H.E. Taur Matan Ruak, President of East Timor,
H.E. Ahmed Said Hassani DJAFFAR, Vice President of Comoros,
H.E. Wang Shouwen, Vice Minister of Commerce of the People’s Republic of China,
Mr. David Shark, Deputy Director General of WTO,
Excellencies, Ladies, Gentlemen and all Participants!
I am greatly pleased to attend today opening ceremony of the 5th China Round Table Conference, which is auspiciously held in Siem Reap. Taking this opportunity, I would like to extend my gratitude to the government of the People’s Republic of China for providing financial support and to WTO’s Secretariat for a close collaboration with the Ministry of Commerce of Cambodia to organize this event.
As this round table conference will discuss about the negotiation of the least developing countries to become a member of WTO and the sharing experiences with one another on how to formulate development policies after becoming a WTO member as well as to formulate comparative advantage policies and strategies for the least developing countries, which would be also discussed in the 11th Minister Meeting planned to be held in 11 – 14 December 2017 in Buenos Aires, Argentina; I would like to this opportunity to share some experiences that Cambodia went through in order to integrate itself into the region and to become a WTO member.
Generally, Cambodia started rebuilding herself and developing her economy from scratch since 1979; yet it has made steady progress since then. On average, economic growth was around 7.7% per annum between 1994 and 2014; GDP per capita increased from USD 229 in 1993 to USD 1,215 in 2015. In 2016, Cambodia achieved growth at around 7.1% with GPD per capita increasing to about USD 1,300, making Cambodia change from being one of the poorest countries to a lower-middle income country.
After gaining full peace with social stability and favorable investment climate for potential growth, Cambodia became a member of ASEAN in May 1999 and WTO in October 2004. By incorporating regional and international development policies into national development policies, Cambodia is transforming its image and preparing herself to become an upper-middle income country in the future.
With regard to the sharing of experiences on regional integrating and to become a WTO member, I would like to highlight a number of important works which Cambodia prepared and implemented as follows:
- In 2010, Cambodia introduced Policy on the Promotion of Paddy Production and Export of Milled Rice, which set out three main strategies: productivity enhancement, agricultural diversification and agricultural commercialization or transforming from subsistence to commercial agriculture.
- In 2015, Cambodia also launched the Cambodia Industrial Development Policy (IDP) 2015-2025, which is new growth strategy for promoting production base to higher value-add industries, and integrating herself into regional and global production chains, particularly through attracting foreign direct investments (FDIs).
- Cambodia also prepared an analytical paper on Trade Integration Strategy in 2003 and updated it in 2014 with the objective to identify strategy for priority sector and competitiveness of Cambodia.
- For tourism sector, Cambodia has embraced Open Sky Policy, which is a strategy to liberalize the aviation sector and to attract both regional and global tourists.
- Cambodia has also implemented a policy to incorporate International Labor Standards into garment productions that has provided confidence to the buyers and import countries. This has resulted in a high export growth of apparel and textile and created direct employment for approximately 800,000 workers.
- Cambodia has organized the Government-Private Sector Forum, aiming to exchange views and perspectives between the Royal Government of Cambodia and the private sector in order to address all issues related to business and investment; as Cambodia has considered the private sector as the locomotive of national economic growth.
- Cambodia adopted the Rectangular Strategy- Phase I in 2004 and Phase II in 2008, and these two strategies have mainly focused on the promotion of agriculture, strengthening good governance, development of physical infrastructure, capacity-building and human resources development, and the development of private sector. Both phases of the strategy had been successfully implemented. Currently, Cambodia is implementing the Rectangular Strategy- Phase III for Growth, Employment, Equity and Efficiency in which the RGC has set out four priority sectors: (1) human resources development to ensure competitiveness of the labor market, (2) continued investment in transport infrastructure and trade facilitation improvement, (3) continued development in creating higher value-added to agriculture sector and (4) enhancement of good governance and capacity of the public institutions, aiming to improve the efficiency of the public services and investment climate.
As a member of ASEAN, Cambodia had made significant contribution to the realization of ASEAN Economic Community that took place at the end of 2015, and have actively involved in the liberalization of trade with the ASEAN 6 partners including China, Japan, Korea, India, Australia and New Zealand. At the same time, Cambodia has been playing an active role in promoting the establishment of a huge free trade area comprising of 16 countries, the so called Regional Comprehensive Economic Partnership (RCEP) which will be signed in 2017 with the aim to expand goods and services market, attract foreign investment as well as enhance competitiveness and increase value- added in the regional production chains.
