, the Green 
Trade Company has responsibility for purchasing rice on behalf of the State, including the purchase 
and storage of rice reserves required under th e ASEAN Food Security Reserve Agreement.   
(b) Rubber 
27. The rubber sector in Cambodia is strongly export- oriented:  almost all rubber is exported due 
to a lack of manufacturing facilities to produce rubber products, such as tyres and tubes. Until 
recently, the sector was dominated by state-owne d enterprises, which accounted for 48% of total 
plantation area in 2007, followed by smallholders ( 44%) and private companies.  By late 2008, six of 
the seven state-run plantations had been privatized and the last state-run rubbe r estate was divested in 
early 2009.  According to the MAFF, total production of dry rubber was 19,715 tonnes in 2008, 
37,380 tonnes in 2009 and 42,250 tonnes in 2010.  In 2010, 29,000 tonnes of rubber were exported 
with an estimated value of US$89.1 million. Afte r the seven state-owned enterprises were divested, 
the General Directorate of Rubber (GDR) was es tablished under Sub-Decree No. 188. Among its 
functions, the GDR implements the Government's policies and development programme to ensure 
rubber development in Cambodia, and prepares the industry's policy goals and strategies. 
28. The rubber industry has traditionally been one  of the Cambodia's key strategic crops, 
contributing significantly to employment and national export earnings. In recent years, the share of natural rubber export value in total export earnings is  estimated to be of the order of 1%.  Cambodia's 
natural rubber is exported to only a few market de stinations, mainly Viet Nam, Malaysia, China, 
Singapore, and Korea.  The Vietnamese market is  the leading destination as most Cambodian rubber 
estates are located close to the border with Vi et Nam.  Natural rubbe r is exported through the 
Sihanoukville seaport or th e Vietnamese border. 
                                                      
5 The plan is contained in the June 2010 Cabinet-approved Policy Document on Promotion of Paddy 
Rice Production and Export of Milled Rice.  Viewed  at:  http://www.foodsecu rity.gov.kh/docs/ENG/Rice-
policy-Eng.pdf. WT/TPR/S/253 Trade Policy Review 
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29. The rubber industry was identified by the DTIS 2007 as one of the top five sectors with high 
export potential and medium-high contribution to human development.  A number of factors 
encouraged the Government to place the rubber sect or among its top development priorities, including 
strong prospects for long-term growth in world dema nd for natural rubber; an anticipated increase in 
Cambodian production;  improvement in productivit y through privatization and the emergence of 
smallholders;  and promising prospects for downstream activities. However, challenges and 
constraints continue to hinder the sector's develo pment, and could weaken the competitiveness of the 
Cambodian rubber industry.  Problem areas appear to  include relatively low rubber yield per hectare, 
high input and utilities costs, a lack of standard certif ication for exports to regional  and international 
markets, cash flow constraints among processors and producers, excessive paperwork required for 
exports, unofficial trading fees, low customs clearanc e efficiency and high transportation costs and an 
onerous  export tax.  The authorities contend, howe ver, that these challenges and constraints have 
been reduced with the implementation of the Government's trade facilitation policy. 
30. One key component that has long exacerbated Cambodia's rubber export prices is the export 
tax. Every licensed rubber exporter must pay VAT (1 0%) on domestic sales of natural rubber and an 
additional export tax ranging from 2% to 10% when  natural rubber is exported. When an export 
transaction is completed, exporters may apply for a VAT refund. As stipulated in Sub-Decree No. 172 
(2010), since the beginning of 2011, the Governme nt has imposed a specific export tax of US$300 per 
tonne if the f.o.b. price exceeds US$4,000 per tonne, US$200 per tonne of the price is between US$3,000 and US$4,000, and US$100 per tonne if the f.o.b. price is under US$3,000 per tonne. 
(c) Forestry 
31. The Forest Administration is the main government  agency in the forestry sector;  other actors 
including forest-dependent rural communities, de velopment partners, investors, and national and 
international NGOs. The Government initiated the fo restry reform process in 1998 and a new Forest 
Law was promulgated in 2002. The law provides th e legal framework for forest-sector policy and 
applies to all forests, whether natural or planted.   The current National Forest Programme, aims to 
promote the conservation and sustainable manageme nt and use of forest resources, and provide 
strategic orientation for the sector in harmony  with other sectors of the economy during 2010-29, 
aligned with the Government's nationa l strategic development plans.    
32. In 1965, 13.2 million ha was under forest cover,  accounting for 73% of the national land area. 
By 2006, however, forest cover had been reduced to about 10.7 million ha, or  59% of total land area. 
According to the Forestry Administration, the loss of forest cover is consistent with land use and 
forest definition patterns associated with demogr aphic growth and economic development in most 
countries.
6  The Government has set the goal of 60% forest cover by 2015. Forests form a crucial part 
of the survival strategy of the rural poor wh o depend on forests for food from fruits, nuts and 
mushrooms;  fuel wood;  resins and gums;  medi cines from wild plants;  wildlife hunting for food;  
and artisan use of wood for construction.   
33. Illegal logging activities have occurred in some  areas despite bans on felling and efforts to 
centralize revenue collection.  During the 199 0s, as environmental concerns increased about 
hardwoods being irreplaceable, and with no reforest ation programme in place, various attempts were 
made to enforce restrictions on logging activities, and a ban on logging took effect in early 2002.   
34. The wood products industry has contributed on ly minimally to GDP and national revenue.  
One reason is that Cambodian policy has focused  on extracting raw wood for foreign exchange 
earnings, encouraging the export of wood through its system of forest concessions. The forest 
                                                      
6 Food and Agriculture Organization (2010b), p. 8. Cambodia WT/TPR/S/253 
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concessionary system emphasized the exploitation of natural resources through large-scale logging, 
which depleted the natural forest and brought about wi despread deforestation.  In an effort to stop 
deforestation and encourage the processing of wood, the Government banned the export of 
unprocessed logs in 1996. In order to enforce the ban, it established the Forestry Crime Monitoring 
Unit within the Forestry Administration (the former  Department of Forestry and Wildlife). Also, in 
order to encourage timber processing, all processed wood products were exempted from taxes.  The 
ban on the export of unprocessed logs is generally  considered to have been unsuccessful, and 
deforestation remains a major concern in Cambodia.   
35. The decline in forestry stocks  has posed serious concerns. G overnment efforts to halt illegal 
logging and strengthen forest concession practices ha ve been insufficient. Small-scale, community-
based forests with strict adherence to technical  standards might be enough to cover demand for 
domestic wood consumption, but any continuance of large-scale commercial logging would require 
transparent and credible management, and would need to show compliance with environmental 
standards, and regard for social  impact assessments. As of 2010, there are 16 concessions covering 
3.4 million hectares but, according to the authorities, none of them is operational as they do not 
comply with the required strategic management and logging plan.   
