PREPARING FOR WTO ACCESSIONS:

INSIGHTS FROM DEVELOPING COUNTRIES

Country studies commissioned by

Simon J. Evenett

Draft prepared on 22 January 2005

Prepared for an IDRC-sponsored research project titled Evaluating and Preparing For WTO

Accessions. Project Leader: Simon J. Evenett, World Trade Institute, Bern, and the University

of Oxford. Comments on this draft document are welcome.

TABLE OF CONTENTS

ed studies 1

Camb

k Siphana

6

ary 6

Ethiopia

Mamo Esmelealem Mihretu

121

mary 122

172

Executive Summary 172

Horloo Oyuntsetseg

227

Nepa

Kanhaiya B. Mathema

239

Vietnam 279

Executive Summary 279

Please note that all authors are writing in their personal capacities.

Each country study is in draft form.

Terms of reference for commission

odia

H.E. So

Executive Summ

Executive Sum

Jordan

Riad al Khouri

Mongolia

l

Dang Nhu Van, Phan Chi Thanh, Le Kim Sa

1

PREPARING FOR A WTO ACCESSION NEGOTIATION

Terms of reference for the country studies to be commissioned

University of Oxford, simon.evenett@sbs.ox.ac.uk

hat has either

otiations to join the WTO or

Simon J. Evenett

This terms of reference refers to a study of a single nation or customs territory t

completed its neg is in the process of negotiating to join the

analyse the

f

ion—and the

2 ent to organise and prepare for its participation in WTO

3 e actors (such as companies, civil societies, and scholars) were

4 ers and when

5 government to prepare for the implementation of commitments

made during the WTO accession negotiations. (This may not yet be relevant for those

lateral donors

country. Moreover, it is perfectly

e than others.

T necessary to

address the above matters and, equally importantly, to draw broader lessons for other

WTO. For the nation/customs territory in question, the goal the paper is to

ollowing six matters:

1. The priorities that the nation identified as important for its WTO access

process by which those priorities were identified.

. The steps taken by the governm

accession negotiations.

. The ways in which non-stat

involved in the WTO accession process.

. The principal challenges faced when negotiating with existing WTO memb

dealing with the WTO secretariat.

. The steps taken by the

nations that are still negotiating their accessions to the WTO.)

6. The type, extent, and usefulness of any technical assistance received from bi

or international organisations.

Not all of the above six matters may be relevant to a given

acceptable for an author to present more material on some of the matters abov

here is no prescribed length for the paper. The paper should be as long as

developing countries concerning:

1. How best to form national priorities for the WTO accession effort.

2. How best to develop and organise the necessary governmental expertise, intra-

governmental departmental skills, offices, and procedures, and inter-department

2

and coordination, to participate in (and complete) WTO

3 of people outside of government (including

4 ssistance programmes to effectively assist developing

countries in their WTO accession efforts.

he purpose of

eparation and

ou do not have to answer all of these questions

procedures for consultation

accession negotiations.

. How best to involve, if at all, the expertise

business, scholars, civil society, foreign consultants.)

. How best to organise technical a

Suggested questions to address in the paper.

Please find below a list of specific questions that your paper might address. T

these questions is to make you think about many of the issues involved in pr

negotiation for WTO accession. Y . Moreover,

nothing stops you from addressing other issues that you think are relevant to the preparation

for and negotiation of a WTO accession.

. [Decision to join] Who made the decision to apply for WTO membership a

that decision made?

. [Rationale] What did the country hope to achieve by becoming a member of

what ways, if at all, was the d

1 nd when was

2 the WTO? In

ecision to join the WTO seen as an important part of the

lar benefits of

3 played a role

ere advanced

4 to apply for

ent

ions? What is

inistries and

esources does this office have available to it (noting that the level of

resources may change over time)? Did this government office have the consistent support

of senior political leaders?

5. [Trade policy expertise] After the decision to apply for WTO membership, did the country

take active measures to expand its trade policy expertise? If so, how? By how much? And

over what time frame?

country’s development/growth/poverty reduction strategy? Were any particu

joining the WTO identified as being of special importance for your country (such as

increasing foreign direct investment)?

. [Participation of non-state actors in decision] Which, if any, non-state actors

in debates over whether to apply for WTO membership? What arguments w

by those non-state actors?