Overall, Cambodia has become a member of World Trade Organization (WTO) through successful negotiation on the bilateral and multilateral basis for 5 years with other highly developed countries. In this negotiation, Cambodia was required to liberalize many sectors, particularly trade in goods, services, and investment as well as implement other reforms on institutional structures, regulations and other legal documents. This success is also due to the political will of the Royal Government of Cambodia as well as active participation from all ministries-institutions, people as well as the private sectors in Cambodia.
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Cambodia’s Accession to WTO Was Acting Together as One Unified Mechanism
Please allow me to take this occasion to share with you more experiences on methodology and preparation of mechanism to gain accession to the World Trade Organization (WTO). HE Cham Prasidth, then Minister of Trade, currently Minister of Industry and Handicrafts, was our chief negotiator. We organized a team like shadow government, which consisted not only a minister of trade. We need to act on that front altogether as a unified mechanism. Everything to do with it would have to go through the Cabinet’s meeting. There were many questions that concerned countries asked Cambodia. Over one hundreds questions answered, about half of them came back. In the same state, some countries answered 200 questions and 400 hundreds more asked. That was how we experienced.
Cambodia was successful to respond not just in letters or words. What I considered was a big success was that we achieved consistency between external (trade) policies and those implemented internally. Some countries then questioned Cambodia whether and/or how far had it implemented privatization of education. In fact, some of those countries did not even implement privatization of education sector as we did in Cambodia yet. To respect the rule to gain access to WTO, we had to provide them answers.
Taking Advantage of WTO Accession Preparation, Promoting Internal Reforms
Strategically, I may say, we have taken advantage of working to gain access to WTO to promote internal reforms. That may be our special point. I had put out in the first Cabinet meeting on 2 December 1998, after the second term general elections, the triangular strategy, in which its first angle was to achieve internal pacification. I may remind you that Cambodia rebuilt from nil. In Siem Reap, we had only a few old hotels. Now we have hundreds of them with capacity to accommodate millions per year. We started from receiving no tourist to now having 4.5 millions arrivals. It was because the country was in divisive war that we had made it its first strategy to achieve internal peace.
The second angle of the strategy was to integrate Cambodia as quickly as possible into world and regional communities, whereas ASEAN we became member in 1999, the Asia-Europe, WTO, etc. They were our main priorities. Its third angle was taking advantages of both favorable factors – internal and international, Cambodia should make efforts in developing its socio-economic development and poverty alleviation. It was necessary to have methodology in making use of internal readiness to integrate Cambodia into world and regional communities. Cambodia had been using its presence in the international community to promote internal reform.
We have made it clearly our internal understanding that without reforms, we would not be able to become a member of WTO. It is therefore important that I conclude our achievement on this (accession) thanks to participations and efforts from all stakeholders involved. We not only answered their questions and left them unattended. Ten years after becoming a member of WTO, We took stock and review our positions whether we had been going forwards or backtracking. We do not consider it done just to have gained accession to WTO. We make it our goal to gain the most interest from its accession.
Outward Looking Strategy to Keep Existing and Gaining New Markets
I am calling on the Deputy Director General of WTO and other members of WTO to reserve understanding for the least developed countries who are working to gain accessions to WTO. According to Cambodia’s experiences, it was a fact that some counties found it hard to trust in Cambodia’s true capacity. We have proven that since when we became a member. Progress made in the country is closely relating to integration. It was not different to what then Vice Minister of Trade of the People’s Republic of China had said – Cambodia and China’s trade volume has grown compared to when Cambodia was not yet a member of WTO. We are now pursuing an outward policy to keep existing markets and seek new ones […]
Least Developed Countries Persistently Respect Rules
As far as implementing the rules, I would say the least developed countries who are working to gain accession to WTO would persistently respect its rules than developed ones. For instance, some countries are providing subsidies to their agricultural sectors. Rich countries are serious in their capital support resulting in developing countries are not able to import their produces to markets of the rich countries. While at the same time, the rich countries themselves abuse rules of WTO. I seek the Deputy Director General of WTO to find a way to fix all this. The rich countries produce exclusive products and demand this and that, and they got them. I think the rich countries have stronger role in facilitating trade than the developing countries […]
A World of Openness, Mutual Dependence and Without Discrimination
Countries in the world will go along and we would not be able to have a world that is divisive, where poor countries left in poverty and suffered protectionism from the rich countries. I would not believe that protectionist policy would be successful. About two hours before President elect Donald Trump swore in, at the World Economic Forum in Davos, I reasoned that Trump’s protectionism would not be successful. How could they for instance force US cars makers to return to the US, and prevent cars from Japan, Germany, Britain, Sweden, and others from coming in to the US, when their people do not appreciate using the US made cars? When they choose to force them on their people, what would that be? It is a coercive economy or market. Maybe there is only one country in this world, and I do not have to mention by name, that forces people to use their own products.
