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World Trade Organization

and
Cambodian Commitments
An Introduction
Prepared by Chan Bonnivoit
WTO Office
Notification and Legal Compliance
Department
Outline of the Presentation
I. Introduction of WTO
A. WTO - Overview
B. WTO - History
C. WTO - The Uruguay Round
D. WTO - General Objectives
E. WTO - Main Functions and Decision Taking
F. WTO - Basic Principals
G. WTO - Structure
H. WTO - Ministerial Conferences
I. Doha Work Programs
J. WTO - Negotiation’s Rounds
II. Cambodia’s Membership of the WTO
A. History of Cambodia into WTO
B. Cambodian terms of Accession
C. Cambodian Commitments for the WTO
D. Advantages and Constraints
WTO - Overview
z Institutional framework of the multilateral
trading system
z Created by the UR negotiations (1986-1994)
on 1st January 1995
z Membership: 152 Members (16 May 2008)
and about 31 observers
z Geneva based Secretariat with 550 staff
(budget 154 mio. Swf in 2003).
z A Director General is appointed for four
years (Pascal Lamy, 1/09/05 - 31/08/09)
WTO – History (1)
A world in crisis
z 1914-1918: first world war
z no international reconstruction plan
z protectionist tendencies
z tariff increases
z introduction of restrictions

Æ Trade war
z economic crisis
z rise of nationalism
z 1939-1945: second world war
WTO – History (2)

1945: A time of reconstruction


z UN
z the two pillars of the “Bretton Woods”
system (IMF and World Bank)
z a third pillar for trade and
employment?
WTO – History (3)
1946-48: Building a roof for
trade and employment
z ITO (Preparatory Committee)
z United Nations Conference on
Trade and Employment
z London (Oct-Nov 1946)
z New-York (Jan-Feb 1947)
z Geneva (Apr-Aug 1947)
z Havana (Nov 1947-Mar 1948)
WTO – History (4)

1948: The Havana Conference


z Final session of the United
Nations Conference on Trade
and Employment
z Charter establishing the ITO
z Chapter V: General Agreement on
Tariffs and Trade (GATT)
z First round of tariff negotiations
(exchange of concessions)
WTO – History (5)

1947: Havana Conference


z Charter establishing the ITO
z Never to be ratified
z Never to enter into force
1947-48: Havana
WTO – History (6)
1948: Entry into force of the
GATT
z Common rules governing trade
z The GATT (General Agreement)
z Result of the first round of trade
negotiations
z Schedules of tariff concessions
z Protocol of Provisional Application
1948: GATT at work
WTO – History (7)

z General Agreement on Tariffs and Trade


(GATT)
z From 1948 to 1995
z Rules with a “provisional” character
z 23 Contracting parties (in 1948)
z Negotiations were organized under the
so-called “Rounds” (8 during the GATT)
WTO - The Uruguay Round

z Most ambitious round since the beginning


of GATT (Coverage and objectives)
z New fields covered (Tariffs, NTMs,
Services, Intellectual Property, Textiles,
Agriculture, Dispute Settlement, etc.)
z Creation of WTO
z Results (see next slides)
WTO - UR Results (1)

z Agriculture - Tariff:
z Tariffication of NTMs
z Then average cut (36% for DCs - 24% for Dvlping)
z Minimum cut per product (-15% / -10%)
z If tariffication, then we authorize:
z Tariff quotas

z Special emergency actions (safeguards)

z 6 years for DCs and 10 years for Dvlping


z No obligations for LDCs
WTO - UR Results (2)
z Agriculture - Non Tariff:
z Total Domestic support cut:
z -20% for DCs

z -13% for Dvlping Countries

z Export subsidies cut:


z Value of subsidies
ƒ -36% for DCs
ƒ -24% for Dvlping Countries
z Subsidized quantities
ƒ -21% for DCs
ƒ -14% for Dvlping Countries
z No obligations for LDCs
WTO - UR Results (3)

z Non agricultural products:


z General objective was a reduction of the
general level of the tariffs by 33%
z Finally the result was a cut of 40%
z Reduction to be implemented in five steps
over a four years period
WTO - General Objectives