36. According to the forestry authorities, exports of round logs have been officially banned since 
1997. Besides timber exports, non-timber forest pr oducts (notably rattan and bamboo) as well as 
wildlife are harvested for domestic use and export.  The 2006 Sub-Decree (No. 131) on Timber and 
Non-Timber Forest Products allowed for Expor t and Import, which superseded the 1997 ban, 
stipulates that logs or rough sawn timber are prohibi ted from export in order to enhance incentives for 
the local timber industry to produce high-quality, value-added products of a competitive standard. 
Most forestry products, however, appear to have been exported without significant value-added. 
(d) Fisheries 
37. Together with forestry and livestock, fisheri es are major sources of livelihood for the poor, 
with around 9% of the population depending on fisher ies for primary employment. Besides being the 
primary source of protein in the national diet, fi sh is also exported in significant volumes.  The 
fisheries sub-sector has been undergoing important reforms towards a more poverty-focused approach 
whereby local fishery communities play a bigger ro le in managing local fishing grounds.  The 
subsector is governed by the Law on Fisheries (pro mulgated by royal decree in 2006), which aims, 
inter alia , to ensure fisheries and fishery resource ma nagement, and enhance aquaculture development 
and the management of production and processing.   
38. The fishery sector contributed about 7.6% of  total GDP in 2010, down from 16.7% in 1993. 
The sector's sustainability has become a matter of debate due to ecological changes, such as falling 
water levels, heavy and rapid floodi ng, and loss of the forested regions once completely inundated by 
seasonal flooding in the Tonlé Sap, which have disrupted fish migration, breeding, and feeding 
patterns. The inundated forest area around the Tonlé Sap was the main breeding ground for the lake's 
fish but the repercussions of inundated forest land encroachment present a serious challenge to inland 
fishing, with the Tonlé Sap at risk of ultimatel y being silted over, as the mean depth of the lake 
continues to decline.  As the available fish suppl y has become scarcer, prices have risen sharply. 
Fisheries management practices are challenged by limited inputs for law enforcement and for 
implementation of the fisheries development plan at the central and community government levels. 
Insufficient regulations and enforcement of those in  place, have led to high levels of inefficiency. 
Although, ideally, individual fishermen and farmers could be educated on resource management, on a 
practical level they would likely find that their own poverty leaves them no alternative but to fish illegally during the banned season or to clear inundated forests for cultivation in order to survive.   WT/TPR/S/253 Trade Policy Review 
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39. Cambodia is one of the world's largest producer s of freshwater fish, which is harvested on a 
much larger scale than marine fishery and aquacultu re (Table IV.3). Fishing was transferred to the 
private sector in late 1993. Leases (or 'concessions') for lots on the Tonlé Sap and inland rivers are 
granted, following a public bidding process, to the highest bidder (Sub-Decree No. 18).  Inland fishing 
is both small and large-scale.  Under a licensing sch eme for fishing lot holders, the Government  
regulates large-scale fishing;  small-scale fishing is  widespread and accounts for about a third of the 
total catch.  
Table IV.3 
Fisheries production, 2005-09 
('000 tonnes) 
 2005 2006 2007 2008 2009 
Production      
Inland 324 422 395 365 390 
Marine 60 60 63 66 75 
Aquaculture 26 34 35 40 50 
Source:  Cambodian authorities. 
40. Annual exports were around 35,000 tonnes in 2010.   The major export markets for freshwater 
fish are Thailand and Viet Nam, meaning that Cambodia relies on demand from only two countries.  Diversification of the export destinations for fr eshwater fish would provide a significant opportunity 
to increase exports. According to the DTIS 2007, exports to Thailand and Viet Nam are generally 
informal but still subject to several formal and info rmal fees. Furthermore, Cambodia's ability to meet 
relatively high SPS standards almost everywhere is limited.    
(3) M
INING AND ENERGY  
41. Mining and quarrying contributed an estimated  0.5% of GDP in 2010; mining sector GDP 
increased, in real terms, at an annual average of  18.0% during 2000-08. Cam bodia's mineral resources 
include phosphates, gemstones, iron ore, ba uxite, silica sand, manganese ore, and gold. 
(i) Mining 
42. In 2008, Cambodia produced mainly industrial minerals, including limestone for cement, 
construction sand and gravel, a nd crushed stone for domestic c onsumption by the construction 
industry.  Production of construction sand incr eased to 6.5 million tonnes in 2008 from about 
809,000 tonnes in 2007. The sand is exported to Singapore for land reclamation and construction 
projects. Singapore has sought new supply sources fo llowing a ban on sand exports by the Indonesian 
Government in 2007, as a result of serious environm ental degradation. Other important minerals that 
have been discovered include bauxite, copper, zinc, gold, iron ore, gemstones coal, lignite, and silica 
sand.  Phosphate deposits are processed for use as fertilizer. Industrial production has increased over 
recent years as have the number of exploration licences granted to both foreign and local companies.  The mining sector in Cambodia is generally consider ed to be at an early stage of development. 
43. The Ministry of Industry, Mines and Energy, which implements Cambodia's policy and the 
Law on the Management and Exploitation of Mineral Resources, leads the effort in promoting and 
developing the mining sector. The General Department of Mineral Resources in MIME is responsible 
for the management of the mining sector. The MIME grants exploration and mining licences to investors. The mining licences are granted upon approva l of a final feasibility study by the Council for 
the Development of Cambodia.   Cambodia WT/TPR/S/253 
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(ii) Oil and gas 
44. For a number of years, the Government has b een seeking to promote the development of the 
country's petroleum resources, with the objectiv e of enhancing economic growth and providing 
opportunities for employment and participation in petroleum operations for Cambodian nationals and 
companies. The development and production of petrol eum resources could be expected to generate   
significant revenue for Cambodia and allow the country to continue to develop its infrastructure.  In 
recent years, significant exploration activity has been undertaken in Cambodia's petroleum sector, 
although oil and gas production has not yet stated.   
45. The Cambodian National Petroleum Authority (CNPA), which is under the authority of the 
Prime Minister's office, was set up in 1998 as the key governmental agency to oversee upstream and 
downstream petroleum activities in Cambodia.  Th e Petroleum Regulations of 1991 (as amended in 
1998 and 1999) is the principal law for the upstream oil and gas industry. 
46. The Petroleum Regulations prescribe the process for awarding contract areas in the form of 
petroleum agreements, entered into by the CNPA and a petroleum company and its partners. Under 
the Petroleum Regulations, exploration periods are gr anted for four years, and may be extended twice 
for two years each time. Royalties payable to the G overnment are at least 12.5% of the value of 
petroleum sold or disposed of.   
47. The Government and the CNPA are worki ng to develop and enhance the regulatory 
framework for petroleum exploration and exploita tion, having regard to the current stage of 
development of Cambodia's petroleum industry and ot her regulatory developmen ts that have occurred 
since the initial introduction of the Petroleum Re gulations in 1991. The centrepiece of the new 
regulatory framework is expected to be a Petr oleum Law, supported by appropriate implementing 
regulations. All existing petroleum agreements wi ll be protected for economic stability of the 
Petroleum Regulations of 1991 (as amended in 1998 and 1999) investment.  The Government is keen 
to promote domestic refining of any commercial quantities of oil that may be discovered in 
Cambodia, and of imported crude oil, and has stated its  desire for the development of an oil refinery.  