. [Organisation of negotiating effort within government] After the decision

WTO membership was made, which government office or officials within the governm

was given primarily responsibility for planning and executing WTO negotiat

the relationship between this government office and other government m

agencies? What r

3

6. ent of

n on imports,

entation costs

ta was used?

studies made available to the public? (If so, please include them as an appendix

7.

tutions on the

.

8 of the studies (mentioned in question 7.

en during the

9. n-state

ion? These non-state actors could include

l institutions,

ation process

(identified in

1 trategy] Did the government consult with non-state

actors could

l institutions,

ation process

ally or on an ad hoc basis?

1 id any of the

reparation for

n negotiations? If so, why? If not, why

not?

13. [Problem identification] What important problems did the planning and consultation

process identify with respect to (i) planning WTO negotiations, (ii) conducting WTO

negotiations, and (iii) implementing WTO accession obligations (once negotiations were

completed)? In each case, describe what the problems were.

[Internal government studies] What studies, if any, were conducted by the governm

the effects of WTO accession? Were analyses of the effects of WTO accessio

exports, FDI, employment, demands for social protection, and future implem

undertaken? If so, what analytical approaches were taken? And what da

Where the

to this study.)

[Studies by non-state actors] What studies, if any, were conducted by university scholars

by or on behalf of bilateral aid agencies and the international financial insti

effects of WTO accession? Please include a list of these studies in your paper

. [Impact of studies by non-state actors] Did any

(above)) inform the government’s preparation for, goals for, or tactics tak

WTO accession negotiations? If so, why? If not, why not?

[Consultations over effects of WTO accession] Did the government consult with no

actors over the effects of WTO access

academics, trade unions, NGOs, business people, the international financia

and other friendly nations that have joined the WTO. Was the consult

organised formally or on an ad hoc basis?

10. [Impact of consultations with non-state actors] Did any of the consultations

question 9. (above)) inform the government’s preparation for and the objectives of the

WTO accession negotiations? If so, why? If not, why not?

1. [Consultations over negotiating s

actors over the negotiating strategy for WTO accession? These non-state

include private law firms—at home and abroad—the international financia

and other friendly nations that have joined the WTO. Was the consult

organised form

2. [Impact of consultations over negotiating strategy with non-state actors] D

consultations (identified in question 11 (above)) inform the government’s p

and tactics undertaken during the WTO accessio

4

14. (above),

dressed. If so, which government agency

1 question 13

If so, please provide

16. e problems

structure and

nefits of WTO accession? If so,

ents become

terwards?

TO members

1 current WTO

rs? How long did it take to assemble and write those documents? What resources

lp in drafting

ents? If so, who provided that help? Were you satisfied with the help that you

19. TO

2 ow quickly did the applicant government respond to the issues

the nature of

clude accommodation of requests or counterproposals?

ore they were

ow were any

come?

23. [Assistance from the WTO secretariat]. What assistance did you receive from the WTO

secretariat? Was all of the assistance from the WTO secretariat provided informally? If

not, please describe the formal assistance received.

24. [Geneva-based negotiating resources] How many resources (person-years and skills)

were used to conduct these negotiations?

[Problem resolution] For each of the important problems identified in question 13

please report whether the problem was ad

addressed the problem and what measures were taken?

5. [Further expertise] As a result of addressing the problems identified in

(above), did the government realise that it needed more expertise?

details and describe where the expertise was trained and who funded that training?

[Investments to bolster benefits of WTO accession] As a result of addressing th

identified in question 13 (above), did the government identify any infra

administrative investments that could enhance the be

where these investments made? If not, why not? When will those investm

operational—in time for WTO accession, before it, or af

17. [Actual negotiations] Describe the process of negotiations with the current W

in Geneva. What challenges were faced during those negotiations?

8. [Documentation] What documents did the government have to supply to

membe

were required to assemble those documents? Did your country receive any he

those docum

received?

[Issues raised by current WTO members] What important issues did the existing W

members raise?

0. [Response by applicant] H

raised by WTO members (and identified in question 19 (above))? What was

the response? Did any response in

21. [Length of negotiations] If applicable, how long did the negotiations take bef

successfully brought to an end?