z Raising Standards of living


z Ensuring full employment
z Ensuring large and steadily growing volume of
real income and effective demand
z Expanding the production of and trade in goods
and services, while allowing for the optimal use
of the world’s resources (sustainable
development)
z … seeking both to protect and preserve the
environment […] in a manner consistent with [the
Member’s needs]
WTO - Main Functions
z Implementation, administration and
operation of WTO Agreements
z Framework to further the objectives of the
WTO Agreements
z Forum for trade negotiations
z Framework to administer the Understanding
on Rules and Procedures Governing the
Settlement of Dispute (DSU)
z Framework to administer the Trade Policy
Review Mechanism (TPRM)
WTO - Decision taking
z Consensus
z Negative consensus (Dispute Settlement
Body)
z Voting (only in some specific cases):
z Interpretation of Agreements (3/4)
z Waiver of an obligation for a particular
Member by the Ministerial Conference (3/4)
z Amendments of provisions of agreements (all
Members or 2/3, depending on nature of
prov.)
z Admission of new member (2/3)
WTO - Basic Principles
z No Discrimination
z Most Favoured Nation (MFN)
z National Treatment
z Predictability
z Through binding
z Transparency (Notifications, TPR)
z Freer trade (suppression of obstacles to
trade through negotiations)
z Encourage development (longer deadlines,
more flexibility, specific “privileges”)
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Encourage development:
‘S&D’ Treatment in the WTO
z There are 145 ‘S&D’ provisions throughout the
WTO Agreements aimed at:

z Increasing trade opportunities of developing WTO members


z Calling on industrialised WTO members to safeguard the interests
of developing ones
z Flexibility of commitments, of action, and of use of policy
instruments
z Transitional time periods for implementing WTO Agreements
z Technical Assistance
z More favourable treatment of least-developed WTO members
WTO - Structure (1)
WTO - Structure (2)

z Ministerial Conference
z General Council
z Trade Policy Review Body
z Dispute Settlement Body
z Councils
z For Trade in Goods
z For Trade in Services
z For TRIPs
z Committees and other working groups
WTO - Structure (3)

Ministerial Conference
z Major decisional body in the WTO
z Meets at least once every two years:
z Singapore, 1996
z Geneva, 1998
z Seattle, 1999
z Doha, 2001
z Cancun, 2003
WTO - Structure (4)

General Council
z WTO’s highest-level decision-making body
in Geneva
z All member governments
z Has the authority to act on behalf of the
ministerial conference
z The General Council also meets, under
different rules, as the Dispute Settlement
Body and as the Trade Policy Review Body
Ministerial Conferences
Singapore 1996
Trade and Investment
Trade and Competition Policy
Trade Facilitation
Transparency in government procurement
Information Technoloy Products (ITA)

Geneva 1998
Electronic commerce

Seattle 1999
Doha 2001
Debt and Finance
Transfer of technology
Cancún 2003
Doha: Work Programs
Implementation (§12)
Agriculture (§13-14)
Services (§15)
Market Access for Non-Agricultural Products (§16)
TRIPS (§17-19)
Trade and Investment (§20-22)
Trade and Competition Policy (§23-25)
Transparency in Government Procurement (§26)
Trade Facilitation (§27)
WTO Rules (§28-29)
Dispute Settlement (§30)
Trade and Environment (§31-32)
Electronic Commerce (§34)
Small Economies (§35)
Trade, Debt and Finance (§36)
Trade and Transfer of Technology (§37)
Technical Cooperation and Capacity Building (§38-41)
Least-Developed Countries (§42-43)
Special and Differential Treatment (§44)
WTO - Rounds of Negotiations
Year Place/name Subject covered Countries Average tariff
reduction for
industrial goods
(per cent)

1947 Geneva Tariffs 23 19

1949 Annecy Tariffs 13 2

1951 Torquay Tariffs 38 3

1956 Geneva Tariffs 26 2

1960-1961 Geneva Tariffs 26 7


(Dillon Round)

1964-1967 Geneva Tariffs and anti-dumping measures 62 35


(Kennedy Round)

1973-1979 Geneva Tariffs, non-tariff measures, “framework” 102 34


(Tokyo Round) agreements

1986-1994 Geneva Tariffs, non-tariff measures, rules, 123 40


(Uruguay Round) services, intellectual property, dispute
settlement, textiles, agriculture, creation of
WTO, etc

2001-2005? Doha Round? Tariffs, non-tariff measures, rules, 148 ?