The authorities consider it premature to address the question of Cambodia joining the Extractive 
Industries Transparency Initiative (EITI).   
(4) UTILITIES  
48. Commercial fuels used in Cambodia are imported,  and domestic energy is principally derived 
from wood for household cooking.  In 2003, electrifi cation rates in Cambodia were among the lowest 
in the region:  only 17% of Cambodian households had access to electricity, compared with 84% in 
Thailand, 81% in Viet Nam, and 41%  in Laos.  By 2009, Cambodia's el ectrification rate had increased 
to 26%, with about 75% of the urban population in Cambodia having access to electricity but only 
13% of the rural population.  To  address this imbalance, the RGC has set the goal that all villages 
should have electricity by the year 2020.  Since about 80% of Cambodians live in rural areas, 
providing access to electricity to rural househol ds remains a major development challenge.  
49. The Ministry of Industry, Mines and Energy (MIME) is responsible for energy policy and 
planning, including overall guidelines a nd policies, relating to investment, restructuring, private sector 
participation, and privatization,  agreements on electricity import and export, and subsidies. The 
Electricity Authority of Cambodia (EAC), establi shed in 2001 by the Electricity Law, as an 
independent entity, is responsible for the sector's regulation, tariff setting, licensing, and standards 
supervision.   WT/TPR/S/253 Trade Policy Review 
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50. Electricity generation and distribution is mainly undertaken by Electricité du Cambodge 
(EDC), a Government utility. Most generation is  supplied by independent power producers (IPPs) 
licensed by EAC, through power purchase agreements.  They mainly use fuel oil, which results in 
high electricity generation costs.  This should chan ge with hydro-electricity generation scheduled to 
come online progressively from 2011, and should redu ce electricity prices particularly for rural 
consumers in the future. Some rural customers in remote regions of Cambodia are supplied by private 
sector rural electricity enterprises (REEs), a few of which receive supplies from connection to the EDC grid, but most use diesel, which result in high tariffs.   
51. EDC is implementing a major rural electri fication programme, with donor support, to 
accelerate the rate of rural electrification. This will also result in reduction in rural tariffs and make 
them more affordable to rural households and busin esses. This plan includes the extending EDC's grid 
to connect the rural electricity en terprises so that their customers can benefit from more affordable 
and reliable electricity supplies.  EDC's imports so me of its electricity supply from Thailand and 
Viet Nam and a supply line is been built from Laos .  Increased imported supplies are planned, through 
high voltage connections, which will progressively reduce electricity prices. 
52. The Ministry of Water Resources and Mete orology is responsible for developing and 
managing water resources, and the Ministry of Rura l Development is responsib le specifically for rural 
water supply and sanitation.  The MIME is also invo lved in supplying water for provincial capitals 
and small and medium-size towns, and of regulati ng the private sector involved in piped water 
systems. Phnom Penh is the only place that can supply water to the majority of its residents, reaching 
about 90% of the inhabitants of the city. The Phnom Penh Water Supply Authority provides clean 
water within the municipality. Solid waste manage ment systems exist only in certain urban areas in 
Cambodia. 
(5) M
ANUFACTURING SECTOR  
(i) Overview  
53. The manufacturing sector in Cambodia consists mostly of small and medium-size businesses. 
There were approximately 37,000 registered and unr egistered enterprises in 2010.  According to the 
authorities, about 18,000 are licensed establishments (mainly engaged in food processing) and 
19,000 do not require a licence as they are small with  capital investment of less than US$3,000. There 
are around 600 large enterprises (with capital invest ment of more than US$500,000);  the garment 
sector accounts for 75% registered industrial establishments.   
54. Cambodia's industrial policy has aimed to focu s resources and provide incentives to attract 
investment in sectors where Cambodia has comparat ive advantage and export potential.  Industrial 
policy consists of several elements:  developing labour-intensive industries, such as garments and 
footwear; developing the agri-processing sector and industries involved in processing other natural resources such as fish, paper,  cement and fertili zer production;  promoting SMEs, micro-enterprises 
and handicrafts by providing micro-finance, st reamlining procedures, and providing marketing 
services; promoting and facilitating exports in particular through the establishment of export 
processing zones by developing infrastructure, improving service quality, streamlining trade procedures and encouraging investments. These polici es, coupled with an escalating tariff structure, 
have sought to protect domestic industries from impo rt competition and to intensify export promotion 
efforts. Cambodia WT/TPR/S/253 
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(ii) Garment industry 
(a) Main features 
55. The garment industry is by far the most impor tant exporting industry in  Cambodia, generating 
over 69% of export earnings in 2008 (around 70% destin ed for the U.S. market), accounting for about 
15% of GDP, with total employment in the formal sector of about 320,000, the bulk of the 
manufacturing workforce (Table IV.4). Volume  growth averaged 11% per year over 2005-08. 
Subsequently, the severe impact of the global sl owdown on Cambodia's garment industry was a major 
cause of the contraction in economic activity. Over  the first nine months of 2009, export volumes 
were down about 16% compared with the same period in 2008.  Around 40 factories (net) closed and 
as of June 2009, some 40,000 jobs had been lost, a nd retained workers earned about 20% less than in 
2008 as a result of reduced overtime. To help keep jobs and exports steady, the Government suspended a 1% Advance Profit Ta x and announced temporary assistance of 0.3% of net wages for 
factories' payments to the National Social Secur ity Fund. Both measures are in force until the end 
of 2012. 
Table IV.4 
The garment sector, 2004-10 
 2004 2005 2006 2007 2008 2009 2010 
Exports (US$ million) 1,958  2,167 2,626 2,840 2,942  2,388  2,994 
U.S. share of exports (%) 64 71 72 70 67 62   60 
EU share of exports (%) 29 22 22 22 22 24  23 
Factories in operation 219 247 290 292 284 243 262 
Employees ('000) 270 284 334  353 325 282 319 
Source: MOC/TPD.  
56. The outlook for Cambodian garment exports is clo uded by structural changes in the market as 
well as lagging competitiveness.  The long anticipated  consolidation of the garment industry as a 
result of the expiry of quotas and safeguards unde r China's WTO accession agreement appears to be 
in progress, while FTAs between other low-income country (LIC) producers and the United States are 
increasingly putting Cambodia at a disadvantage. Un it prices for Cambodian garments continue to 
decrease (by more than 7.0% in 2008 and 2009), as a result of aggressive competition, particularly 
from China, Viet Nam, and Bangladesh. Furthermore,  growth margins in the garment industry were 
expected to become even narrower as a result of th e expiry, at the end of 2008, of safeguard measures 
imposed on China by the United States and the EU , as Cambodia was not regarded as internationally 
competitive. The United States has granted quot a-free, duty-free access through various trade 
agreements to 30 (of 49) non-Asian LICs, whereas Ca mbodia is subject to an average 16% tariff on 
garment imports. Cambodia is urging the Unite d States to grant it preferential access. 