22. [Facilitating closure] What factors brought the negotiations to an end? H

deadlocks in the negotiations over

5

er factors that they feel was pertinent to the

organisation of the country’s WTO accession negotiations.

The authors of these papers would be encouraged to go beyond these (rather detailed and

probably laborious!) questions and to include oth

6

PREPARING FOR A WTO ACCESSION NEGOTIATION

Cambodia Country Case Study

Secretary of State for Commerce, Cambodia

epal, was the TO since its constitutes a g, hectic and the accession do in order to

imply that a tween it and

ss, certain practices have evolved over time that provided reasonable guidance as regards to what an acceding country will have to do. Based on its recent

hare a few e process for

cession: It is e public and ot an aim by

e achieved at any cost. Cambodia has carefully considered efficient use

the long-term ould have to

development

h the various consultations

bodia could gotiations. A sion process,

e and during the negotiation stage, would generate the ent

e WTO, its

executive and legislative branches of government and effective public/private sector partnerships were also essential for a smooth accession process. As reflected in section 3 of this report, Cambodia has probably developed one of the most daring and pioneering approaches to policy dialogue consultations.

Stakeholder consultations, while necessary, should not take place in a vacuum. Acceding countries should frame their national priorities for WTO accession within the larger context of

Prepared by Sok Siphana, J.D.

Executive Summary:

Cambodia became a member of WTO on 13 October 2004 and, along with Nfirst and only 2 LDCs to have succeeded in their accessions to the Wtransformation from the GATT in 1995. Cambodia’s accession into the WTOmajor challenge for the country. The accession process is a complicated, londemanding exercise. There is really no miracle prescription that would render process easy. Moreover there is no official description of what a country has to join WTO. Article XII of the Marrakesh Agreement establishing the WTO states scountry that is not a member may become a member “on terms to be agreed bethe WTO. Nonethele

experiences with WTO accession process, Cambodia proposes to srecommendations that would set a minimum base and at least could facilitate thother acceding countries.

Recommendations on best practices to form national priorities for the WTO acnecessary for the acceding country to have a clear understanding, both in thprivate sector and by the civil sector at large, that accession to the WTO is nitself, and membership should not bthat the real terms of integration of Cambodia into the world economy, includingof advantages of membership in the WTO, will be determined, first of all, by development perspectives of the Cambodian economy as a whole. As such it wbe careful not to make concessions that would severely undermine its economicand unduly compromise strategic sectors.

To arrive at that, there has to be a clear commitment for policy dialogue witstakeholders. Forging effective partnerships with the private sector and frequent with all economic actors – including civil society groups - would ensure that Camformulate comprehensive and consolidated positions and arguments during its nenational consensus among, and engagement of, all concerned parties in the accesparticularly the private sector, befornecessary support and avoid internal problems at a later stage. The Cambodian Governmhas for that matter launched active public awareness campaigns about thagreements, the accession and implications of membership. Effective cooperation among the

7

arious policy cio-Economic y Framework but probably tudy (DTIS).

undertake and complete a diagnostic trade

governmental, and inter-nd complete) plicated and

cover a wide range of sectoral and cross-sectoral issues, it is necessary for acceding countries mentation of

r committee and agencies. otiators with e course of to act as the

ptember 1997 tee was made

fficials from every ministries and agencies complex, the g of over 110 irmanship of

l Council for aration of the s was highly liberalization

t importance iation process

bly impose pressure on the Government to mobilize additional specialized staff and consultants to assist it in coping with increasing workload. The core team, with its

g within the as follow up e to focus on

aking. In retrospect the strength of the core team lied more in its ability to act as catalyst and coordinator for the larger WTO negotiating team and task force.

At the task force level, Cambodia’s best practices were practically based on two basic principles of regular engagement and pro-activeness. During the WTO process the negotiating team were able to defer some sensitive issues to the task force for decision thus lessening the potential conflicts with other government agencies.

their national economic development strategies. In the case of Cambodia, vdocuments were referred to as guiding posts, i.e., the Five Year Plan (SoDevelopment Plan (SEDP I (1996-2000) and SEDP II (2001-2005), the PolicPaper (PFP), the Interim PRSP, the Pro-Poor Trade Sector Strategy, and lastly, the most useful one, the Integrated Framework diagnostic trade integration sCambodia was one of the first countries tointegration study in 2002.