services agriculture, DS, trade and
environment (certain aspects), new
issues?
History of Cambodia
Accession into WTO
z Applied to join the WTO in late 1994.
z Established Cambodia’s Working Party on 21
Dec 1994.
z Submitted a Memorandum on its Foreign Trade
Regime in June 1999.
z Circulated the replied questions concerning the
Memorandum in January 2001
z Arrived the latest revisions and updates in March
2003.
History of Cambodia
Accession into WTO

z By the working party’s third on 14 Nov


2002 it marked an advancement of the
accession process because for the first
time the members focused on ideas for a
draft working party report and, thereby,
concentrated on agreeing Cambodia’s
term of entry into WTO.
History of Cambodia
Accession into WTO
z Considered firstly the report by the meeting on 16
Apr 2003.
z Approved the final revision at the last working
party meeting on 22 July 2003.
z Approved Cambodia’s membership by the WTO
Ministers on 11 Sep 2003 at the Cancún
Ministerial Conference.
z On 11 Feb 2004 the WTO members extended
Cambodia’s ratification deadline.
z Become a full member on 13 Oct 2004.
History of Cambodia
Accession into WTO

z The Countries that negotiated with


Cambodia (Working party members):
Australia, Canada, China, EU, India,
Japan, Rep. Korea, Malaysia, New
Zealand, Panama, Singapore, Chinese
Taipei, Thailand, US, Venezuela.
z Chairperson: Mr. A. Meloni (Italy)
Cambodia’s Terms of Accession

z Report from the working party that


negotiated the deal,
z Schedules or lists of commitments on
import duties for goods and
z Market access for service providers.
Cambodia Commitments for
WTO
z State ownership and privatization:
z First phase of privatization carried out from
1991 to mid-1993
z Second phase starting in April 1995.
z Ensure transparency, and keep WTO
members informed and also provide periodic
reports on other issues related to its economic
reform as relevant to its obligations under the
WTO.
Cambodia Commitments for
WTO
z Pricing policies:
z Apply price controls in a way that is consistent
with the WTO,
z Take account of the interests of exporting
WTO members,
z Published a list of goods and services subject
to state control.
Cambodia Commitments for
WTO
z Trading rights (the right to import and
export):
z Restrictions on imported pharmaceuticals and
veterinary medicines could discriminate in
favour of domestic production of similar
products,
z No later than 1 June 2005, it would amend its
legislation and ensure that are in full
conformity with its WTO obligations.
Cambodia Commitments for
WTO
z Other customs duties and charges:
z Comply with WTO provisions from the date of
accession and will be bound at zero.
z Tariff rate quotas, tariff exemptions:
z Respect WTO disciplines on tariff rate quotas.
z Implement any tariff exemptions in conformity with the
relevant WTO provisions.
z Fees and charges for services rendered:
z Conformity with the provisions of WTO for all fees and
charges collected for services related to imports and
exports.
z No introduce or reintroduce any fees and charges for
services rendered that were applied to imports ad
valorem (i.e. as a percentage of the prices).
Cambodia Commitments for
WTO
z Application of internal taxes:
z Apply its domestic taxes in strict compliance
with Article 3 of GATT
z Apply in a non-discriminatory manner to
imports regardless of country of origin.
z GATT Article 3 deals with “national treatment”
(or non-discrimination between locals and
foreigners) in taxation.
Cambodia Commitments for
WTO
z Quantitative import restrictions, including
prohibitions, quotas and licensing systems:
z Eliminate quantitative restrictions on imports of
fertilizers, pesticides and other agricultural inputs, and
z Establish a WTO-consistent method of registration and
review of imported agricultural chemicals no later than
1 June 2005.
z Regulate domestic and international trade in conformity
with TBT Agreement from 1 Jan 2007.
z No introduce, re-introduce or apply other non-tariff
measures such as licensing, quotas, prohibitions, bans
and other restrictions having equivalent effect that
could not be justified under the provisions of the WTO
Agreements.
Cambodia Commitments for
WTO
z Customs valuation:
z Implement fully the Customs Valuation Agreement from
1 Jan 2009.
z Rules of origin:
z Comply fully with the provisions of the WTO Rules of
Origin Agreement by 1 Jan 2005, parts by 1 Jan 2004.
z Other customs formalities:
z A dispute settlement mechanism within the Cambodian
Customs Service to handle complaints about customs
practices from traders and governments will be
established before 1 Jan 2005.
Cambodia Commitments for
WTO
z Preshipment inspection:
z Ensure that the operations of the preshipment inspection
companies retained by Cambodia meet the requirements of
the WTO agreements.
z To cease Cambodia’s preshipment inspection regime when
the Customs and Excise Department is able to carry out the
functions currently performed by preshipment inspection
service providers.
z Anti-dumping, countervailing duties, safeguard regimes:
z No apply any anti-dumping, countervailing or safeguard
measure until it has notified and implemented appropriate
laws and regulations conforming with the WTO agreements.
z Only apply any anti-dumping duties, countervailing duties
and safeguard measures in full conformity with the relevant
WTO provisions.
Cambodia Commitments for
WTO
z Export restrictions:
z Restricts exports of rice, round logs, unprocessed
timber, forestry products, antiques more than 100 years
old, narcotic drugs and poisons, weapons, explosives,
ammunition, and vehicles and machinery for military
purposes.
z Ensure that restrictions comply with WTO agreements.
z Export subsidies:
z Comply with the Subsidies Agreement from accession.
z Eliminate either the existing system of remission of
import fees and waiver of duty for certain goods used
by certain investors, or establish a functioning duty
drawback system in consistent with WTO provisions
through amendment of the Law on Investment, as
necessary, by the end of 2013.
Cambodia Commitments for
WTO
z Industrial policy, including subsidies:
z To be notified from the date of accession.
z Standards and certification:
z To gradually implement the TBT Agreement.
z To start full implementation TBT from 1 Jan 2007
without recourse to any further transitional period.
z Sanitary and phytosanitary measures:
z To gradually implement the SPS Agreement, with full
implementation by 1 Jan 2008.
z To consult with WTO Members upon request if they
deem that any measures applied during the transition
period affected their trade negatively.
Cambodia Commitments for
WTO
z Trade-related investment measures (TRIMs):
z No maintain any measures inconsistent with the TRIMs
Agreement
z Apply the TRIMs Agreement from the date of accession
without recourse to any transitional period.
z State trading entities:
z Apply its laws and regulations governing the trading
activities of state-owned enterprises in full conformity
with the provisions of the WTO Agreement.
Cambodia Commitments for
WTO
z Free zones, special economic areas:
z To be fully subject to the coverage of WTO agreements
and its commitments in its Protocol of Accession to the
WTO Agreement.
z To ensure enforcement of its WTO obligations in those
zones or areas.
z Goods produced in these zones or areas under tax and
tariff provisions that exempt imports and imported
inputs from tariffs and certain taxes will be subject to
normal customs formalities when entering the rest of
Cambodia, including the application of tariffs and taxes.
Cambodia Commitments for
WTO