57. The ability of the Cambodian garment sector to respond to changes in the trade environment 
and policy initiatives will be influenced by a numbe r of key features, including: manufacturing being 
limited primarily to cut-and-assemble; lack of do mestically produced textiles for use in garment 
factories; low productivity compared with competitors; importance of the United States as a final 
destination and concentration on a few buyers; garment export firms almost exclusively foreign-
owned;  and the ILO Better Factories Cambodia brandi ng.  Partially due to stagnant wages, frequent 
strikes and low worker productivity constrain the industry.    
58. Competitiveness in Cambodia is hampered by lower productivity, the unreliable supply and 
high cost of electricity (about 15% of total cost), hi gh transport costs, and protracted transport time to 
market. According to the Garment Manufactur ers Association of Cambodia (GMAC), total WT/TPR/S/253 Trade Policy Review 
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manufacturing cost is about 20% higher than in ne ighbouring Viet Nam, despite lower hourly wages, 
with key factors being lower productivity, higher elec tricity costs (22 cents per KWh versus 7 cents in 
Viet Nam), and less developed infrastructure such  as ports and roads (getting a container to port 
reportedly costs about five times that of Viet Nam).  Added to this is the high cost of export due to 
charges related to trucking goods to port and form al and informal charges demanded by customs. 
59. More than 90% of garment factories are fore ign-owned;  Chinese Taipei owns around 35% of 
the capital of the garment industry, China and Hong Kong, China each own about 20%, and the 
Republic of Korea owns 12%. A significant share of th e profits are repatriated. Direct contributions to 
the Budget have been limited as the sector enjoys import tax exemptions as well as tax holidays.  
(b) Cambodia's trade in garments   
60. The garment industry developed rapidly afte r Cambodia was granted MFN status by the 
United States in 1996. At the same time, Cambodia benefited fro m the development of the Multi-
Fibre Arrangement (MFA), which imposed a quo ta system on most large garment-exporting 
countries, and attracted foreign investors from Hong Kong, China, Chinese Taipei, Malaysia, and 
Korea, taking advantage of Cambodia's original quota -free status.  Exports grew rapidly, and by 1998 
the United States started negotiations to bring Cambodia into the quota system.  In 1999, Cambodia 
and the United States concluded a bilateral trad e agreement on textiles and apparel, which linked 
market access (export quotas) to labour standards in Cambodia.   
61. Cambodia is the only country with such a trade-labour arrangement, securing it a quota for 
exports to the United States. Monitored by the In ternational Labour Organiza tion, the programme was 
regarded as a major advantage in the sourcing stra tegies of foreign buyers and assisted Cambodia in 
creating a niche market for its garments. According to Better Factories, around three quarters of the 
garment workforce are employed in large factories of 1,000 workers or more, and over 90% of workers in these factories are wo men.  Apart from benefiting workers, the Cambodian system 
appealed to brands embracing ethical approaches to  manufacturing and corporate social responsibility.  
Parallel to this has been the growth in the EU  market, which accounts for around 22% of Cambodian 
exports with the remainder going to Canada, South Korea and Japan.  
62. The expiry of global quotas under the ATC on 1 January 2005 resulted in significantly 
increased competition among individual ASEAN countries as well as among global competitors who supply the U.S. and EU markets.  Large U.S. and EU retailers consolidated their supply bases because 
the availability of quotas was no longer a significant factor in deciding where to have their goods 
produced. Due to the intense retail competition, it appears that quick turnaround and delivery times 
have become an important factor in choosi ng suppliers. For Cambodia, competition among the 
ASEAN countries increased as Viet Nam, an effi cient and low-cost apparel producer gained full 
access to the U.S. market in 2006 and became a member of the WTO in 2007. 
63. During the quota era, exporting firms were eff ectively taxed through the prices they had to 
pay for licences to export to the United States;  th e Export Tax Equivalent has been estimated at 8% 
on average and up to 29% of f.o.b. values on so me successful items.  Cambodia's quota amount was 
allocated among producers by auction.  Currently , there are no export licences or export taxes on 
garments. 
(c) Value chain  
64. Cambodia captures only a relatively limited share of  the value chain and the value added, as it 
is only involved in the "cut, make and trim" (C MT) phase, meaning that the supplier controls the 
designs and fabrics used but outsources the labour-intensive jobs.  Almost all inputs for the sector are Cambodia WT/TPR/S/253 
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imported (around two thirds of garment raw materials imported in 2008 came from China) and 
Cambodia does not have a textiles industry. In orde r to provide the necessary support to attract 
domestic fabric production, Cambodia provi des attractive investment incentives. 
(6) POLICIES AFFECTING TRADE IN SERVICES  
(i) Introduction  
65. Services comprise nearly 40% of the Cambodian  economy;  their importance should increase 
as Cambodia develops, although the share of services in total output has remained stagnant in recent 
years. Because of the importance of tourism, one of the four principal drivers of Cambodian growth in 
the past decade, Cambodia is a net exporter of ser vices.  Tourism's revenue contributes around 10% of 
GDP.  Cambodia is also keen to develop crucial infrastructure services, including financial services, 
telecommunications, and transport, although many ch allenges constrain the availability of high quality 
services at reasonable cost.  In th is respect, Cambodia adopted a relativ ely liberal regime for trade in 
services as part of its accession to the WTO.  
66. Cambodia undertook market access commitments ac ross the full range of services sectors.   
Cambodia included 74 subsectors in its GATS Schedul e, some with full subsector commitments, and 
others with partial commitments and transition pe riods (for example, up to 1 January 2009 for the 
telecommunications sector). In its horizontal commit ments, foreigners may lease but not own land in 
Cambodia, and foreign investors must take on the ob ligation of training Cambodian staff.  Mode 4 is 
restricted to business-related visitors, persons r esponsible for setting up a commercial presence, and 
for intra-corporate transferees.7 
67. Cambodia's commitments reflect its development policies, aimed in particular at attracting 
foreign investment.  In line with its strategy for services, Cambodia focused on areas that would 
contribute to improving services required by busin esses to enhance the environment for investment. 
For example, Cambodia committed itself to allowing foreign firms to operate legal services (with some exceptions), accounting, auditing, bookkeeping, banking, management consulting, telecommunications, and transport. In these areas, Cambodia took on commitments in sectors where it 
had long had an open policy regard ing foreign participation and where that policy has served the 
country well.  However, where Cam bodia saw an advantage in reservi ng part of a market for domestic 
small and medium enterprises, it did so. For exampl e, it committed to opening its hotel market only 
for hotels of three stars or higher, and allowing foreign supply of retailing services only for a small 
number of specific items or for very large supermarkets or department stores.    
68. At the regional level, ASEAN leaders have committed to achieving free and open trade, 
including trade in services, by 2015. The ASEA N Framework Agreement in Trade in Services 
(AFAS) was initiated in 1995.  So far, seven pack ages of regional services trade liberalization have 
been endorsed. 