Recommendations on best practices to develop and organise the necessary expertise, intra-governmental departmental skills, offices, and proceduresministerial procedures for consultation and coordination, to participate in (aWTO accession negotiations: Since WTO issues and agreements are rather com

to establish an institutional framework responsible for the coordinated implepolicies related to WTO commitments and WTO Agreements.

The proper institutional framework should ideally consist of one single body oconsisting of senior officials of all concerned government bodies, ministries Such a mechanism should be based on a core team of professional negcompetence on wide ranging issues, which will undoubtedly arise in thnegotiations. Initially the Government has appointed the Ministry of Commercefocal point for activities related to WTO accession. It has established also in Sean Inter-Ministerial Coordinating Committee on WTO Accession. This Commitup of 15 members at the policy level and three oinvolved in WTO activities at the working level. As the process became morePrime Minister has deemed necessary to establish a large task force comprisinsenior government officials – both political and technical level - under the chathe Minister of Commerce.

On the larger scale, Cambodia has another mechanism called the inter-ministeriaSocial Development (CSD). The work of the CSD is central in steering the prepNational Poverty Reduction Strategy (NPRS). For its part, the NPRS procesparticipatory and addressed a large number of sectoral issues, including trade and integration.

At the operational support level, the issue of building of a core team is of greaprior to engaging the WTO accession process. The resource demanding negotwill inevita

specialized capacity, can serve as a strong backbone for institutional buildinnegotiating team and can act very efficiently both as local support during, andfor, the accession process. Moreover it could free up the policy makers’ timsubstantive policy discourse and policy m

8

ple outside of support from and foreign e, at no cost

um use of the government’s limited resources and allow different partners to benefit from each other’s

investment, mbodia has a able to hold ime Minister, dress sector-

on an ongoing basis, namely: (i) Agriculture and Agro-Industry; (ii) Tourism; (iii) Manufacturing and Distribution; (iv) Legislation, Taxation, and Governance;

re; and (vii)

provement of cess was less m sector, the as no strong

interacting effectively with the Government

Cambodia’s objectives of

rty reduction ematically on ed in 2002 its C offered its onal research mpaign with international

conferences, seminars and special condensed lectures within the national academic circles. rgies thus far oC. By now e many civil

Cambodia the repreneurship

development at the grass root level are quite remarkable.

Another source of expertise can be found with consultancies, whether domestic or foreign. Many of them are working, or previously worked, in a number of projects related to trade development. Access to their expertise or at least their consultancy outputs could provide to the negotiating team additional insights on numerous critical issues. Another complementary approach is to draw on the combined strengths of both national and international consultants.

Recommendations on best practices to involve, if at all, the expertise of peogovernment: The process of accession represents a great opportunity to mobilize resources outside the government, i.e. business, scholars, civil society,consultants. Countries should make active use of these expertise, most of the timto the government. Such partnerships and collaboration would help to ensure optim

expertise, resources and networks.

Private sector operators can provide reliable feedback on the issues facingproduction and trade environment, both at the national and global level. Caformalized procedure through which the Government and private sector are dialogue. At the peak is the Government–Private Sector Forum chaired by the PrSeven business-government sectoral working groups have been formed to adspecific problems

(v) Services including Banking and Finance; (vi) Energy and InfrastructuProcessing for Export.

While these working groups have produced significant effects on the overall imthe climate for private sector development their effect on the WTO accession prothan desirable. With the exception of the financial and banking sector, the tourisrice sub-sector, and the legal and accounting professional services sector, there wprivate sector organizational structure capable ofor to translate their sector-specific business interests into Cambodian policy stances to be defended in regional and international trade negotiations. As such, enhancingprivate sector participation in trade policymaking has been one of the main Cambodia initial trade mainstreaming efforts.