z Transit:
z Apply any laws, regulations and practices governing transit
operations and would act in full conformity with the provisions
of the WTO agreements.
z Agricultural policies:
z Bind its agricultural export subsidies at zero,
z No maintain or apply any export subsidies for agricultural
products.
z Textiles regime:
z The growth rates of textiles and clothing import quotas
applied by other members to import from Cambodia will end
when the Agreement on Textiles and Clothing terminates (in
2005).
Cambodia Commitments for
WTO
z Trade-related aspects of intellectual property rights
(TRIPS):
z Apply the TRIPS Agreement no later than 1 January 2007,
with some protection provided in the interim.
z Transparency:
z Publish all laws and regulation according to WTO
requirements from the date of accession, and on a website
from 1 January 2004.
z Regional trade agreements:
z Cambodia’s only regional trade agreement is within ASEAN
(the ASEAN Free Trade Area).
z In this, Cambodia will gradually eliminate tariffs on essentially
all ASEAN products by 2015. Details will be notified to the
WTO.
Brief advantages and constraints
as a member of WTO
z Advantages (1)
z Reform trade regime in conformity with the
international trade regime.
z Protect garment industries from having the
quotas imposed on their exports in 2005
and beyond.
z Avoided any obligation to lower tariff.

z Retained the ability to offer the exporters a


duty-free access for imported input factors.
Brief advantages and constraints
as a member of WTO
z Advantages (2)
z Improve the investment climate by ensuring
the access to foreign markets, improving
the legal framework and enhancing the
business services infrastructures.
z Retain flexibility to develop appropriate
policies to support the agricultural sector.
z Benefit from the Doha-Round on DF & QF
market access to some developed
Countries, TRIPS and public health.
Brief advantages and constraints
as a member of WTO
z Advantages (3)
z Have the same right like the large member
Countries at the dispute settlement and all
negotiations relating to WTO trade rules.
z Benefit from the technical assistants
relating to capacity building of HR.
z Succeeded in a way that advances and
reinforces Cambodia into the world trade
system and trade-centered development
strategy.
Brief advantages and constraints
as a member of WTO
z Constraints
z Having insufficiency of HR and technology.
z Having lower capacity for structural. adjustment of
production and trade.
z Being yet weakly for Cambodian legislative and
administrative system.
z Having inadequacy production’s capacities and
resources to diversify the exports.
z Having some challenges like to fulfill the obligation
for legislative and administrative reform, regarding
to the over-lapping and time consuming
governmental procedures etc.
THANKS YOU