69. Generally, services markets are quite open. 
Accounting, consulting and tax services 
70. Cambodia provides market access and national treatment to foreign firms providing 
accounting, auditing, and taxation services.  Majo r international accounti ng and consulting firms 
operate in Cambodia. 
                                                      
7 WTO document GATS/SC/140, 25 October 2005. WT/TPR/S/253 Trade Policy Review 
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Legal services 
71. Cambodia agreed to allow foreign lawyers to su pply legal services with regard to foreign law 
and international law.  It also agreed to allow th em to supply certain legal services with regard to 
Cambodian law in "commercial association" with Cambodian law firms.  The commitment defines 
"commercial association" as any type of commerci al arrangement, without any requirement as to 
corporate form.  Efforts by Cambodian law firms to propose a 49% equity limitation on foreign firms and restrictions on their forms of commercial arrangement, although unsuccessful, have exposed 
ambiguity in Cambodia's regulatory regime and introdu ced a measure of legal uncertainty for firms in 
this sector. 
Architectural and engineering services 
72. Cross-border supply for architectural services is not restricted, and national treatment is 
granted.  Foreign citizens may provide engi neering and integrated engineering services. 
Audiovisual services 
73. Cambodia does not prohibit foreign firms from distributing foreign films and videotapes.  
However, despite recent improvements, difficulties in the enforcement of the IPR regime persist, and 
legitimate foreign and domestic products are scar ce and expensive wherea s pirated products are 
abundant and cheap. 
Distribution services 
74. No limitation on market access or national treatment is imposed on foreign firms wishing to 
engage in distribution services, i.e., wholesale tr ade and retailing services.  Like other business 
activity, foreign firms are required to register w ith the Ministry of Commerce to obtain a business 
license. 
Educational services 
75. Cambodia faces a shortage of qualified teachers and is in need of international-quality 
educators and education.  Foreign participation in higher and adult educational services is not 
restricted.  There are several foreign-owned schools in Phnom Penh. 
Health-related services 
76. Cambodia permits cross-border supply of hosp ital services.  For commercial presence, foreign 
ownership and management of privat e hospitals and clinics is permitted as long as at least one director 
for technical matters is Cambodian.  Firms from ASEAN countries are allowed to provide dental 
services through joint ventures with Cambodian legal entities. 
E-commerce 
77. Electronic commerce is a new concept in Ca mbodia.  Online commercial transactions are 
extremely limited, and Internet access is still in its in fancy, in particular outside the major cities.  The 
Government has not imposed any specific restricti ons on products or services traded via electronic 
commerce and no existing legisla tion governs this sector.  The G overnment is drafting electronic 
commerce legislation. Cambodia WT/TPR/S/253 
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(ii) Tourism 
(a) Main features 
78. Tourism has emerged as a major source of fore ign exchange earnings since stability returned 
to Cambodia.  The main attraction is the Khmer archeological treasures in the Siem Reap region, 
beginning at Angkor Wat. Foreign visitors now numb er over 2.5 million per year,  more than ten-fold 
the number of international arrivals reported in 1995 (Table IV.5).  Tourism is regarded as one of the 
most important immediate and long-term sources of foreign exchange, bringing in over US$1.7 billion 
per year and generating direct and indirect employment opportunities for an estimated 300,000 people.  
Table IV.5 
Tourism sector, selected years 
 1995 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 
Visitor arrivals ('000) 220 466 787 701 1,055 1,422 1,700 2,015 2,125 2,162 2,508 
Annual % change 24.3 26.8 30.0 -10.9 50.5 34.7 19.6 18.5 5.5 1.7 16 
Tourism receipts (million US$) 100 228 379 347 578 832 1,049 1,400 1,595 1,561 1,786 
Average length of stay (days) 8.0 5.5 5.8 5.5 6.3 6.3 6.5 6.5 6.6 6.5 6.45 
Number of rooms .. 9,673 11,426 13,201 14,271 15,465 17,914 20,470 20,678 23,010 24,393 
Hotel occupancy (%) 37 45 50 50 52 52 55 55 63 63 65.7 
.. Not available. 
Source:  Ministry of Tourism  
79. The outbreak of Severe Acute Respiratory Syndrome (SARS) in the region in 2003 
contributed to a decline in foreign tourist arrivals in  that year. The number of tourist arrivals increased 
sharply in 2004, reached 2 million in 2007, and ex ceeded 2.1 million in 2008, when receipts increased 
to more than US$1.5 billion.  While the tourism sector had become one of the main sources of economic growth and had attracted a high propor tion of foreign capital investment, the global 
financial crisis of 2008/09 resulted in a decrease in  tourism income in 2009. Since 2007, tourism in 
Cambodia has decelerated, suspending its double-digit average growth of the previous decade, but a 
significant recovery was recorded during the first half of 2010.  The number of hotel rooms of 
sufficiently high international class in Seam Reap tr ebled from 3,000 in 2002 to over 9,400 in 2010.  
80. During the review period, around two thirds of vi sitors, mainly from the Asia-Pacific region, 
arrived by air, most at Siem Reap airport (Table IV.6).  The decline in the number of visitors to Cambodia in 1997 prompted the Government to in itiate what the authorities call an 'open skies' 
policy, in accordance with which direct flights from overseas would be pe rmitted to land in Siem 
Reap. The authorities note that this has contributed to the rapid growth of tourist arrivals over the past 
decade. They also recognize that the value added in tourism is low and are seeking to ensure that most 
of the benefits of tourism remain in the country.  81. The Government expects tourist numbers to con tinue increasing as it opens up new attractions 
throughout Cambodia. The airport in the southern beach town of Sihanoukville  was recently expanded 
and upgraded to accommodate large aircraft and the Government has approved many resort 
development projects by international and local deve lopers for local islands, the southern coastline, 
and mountain properties. Cambodia is also looking to open up the country's ample forested areas to ecotourism.  Tourism development, based on sustaina bility and the natural environment, is focused  
mainly in Siem Reap and its surroundings; Phnom Pe nh;  the coastal zones;  and the ecotourism area 
in the northeast. 
 WT/TPR/S/253 Trade Policy Review 
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Table IV.6 
International visitor arrivals by mode of tran sport and country of residence, 2003, 2007, and 2010 
(% of total) 
 2003 2007 2010 
Total visitor arrivals 701,014 2,015,128 2,508,289 
Arrivals by airplane 65.0 64.3 52 
Phnom Penh airport 38.5 26.6 23.6 
Siem Reap airport 26.6 37.8 28.4 
Other types of arrivalsa 35.0 35.7 48.06 
Arrivals to Phnom Penh airpor t by country of residenceb    
Asia and Pacific 62.2 64.3 67.7 
Europe 22.6 20.6 19.5 
North, South, and Central America 14.7 14.7 7.9 
Africa and Middle East 0.5 0.4 0.49 
a Arrivals by land and boat. 
b Arrivals at Pochentong (Phnom Penh) airport only. 
Source:  Ministry of Tourism.  