Civil society groups, for their part, have played mostly an important role in poveinitiatives. Until the advent of Cambodia’s WTO negotiation, trade was not systtheir agenda. In fact Oxfam was the initiator of the trade issue when it introducpublication. “Rigged Rules and Double Standards: Make Trade Fair.” The Mosponsorship to launch the publication and engage the discourse with other natiinstitutes and local civil society groups. Since then, an extensive awareness caother civil society stakeholders was initiated, including the holding of

These initial efforts are impressive and provide a basis for deepening the synedeveloped among trade sector stakeholders under the leadership of the MCambodia has consciously extended this open and collaborative dialogue to thsociety organizations with shared objectives. For a least developed country like contributions of civil society organizations in skills building and ent

9

ants, some of is deficiency

sated with extensive exchanges with the Cambodian local

grammes to nsure proper he efforts and verything in a ssion process

assistance can help build trade capacity . Thus they

heme country Cs (“IF”) to

nowledge and ploit the improved market access for its exports.

a fast-track d in line with

y ownership. programmes

assistance and capacity building, to name the main ones: multilateral organisations (WTO, World Bank,

d specialized onvince each cally owned

d ownership.

party meeting, Cambodia was fortunate to have at its disposal the technical assistance provided by the United Nations Conference on Trade and Development (UNCTAD). UNCTAD experts have long experience in WTO accessions, and were able to brief the Cambodian negotiators on the way the negotiations were usually conducted, thus helping them better understand what to expect. They also were able to help put the accession process in a development perspective. They continued to assist the Cambodian team until the end of the negotiations.

* * * * *

Many missions have been comprised of highly qualified international consultwhom regrettably may not have had adequate knowledge of the local realities. Thcould nonetheless be compenconsultants and official counterparts.

Recommendations on best practices to organise technical assistance proeffectively assist developing countries in their WTO accession efforts: Ecompliance with the global trade rules is a mind-boggling task and despite all tpolitical will so far displayed Cambodia as an LDC just could not afford to do eshort timeframe. Some WTO members were of the view that Cambodia’s accewas an opportunity to identify areas where technicaland incorporate trade as part of Cambodia’s economic development programwould welcome Cambodia’s submission of a proposal for TA.

In that respect, Cambodia has benefited immensely from its status as a Pilot Scunder the Integrated Framework for Trade Related Technical Assistance for LDsecure some of the necessary trade-related capacity building both to improve kimplementation of trade rules, and to better exDeveloped nations have extended their Technical Assistance to Cambodia onbasis in some specific areas where immediate compliance to WTO rules is needetheir pledges made in numerous political statements.

The key to a successful co-ordination of donor assistance lies in the countrOwnership means making efforts and determination to better understand donor’sand activities who are extensively involved in providing trade-related technical

UNDP, UNCTAD, ESCAP, and ITC), regional development banks (ADB), anorganisations (WCO, WIPO, UNIDO, and ISO). The challenges next are to cone of them to support and operate within the framework of the country lostrategy in ways that respect and encourage strong commitment, participation, an

Throughout the preparatory stage and prior to each working

10

PREPARING FOR A WTO ACCESSION NEGOTIATION

Cambodia Country Case Study T 1]

ss to join the r developing ssion effort;

ertise, intra-l procedures

rticipate in (and complete) WTO accession negotiations; (iii) How best to involve, if at all, the expertise of people outside of government;

ctively assist

into six sections. The first section briefly describes the priorities that Cambodia has identified as important for its WTO accession—and the process by which those

and presents development

o through to government to organise and

prepare for its participation in WTO accession negotiations.

TO accession tation among

Section 4 highlights key challenges faced by Cambodia when negotiating with existing WTO nt difficulties

rly to problems related to al trade rules multilateral

Section 5 describes the various steps taken by the Cambodian government to prepare for the implementation of commitments made during the WTO accession negotiations.

The last section attempts to review and summarize the type, extent, and usefulness of technical assistance received from bilateral donors or international organisations. Focused on trade-related capacity building (TRCB)1 which Cambodia obtained, the paper stresses the

[DRAFPrepared by

Sok Siphana, J.D. Secretary of State for Commerce, Cambodia

The objective of this study is to provide a broad overview of Cambodia’s proceWTO. More specifically the study aims to draw broader lessons for othecountries concerning: (i) How best to form national priorities for the WTO acce(ii) How best to develop and organise the necessary governmental expgovernmental departmental skills, offices, and procedures, and inter-ministeriafor consultation and coordination, to pa

and (iv) How best to organise technical assistance programmes to effedeveloping countries in their WTO accession efforts.