I think that a world of openness and mutual dependence is what we need. There was a professor (talking at the World Economic Forum’s event) that predicted that the US and China would collide, and their fighting each other would place ASEAN in danger. There was comment too that while elephants are in the fight, ants would be the ones to die. I then reminded the professor that was not what he should teach to his students. I do not believe that the US and China would go into war. They have coordinating mechanism and complement each other. Though the US would be willing to go to war, China would not go along.
China will still be a big trade partner of ASEAN. In the last not even 100 days, trade relations between the US and China continues to be in good health as new signings by the US and Chinese investors indicate. It is true that Donald Trump did say something in the electoral campaigns but trade is where goods are going to one another. The two countries exchange 15,000 tourist arrivals to each other on a daily basis. I do not see how they can go to war.
ASEAN Holds Coordinating Role, TPP’s Divisive Nature Ends
On another matter, I told the meeting that ASEAN and members of ASEAN should not avail itself or themselves as grass under the elephants’ feet. ASEAN plays coordinating role in every ASEAN plus meetings – with both China and the US. Why should ASEAN leave the two – the US and China to go to war, and bring about danger to ASEAN? ASEAN must play coordinating role […] I may say that I wanted TPP to end. Why it was my wish? (I must say because I see that) it has a divisive nature. There ten countries in ASEAN, why only four selected to join TPP? President Donald Trump has signed an executive order to withdraw the US from TPP. I may seek countries members of TPP understand what I am saying. Selected four only out of ten countries members of ASEAN was in fact a divisive move. However, I am satisfied with and appreciate contributions of countries for ASEM to achieve regional comprehensive economic partnerships. It was not because of the fact that the pact signed in Phnom Penh under my rotating chairperson of ASEAN Summit that I brought it up, but because it is a major part of economic, trade and investment relations.
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With regard to economic liberalization under the global framework, Cambodia has strongly encouraged member countries of WTO to grant preferential tariffs and quota-free, facilitate on the rule of origin, grant preferential in service sector as well as provide development assistance to the least-developed countries. At the same time, the immediate work of the least developed countries is to undertake successful negotiation in the 11th WTO Ministerial Conference which will be held from 11 to 14 of December 2017 in Buenos Aires, City of Argentina. The outcome of the negotiation would serve the interests to all least-developed countries as well as the countries which are in the negotiation process to become members of WTO. In order to contribute to this work, even Cambodia have been occupied with the implementation of many reform programs and the development of her country as well as many regional negotiations, on 20 February 2017, Cambodia is willing to take the position as the Chair to facilitate the least-developed country group. In this position, Cambodia will her utmost effort in facilitating with least-developed and developing countries which are the members of WTO in order to conclude all negotiations in the interest of those least-developed countries.
Taking this opportunity, I would like to appeal to all least-developed countries to actively engage in addressing all remaining issues concerning to the protection of domestic agriculture and subsidy in fishery sector, as well as to stockpile food reserves to ensure its security, trading and environment sectors prior to the 11th Ministerial Conference in Argentina.
I strongly hope that our joint solidarity and will of least-developed countries would greatly contribute to the success of 11th Ministerial Conference which will be held in Buenos Aires, City of Argentina in the near future.
Finally, I would like to wish all participants of 5th China Round Table Conference pleasant stay and fruitful outcomes from the discussion during these 3 days in Siem Reap, City of the Kingdom of Cambodia.
I would like to announce henceforth the opening of the 5th China Round-Table Conference under the WTO framework. Thank you!