82. Large-scale international tourism in Cambodia is a relatively recent development, dating from 
the country's return to stability. Although Cam bodia has important attractions its own right – 
primarily because of Angkor's status as a world her itage site, the in-bound tourism business is closely 
linked to the Southeast Asian region. While many tr avel directly to Siem Reap, notably Koreans and 
Japanese, many other visitors travel as part of a la rger tour of Southeast Asia, and while Cambodia's 
air transport infrastructure is developing (with several daily flights from Viet Nam and Bangkok), the 
major regional air hubs lie elsewhere, notably in Tha iland.  The growth of tourism has also attracted 
increasing foreign investment in hotels and ancillary  services like travel agencies and tour operators, 
many of which have foreign ownership.   
(b) GATS commitments  
83. The sector is fully liberalized except for a restriction for mode 3. Cambodia intends to provide 
the opportunity for any Cambodian who has a small amount of capital to find their own partners to 
build 1- or 2-star accommodation or guest houses.  The limitation in the Schedule is to preserve business opportunities for Cambodians, but it appears th at current practice is more liberal than the 
scheduled commitment. Foreign companies may esta blish a commercial presence to operate hotels, 
restaurants, and tour operator services, provide d that they register with the MoC.   
84. Cambodia has no restriction on travel agencies,  but tour guides must be Cambodian.  At 
present, 100% ownership of travel agencies and t our operator services is allowed. Tourist guide 
services are sensitive as they provide employment fo r lesser-skilled individuals, including women and 
young people. This limitation is in line with th e development goals and objectives of Cambodia and 
with provisions of GATS Article XIX.2 and the Decision on Accession of LDCs.    
85. Cambodia made a commitment in restaurant ser vices where permits are granted taking into 
account the characteristics of the ar ea, such as the number of and impact on existing restaurants, 
historical and artistic characteristics of the locati on, geographical spread, impact on traffic conditions, 
and creation of new employment.  
(c) Regulatory framework 
86. While tourism has been one of the four pilla rs of Cambodia's strong economic growth in 
recent year, regulatory uncertainty appears to have been a key constraint to even stronger growth.  Cambodia WT/TPR/S/253 
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Unclear delineation of responsibilities among government  agencies led to the tourism sector being 
governed by multiple, and sometimes conflicting, pr akas and sub-decrees of different ministries and 
agencies.8  The 2009 Tourism Law addresses these issues and has the dual objective of promoting 
growth in the sector and meeting the private sector 's demands for a simpler a nd more predictable legal 
framework to reduce business risk and encourag e greater investment. Significantly, the law 
recognizes the importance of private-sector consulta tion in developing the re gulatory environment, 
relating, inter alia,  to the prakas and sub-decrees governin g the sector, the establishment of the 
Cambodia Tourism Marketing Promotion Board, and th e determination of criteria for tourism licences 
and of standards and requirements for quality assurance.  
87. The law also better defines the role of the Tourism Ministry in facilitating the development of 
the sector and in dispute resolution.  It defines ar eas in which the Ministry has primary responsibility 
(including ensuring the quality of the touris m sector, standards, licensing, management and 
monitoring of tourism information), and where th e Ministry has shared responsibilities with other 
relevant agencies (environmental protection, tour ism investment and incentives, privatization of 
SOEs, eco-tourism, food hygiene and sanitation, tour ist safety and security, and prevention of sexual 
exploitation). The tourism development plan is c ontained in the Tourism Development Strategy 2011-
2020 and the National Ecotour ism Policy and Strategy.  
(iii) Transport services 
88. An evaluation of trade-related policies and develo pments in the transport sector must consider 
the state of the transport infrastructure around the time of the Paris Peace Accords, which reflected the 
damage inflicted by two decades of hostilities, want on destruction and subsequent neglect. Over half 
the road network was in disrepair, many of the country's bridges destroyed, the railway network could not maintain regular services and the two ports lacked essential equipment.  Following the difficult 
and lengthy recovery process, the Government initiate d a large reform agenda.  It has enacted a Road 
Traffic Law and seeks to rehabilitate and reconstruc t as many roads as possible, involve the private 
sector in road construction and maintenance;  a nd in the civil aviation sector, improve Cambodia's 
international airports and raise the standards of  selected airports with high tourism potential.  
However, market failure is still common in the domestic transport system and, as a result, the 
international competitiveness of Cambodia's main export industries (garments and tourism) is 
undermined by high transaction costs;  the potentia l for diversifying the economy into other sectors 
such as agri-industry and assembly is correspondingly limited. 
(a) Overview 
89. Cambodia's transport system comprises road a nd rail, ports and harbours, inland waterways, 
and civil aviation. Road transport is the dominan t mode, with a share in total transport output 
estimated at 65% for passengers and 70% for fre ight.  The ongoing rehabilitation of Cambodia's rail 
network will allow rail transportation to play a more  important role in the near future. The mainly 
private road trucking industry is competitive and gr owing, and internal competition means that road 
freight tariffs are market-driven. International sh ipping is also competitive, with shippers having 
ready access to Viet Nam's new deep water ports, and five different feeder lines competing for containers on the Singapore-Sihanoukville route.  Th ere is also competition between regional shipping 
lines for petroleum products and general cargo deliver ed to Sihanoukville.  Domestic civil aviation is 
important for the growing tourism industry but its contribution to overall transport output is very 
limited.   
                                                      
8 International Finance Corporation (2008). WT/TPR/S/253 Trade Policy Review 
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90. Responsibility for managing the transport sect or is divided among various government 
agencies. The Ministry of Public Works and Tr ansport (MPWT) is responsible for planning, 
developing and, to some extent, managing the sector . It has oversight functions for national roads, 
road transport, railways, ports, in land water transport, coastal and in ternational shipping, and airport 
construction. The Department of Transport, within th e Ministry, is responsible for vehicle registration, 
inspection, and road safety, and the Ministry of Ru ral Development is in charge of the development 
and maintenance of rural roads. The railway networ k is currently operated by a private company and 
owned by the Royal Railway of Cambodia. 
91. Cambodia has two major ports, Phnom Penh (the ma jor river port) and Sihanoukville, situated 
in the Gulf of Thailand, which is Cambodia's only major deep-sea port. Sihanoukville's total 
throughput in 2010 was about 2.2 million tonnes.  Previously operated as gove rnment departments, 
the ports of Phnom Penh and Sihanoukville becam e autonomous port authorities in 1998. Their 
governing boards report to the Council of Ministers, MEF, and  MPWT.  The Minister has veto rights over port tariffs and other policy matters but ther e is no other form of economic regulation.  
92. The State Secretariat for Civil Aviation (SSCA) is  responsible for the control, regulation, and 
development of the civil aviation sector and the opera tion of domestic airports. The main legislative 
instruments governing the SSCA are the 1996 Royal Decree on the formation of the SSCA, Sub-Decree No.12 on its functioning, the 2008 Civil Av iation Law, and the civil aviation regulations.  