This volume is divided

priorities were identified. The paper addresses directly the policy coherence issuea detailed and coherent picture of the various supporting and complementarypolicies of the government.

Section 2 of this volume describes the process a non-member country must gbecome a member of WTO and the steps taken by the Cambodian

Section 3 describes the ways in which non-state actors were involved in the Wprocess. The paper gives major attention to partnership mechanisms for consulkey stakeholders, the private sector, civil society organizations and scholars.

members and when dealing with the WTO secretariat. The paper looks at inhereassociated with the accession process and focuses attention particulathe weak capacity of the Government in the understanding of the complex globon the one hand and the challenges facing Cambodia in their bilateral andnegotiations, on the other.

1 Trade Related Capacity Building refers to a coherent set of activities by donors (bilateral and multilateral) and partner countries designed to enhance the ability of policy-makers, enterprises and civil society actors in-country to improve trade performance through policy and institutional strengthening as part of a comprehensive approach to achieve a country’s overall development goals and poverty reduction strategies (DFID 2001, OECD 2001).

11

mpliance ed to enable al trade rules

tter address the supply side constraints and to exploit the improved market

mary of the various initiatives already undertaken, being implemented, or proposed by Cambodia with assistance from the 6 Integrated

core agencies and bilateral donors.

World Trade ber 1994. At its meeting on 21 December 1994, the Preparatory

Committee for the WTO established a Working Party to examine the application of the e Marrakech

e (MFTR) to er countries4

nd submitted vening of the eloni (Italy).

meetings with itted itself to 14 February

review of the

to review the cond version P opened the July 2003.

Cambodia submitted, on 22 July 2003, its acceptance of the terms and conditions of membership set out in the Accession Protocol which was approved by the Ministerial Conference on 11 September 2003 and signed by Cambodia subject to ratification. Ratification of this Protocol was made by the National Assembly and the Senate on September 2004 following the formation of the new Royal Government of Cambodia.5

need to have an effective delivery of TRCB both in the so-called "Trade rules cocapacity" and the "Trade competitiveness capacity". The former is needCambodia to improve knowledge and implementation of multilateral and regionand the latter to beaccess for its exports.

The paper concludes with an extensive sum

Framework (IF)2

INTRODUCTION

The Government of the Kingdom of Cambodia applied for accession to the Organization (WTO) in Octo 3

Government of Cambodia to accede to the WTO under Article XII of thAgreement establishing the WTO.

Cambodia submitted on 21 May 1999 its Memorandum on Foreign Trade Regimthe Accessions Division of the WTO based on which 4 main trading partnsubmitted a set of 179 questions. Cambodia completed answering the questions athem to the WTO Secretariat on 8 November 2000 opening the way for the conFirst Working Party (WP) under the Chairmanship of Ambassador Mr. Andrea MThe meeting took place on 22 May 2001 followed by a first round of bilateral some interested members. Motivated by these early successes Cambodia comman aggressive accession agenda with the second and third WP meetings held inand 14 November 2002 respectively. At the third WP the focus was on theFactual Summary. Cambodia returned to Geneva for the fourth WP in 16 April 2003 to review the accession report. An informal WP meeting was held on 26 June 2003 state of play of bilateral negotiations and focus on substantive discussions on a seof the Working Party Draft Accession Report. The conclusion of the informal Wway for the WP Chairman to set the timetable for the Final Working Party for 22

2 See also Capra-TFOC Consortium Report (August 2003) "Evaluation of the Revamped Integrated Framework for TRTA to the Least Developed Countries". Report presented to the Integrated Framework Steering Committee.

3 Letter of the Minister of Commerce No. 088/MC of 19 October 1994. 4 The four Members are Australia, EU, Japan, and USA. 5 Cambodia failed to ratify its WTO membership by deadline March 31, 2004 due to a one year long

protracted political negotiation which prevented the formation of the new government after the General Elections on July 2003. A formal extension request was send to WTO secretariat and new ratification deadline is extended to September 30, 2004. See also WTO News: 2004, Cambodia Membership Application, General Council, WTO members extend Cambodia’s ratification deadline, 11 February 2004. Available also on <http://www.wto.org.>

12

otified WTO the first and

have succeeded in their accessions to the WTO since its transformation from the GATT in 1995.6