93. Cambodia has ten airports, including internationa l airports in Phnom Penh, Siem Reap (each 
handling about 1.4 million passengers per year), a nd Sihanoukville.  Domestic freight traffic is 
insignificant. The civil aviation industry has undergon e major changes to improve its compliance with 
international safety and security standards and to en courage private-sector participation in operating 
the terminals. In this regard, concessions have been  awarded to operate Cambodia's main international 
airports. Upon the financial bankruptcy of Roya le Air Cambodge, the Government introduced its 
"open-sky policy", allowing foreign carriers to operate in Cambodia. In 2010, Cambodia Angkor Air 
was created as the new national carrier as a joint venture with Vietnam Airlines.    
(b) Transport as an export sector 
94. Cambodia has a relatively small international freight market with no major bulk commodity 
flows. The export of transportation services plays only a limited role in the country's export portfolio. Cambodia is a net importer of maritime transport services, in particular sea freight services, as it owns few vessels. 
95. In its initial GATS offer, Cambodia limited the ownership participation of foreign service 
suppliers in road transport services to 49%.  For transport and related services, the requirement of 
commercial presence of 49% equity is based on the ra tionale of fostering infant industry or giving a 
chance to small local operators.  Some WTO Member s asked Cambodia to remove the foreign equity 
limitation for commercial presence for passenger transpor tation, freight transportation, and rental of 
commercial vehicles with an operator.  Cambodia ag reed to remove the 49% foreign equity limitation 
for commercial presence on road transport services and to make a commitment in maritime services for non-discrimination on access to port facilities (under additional commitments). 
96. Cambodia opened market access for aircraft repair and maintenance, the selling and 
marketing of air transport services, and computer rese rvation systems. This has been extended to all 
ASEAN members under the AFAS.  Generally, Cambodi a has an interest in supporting air transport 
liberalization in the ASEAN region to help the growth of tourist traffic, increase the choice of flights 
serving the country, and keep costs down.   Cambodia WT/TPR/S/253 
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(iv) Financial services 
97. A significant contributor to economic developmen t and trade is the availability of credit. 
However, in the wake of the civil strife and de monetization under the Khmer Rouge (1975-79), bank 
credit to the private sector in Cambodia has improved but remains low, at about 26% of GDP.  The 
World Bank described Cambodia as top reformer in  terms of easing access to credit through the 
recently approved Secured Transactions Law, wh ich made it easier for businesses to qualify for 
loans.9  Over 95% of banking system deposits are denom inated in U.S. dollars, and rural areas are 
primarily served by micro-finance institutions (M FIs), accounting for less than 10% of financial 
system assets. 
98. Nevertheless, the financial sector underwent impr essive expansion durin g the review period, 
from a very small base. Total banking assets, for ex ample, rose from 26% of GDP in 2006 to over 
54% in 2010, a significant improvement but still well  below the average of 90% in other emerging 
Asian markets.  In 2010, the formal financia l system comprised the National Bank of Cambodia 
(NBC), 35 banks, 20 licensed MFIs, and 6 insurance companies.  Regarding the sector's overall policy and planning framework, the Government's Vi sion and Financial Sector Development Plan 
(2001-2010) delineates a framework of reforms. It was updated to take into account the acceleration 
of Cambodia's economic development, and became the Financial Sector Development Strategy 2006-
2015 (FSDS), which aims to achieve a sustainabl e approach to financial sector development.  
99. In accordance with the FSDS, th e Government hopes to establish a stock exchange by 2012 as 
joint venture with the Korea exchange, which requires, inter alia , a new securities law and the 
strengthening of public auditing capacity. It seems th at financial markets are developing more slowly 
than either banking or insurance.  
(a) Banking 
100. After expansion in 2007 and 2008,  35 banks are in operation (Table IV.7);  just six banks 
accounted for 75% of all assets in 2010, making the banking system highly concentrated.  From a 
capital perspective, Cambodian banks look healthy.  Official capital adequacy ratios were 31% at 
end 2010, and non-performing loans (NPLs) have remain ed manageable in 2010 at 2.3% of the total, 
down from 19.4% at end 2006.  However, accordi ng to the IMF, the core financial soundness 
indicators compiled by the NBC are based on unrelia ble data reported by the banks, and the credit and 
solvency risks, as represented by their NPL a nd capital adequacy ratios, may be substantially 
underestimated.
10 
101. Regulation of banks is improving but remains weak.  The NBC is responsible for monetary 
policy and prudential oversight of the banking system and MFIs. The IMF notes that the responsibilities of the NBC's Banking Supervision Depa rtment outstrip its capacity and resources. The 
NBC has limited regulatory capacity, which appears to  have been strained by recent expansion in the 
sector.  The bank has announced that it will incre ase the frequency of its bank audits but actual 
enforcement of regulations remains limited, in par ticular with regard to capital adequacy and loan 
provisioning.  
102. Legislation and regulations rela ted to banking have been devel oped and/or updated during the 
review period. The 1999 Law on Banking and Financia l Institutions, which created the framework for 
licensing institutions and for their supervision, has undergone a comprehensive review to update and 
improve prudential and supe rvisory practices in compliance with international standards and best 
                                                      
9 World Bank (2008). 
10 IMF (2010), p. 17. WT/TPR/S/253 Trade Policy Review 
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practices.  The framework for the creation of a paym ents and settlement system was established in the 
2005 Law on Negotiable Instruments and Paym ents Transactions, while a Law on Anti-Money 
Laundering and Combating Financi ng of Terrorism was passed in 2007. The Law on Financial 
Leasing, designed to facilitate and determine the ri ghts and duties of all parties involved in financial 
lease operations, was promulgated in 2009. However,  according to the authorities, it has not been 
widely used under prevailing market conditions.   
Table IV.7 
Financial soundness indicators, 2006-10 
 2006 2007 2008 2009 2010 
Number of banks 20 24 30 33 35 
Commercial banks 15 17 24 27 29 
of which:  state-owned banks 1 1 1 1 1 
Specialized banksa 5 7 6 6 6 
Bank concentration – number of banks accounting for:      
25% of banks' total assets 2 2 2 2 1 
75% of banks' total assets 7 6 6 7 6 
Capital adequacy (%)      
Regulatory capital to risk-weighted assets 26.5 23.6 27.8 31.1 31.4 
Capital to assets 20.0 17.0 22.0 22.1 22.9 
Non-performing loans net of provisions to capital 19.4 8.2 7.5 8.7 2.3 
Asset quality (%)      
Non-performing loans to regulatory total loans 9.5 3.4 3.7 4.4 3.1 
Sectoral distribution of loans (%  of total loans)      
Real estate 8.6 7.9 7.5 6.3 4.6 
Construction 7.7 10.2 7.9 8.6 7 
Consumer 10.2 19.7 21.8 19.8 16.8 
Earnings and profitability (%)      
Return on assets 2.8 2.8 2.9 1.3 1.44 
Return on equity 14.2 16.6 13.1 5.6 6.63 
Memorandum  items:      
Banks' assets (% of GDP) 26.0 38.4 37.3 47.0 54.6 
a Specialized banks are lending institutions that do not take depos its and are subject to lower capital requirements than comme rcial 
 banks. 
Note: Figures are for December. 