PPROACH TO THE ACCESSION NEGOTIATIONS

m the outset,

growth and development. In order to maximize these benefits (and minimize any potential odia’s needs,

d outcomes.

ted with the

latively small , Cambodia’s e job market years ahead.

thus a major challenge facing Cambodia. of new jobs

key role in

ustrates the role that exports can play in incr i industry now

bs have been f jobs growth

and their

present situation is that the necessary increase in exports and employment can occur only if chnology are le to play in

bringing about the necessary expansion. Foreign direct investment has an especially critical role to play in expanding exports, since foreign firms know best foreign markets, and possess the technology, managerial experience and marketing channels that are needed to engage successfully in exporting.

Again, Cambodia’s experience with its garment industry provides a concrete illustration of the way in which foreign direct investment can be used to expand exports rapidly. Garment

Cambodia became a member of WTO on 13 October 2004 thirty days after it nthat its Parliament has ratified the protocol. Cambodia, along with Nepal, wasonly 2 LDCs t o

SECTION I: CAMBODIA’S A

A. Fundamental Considerations

Cambodia's accession to the WTO was a defining moment for the country. FroCambodia recognized that joining WTO could play an important role in accelerating its

disadvantages) it was necessary to devise a negotiation strategy that fit Camband that would lead to the kind of desire

1. Domestic realities: In formulating such a strategy, Cambodia starfundamental realities of present day Cambodia.

- A fast growing population: Cambodia is a small country with a repopulation, a large proportion of which is impoverished. At the same timepopulation has been growing rapidly. The number of young people entering thhas thus been growing, and will continue to grow at a rapid pace in the Expanding rapidly employment opportunities is Given the lack of purchasing power in the domestic economy, a rapid creationcan only result from producing for other, larger markets. In other words, Cambodia’s futuregrowth and development must be outward oriented, with exports playing acreating employment and reducing poverty.

Cambodia’s experience with its garment industry illeas ng employment rapidly and helping to alleviate poverty. The garment

employs directly some 260,000 people. Moreover, more than half of these jocreated during the past 5 years, making the industry by far the largest source oduring that period. The workers concerned are generally from low-income families,earnings usually flow back to these families in the countryside.

- The need to increase export and employment: A second reality of Cambodia’s

there is a rapid expansion of investment. Because adequate savings, skills and tenot always available within Cambodia, foreign investment has an important ro

6 See WTO News: 2004, Accessions: Cambodia raises WTO membership to 148, 13 October 2004. Available also on <http://www.wto.org.>

13

1.3 billion in quirements in

y any neglect development. ccount for a

t part of Cambodian employment (though still a small part of the growth of employm

al reality of nding directly or potentially s to be done,

petitiveness. nfrastructure,ssing of food dards. Here,

d foreign direct investment all have an important role to play. The development of Cambodia’s agriculture will be a long and

es reasonable t Cambodian

nd poverty in phasized the rdinated and

social sector governance.

remains a central challenge in Cambodia. In addressing its financing requirement toward achi i tal areas: (1)

and financial an engine of

growth; (5) capacity development; (6) debt management; and (7) addressing systemic and cross-cutting issues such as good governance and gender considerations.8

- Rebuilding a new image: But more importantly for Cambodia, accession to the WTO is seen as an additional step towards breaking away from its image as a poor, war-stricken country, isolated from the international community. According to one Cambodian

exports rose from $26 million in 1995 to $650 million in 1999 and more than $2003. The knowledge by foreign investing firms of marketing and other reforeign markets has obviously been a key element in allowing this rapid expansion of exports.

This emphasis on exports and foreign direct investment must not, however, implof the important role of small and medium sized enterprises in Cambodia’s These enterprises produce almost exclusively for the domestic market. They avery importan

ent) and are an important breeding ground for the development of indigenous entrepreneurship.

- Developing a rural society and economy: The third fundamentCambodia is that it is a rural society and economy, with most Cambodians depeor indirectly on agriculture for their livelihood. Cambodia is competitive competitive across a fairly wide range of agricultural sectors. Much remainhowever, to realize the full potential of this competitiveness and prospective comAchieving this will require, among other things, very large investments in rural iin agricultural extension services to improve producer skills, and improved proceproducts, for example the milling and grading of rice to international stanGovernment programs, the donor community an

complex process that needs to be backstopped by a trade policy that providprotection to domestic producers from agricultural imports, while ensuring thaagriculture that is competitive has access to markets abroad.