Source:  National Bank of Cambodia;  and IMF (2008) – Cam bodia, Statistical Appendix, December (staff estimates).  
103. Cambodia allows foreign banks to operate as e ither 99% foreign-owned subsidiaries or as 
branches. The 1999 Law on Banking and Financial Ins titutions and subsequent  regulations guarantee 
foreign banks' rights and obligatio ns equal to local banks, and the law imposes no restrictions on 
foreign ownership of banks.  Upon acceding to the WTO, Cambodia undertook commitments to 
liberalize market access for most commercial banki ng activities, subject to the requirement that 
deposits received by foreign banks be reinvest ed in Cambodia and that commercial presence be 
through authorized banks.  Under the ASEAN pr ocess for liberalization of financial services, 
Cambodia has not made any further commitments beyond its GATS schedule.11    
                                                      
11 Cambodia initially put forward a limited services offer under commercial banking services, 
comprising (i) acceptance of deposits and other repayable funds from the public, and (ii) lending for financing 
of commercial transaction and productive investment. A ccording to the authorities, Cambodia took the position 
that it could not commit to market access in sub-sector s for which it was unable  to provide appropriate 
prudential regulation.  Cambodia WT/TPR/S/253 
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(b) Insurance  
104. Cambodia's insurance market is small but h as grown rapidly since the implementation of 
insurance legislation in 2001, and much of the bu siness that had been written off-shore is now being 
placed in the local market. The insurance industr y comprises six direct writing companies (mainly 
joint-venture companies with varying amounts of fo reign capital) and one reinsurance company. The 
state-owned company, Cambodia National Insurance Company (Caminco), has been privatized. The 
main lines of business underwritten are fire, automob ile, and engineering insurance. The share of 
insurance premiums in GDP is small, at only 0.22 % in 2010 (compared with 1.6% in Viet Nam and 
3.5% in Thailand).   
105. The Ministry of Economy and Finance has responsibility for insurance as well as for financial 
markets. A regulatory framework is under developm ent, based on the Law on Insurance, which was 
introduced in 2000. The law has been amended a nd detailed regulations are being drafted on the 
supervision of life insurance companies. In additio n, Cambodia has introduced compulsory third-party 
liability insurance for commercial motor vehicles, public transport, and for workers' compensation on 
construction sites.   
106. There are no legal barriers to entry of fore ign insurance providers, which are allowed to 
establish a commercial presence through a branch. Natural or juridical persons of Cambodia may 
enter into contracts only with insurance compan ies licensed to carry out insurance business in 
Cambodia. Under the GATS, Cambodia undertook to open its market for insurance (life, non-life, reinsurance, and ancillary services) with one  important limitation: until 31 December 2008, 
companies had to reinsure 20% of their risks with  Cambodia Re, as stipulated in the sub-decree on 
insurance that requires all licensed insurers in Cambodia to cede at least 20% of their insurance 
premium to Cambodia Re.  Cambodia Re is 80% ow ned by the Government with the balance owned 
by a consortium of foreign insurers in the region.   
107. According to the authorities, since its incepti on in 2003, Cambodia Re has made significant 
contributions to the national economy by retain ing premiums that can be used for productive 
investments in the country. In addition, it is building capacity among the insurance companies to 
make the industry more resilient and self reliant. The Government is of the view that Cambodia Re 
needs more time to strengthen its competitiveness both financially and technically  before it can fully 
face overseas competition. 
(v) Telecommunications 
(a) Overview 
108. Development of effective, modern telecommuni cations was constrained by confict, and the 
sector's infrastructure is limited in scope, in par ticular fixed-line networks to deliver the bulk of 
industrial-grade data demands. Further, there is an acute development imbalance between the public 
and private sectors.  Between 2001 and 2009, m obile subscribers increased from 150,000 to 
6.3 million, while fixed-line subscribers rose from 23,0 00 to barely 101,000.  By 2012, it is estimated 
that there will be 12 million mobile subscrib ers and only 50,000 fixed-line subscribers.  In the 
important Internet sector, Cambodia had only 8,000 broadband subscribers in 2008 , perhaps due to the 
high price of access. An improvement in affordability should increase the uptake of fixed-line connections, for Internet as well as voice, and drive an increase in the volume of total traffic.  
109. The most widespread infrastructure is currently  the mobile companies' networks with more 
than 80% coverage and the progressive rollout of 3G services available in the cities. Before 2010, 
Mobitel, jointly owned by the Royal Group (Cam bodia) and the Millicom Group (Luxembourg), had WT/TPR/S/253 Trade Policy Review 
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an estimated 60% of the market.  Other important providers of mobile services are Camshin 
(Thailand), TMIC (a joint venture between Telecom Malaysia and Samart of  Thailand), and Viettel 
(with 5 million subscribers since 2009).  While the mo bile market is strong, the demand for bulk data 
services will require cable connections and a compre hensive broadband network.  There are currently 
eight mobile phone companies operating in Cambodia.  
(b) Regulatory framework 
110. The Ministry of Posts and Telecommunications  (MPTC) is the telecoms policymaker and 
regulator.  It was also operator of the fixed-line network but in January 2006 separated its telecom 
operation arm and established Telecom Cambodia (TC)  to provide fixed-line services. As the law on 
telecommunications is yet to be approved by the National Assembly, and the telecom regulatory body 
has not yet been established, the MPTC still acts as  policymaker and regulator.  The policy objectives 
of the draft law, as adopted by the Council of Minist ers in 2006, are to ensure cost-efficient, timely, 
and innovative telecommunication services for existi ng and potential users through the promotion of 
fair competition and efficient investment. According to the authorities, the draft law is based on the 
principles of: competitive safeguards; interconnecti on; public availability of the procedures for 
interconnection negotiations; transparency of in terconnection arrangements; interconnection dispute 
settlement; universal service; public availability of  licensing criteria; independent regulator; and 
allocation and use of scarce resources.12   
111. For the most part, access to Cambodia's tel ecoms market is not restricted.  Private 
participation in mobile services, e-mail, electronic data interchange, and code  and protocol conversion 
are allowed and national treatment is accorded.  In addition, Cambodia is committed to permitting 
licensed suppliers of mobile communications ser vices to choose which technology to use.  The 
restriction that cross-border supply for voice telephone  services, circuits-switched data transmission, 
and private leased circuit services was allowed onl y over circuits leased from Telecom Cambodia was 
eliminated in January 2009, and foreign participa tion of up to 51% equity is allowed.  Under the 
GATS, Cambodia agreed to open fully some s ub-sectors immediately upon accession; for other 
subsectors the commitment was to give full market access no later than 1 January 2009 with foreign 
ownership allowed up to 51% of the capital of joint-ventures.   
                                                      
 12 The draft law has been drawn up to comply with the Telecommunications  Reference Paper, which 
contains the principles of inter-connection; spectrum management (issue of licence, or auction, acquittal of 
accounting rate on MFN and national treatment basis); safe guards; and the regulatory side separated from the 
supply side.  It also requires Members to provide for competitive safeguards designed to prevent anti-competitive practices.