- Millennium Summit Development Goals (MDGs): Putting trade aperspectives: Cambodia has committed itself to achieving the MDGs7 which emimportance of efforts to integrate peace and development, and called for a coocomprehensive approach by all partners to support economic growth, investment, environmental protection, peace-building and the promotion of goodNonetheless meeting the MDGs is not without challenges for Cambodia. Poverty reduction

ev ng the MDGs, Cambodia needs to tackle simultaneously several pivoincreasing ODA flow; (2) mobilizing domestic resources through a sound fiscalsystem; (3) enhancing capital flows through FDIs; (4) using international trade as

7 The MDGs constitute eight basic poverty reduction goals ranging from access to social services and gender equity to environmental sustainability. More specifically they are: Goal 1: Eradicate extreme poverty and hunger; Goal 2: Achieve universal primary education; Goal 3: Promote gender equality and empower women; Goal 4: Reduce child mortality; Goal 5: Improve maternal health; Goal 6: Combat HIV/AIDS, malaria, and other diseases; Goal 7: Ensure environmental sustainability; Goal 8: Develop a global partnership for development.

8 Excerpt of Cambodia's Viewpoints Presented at the International Conference on Financing for Development (Monterrey, Mexico, March 18-22, 2002).

14

here is every as a means to

ic goals, one of which is to facilitate the peaceful re-emergence of

mbodia’s own mentioned.

th the WTO ents comes to estrictions on es have been dia’s garment members are

s of that date, Cambodia is not a

mem Cambodia’s 05 would put tors.9

scious on the ) substantive implementing l necessary in

infrastructures and analytical capacities required for accession negotiations; (iii) increasing demands by some WTO member, that require from acceding countries, in one way or another, a higher level of obligations and commitments than the level of obligations and commitments made by the original WTO members in the Uruguay Round, which thus affect the balance of their WTO rights and obligations.10

official Cambodia does not want only to be seen as “The Killing Fields”. Tindication that Cambodian policymakers see Cambodia’s accession to the WTO fulfilling broader strategCambodia as a trading nation.

2. External Realities: In addition to these fundamental realities regarding Ca situation, an important reality of the international trading regime needs to be

- The challenges of facing a quota-free world: In accordance wiAgreement on Textiles and Clothing, the special regime governing trade in garman end on 1 January 2005. This regime allowed countries to apply quantitative rimports of clothing. Accordingly, the garment exports of almost all countrisubject to quotas in major world markets, in particular the United States. Camboexports have also been subject to quotas. On 1 January 2005, however, WTO obliged to eliminate quotas on clothing imports from other WTO members. Aaccess to world markets will be unrestrained for WTO members. f I

ber on that date, countries will be free to continue to impose quotas onexports, and will undoubtedly do so. Thus, failure to join WTO by 1 January 20Cambodia’s garment industry at a significant disadvantage relative to its competi

- The challenges of the accession process: Cambodia was also condifficulties faced by countries seeking accession, particularly arisen from: (ipolicy issues relating to adjustments in their development strategies and instruments, economic and social goals, and legislative reforms - which are alcompliance with the WTO Agreements; (ii) insufficient knowledge, experience, resources,

9 For a full understanding of the Cambodian garment industry strategy see Ministry of Commerce (2002b). Available also on <http://www.moc.gov.kh.>

10 Based on recent accession experience, Tariffs, Agriculture, and Rules and Disciplines are the areas in which members typically request that acceding countries make more far reaching commitments than those made by many existing members at similar levels of development.

Tariffs. Acceding countries are requested to bind all tariffs, whereas many developing countries continue to have a large portion of their tariff schedule outside agriculture unbound. Ceiling bindings have been accepted, but there is pressure to bind close to applied rates.

Agriculture. In addition to binding the tariff schedule, commitments are expected on aggregate measures of support (AMS), export subsidies, and the like. Since many acceding countries did not provide substantial support to agriculture but, rather, penalized it, the requests they face for reductions in AMS may not be warranted, and in any case meaningful calculation of commitments in this area is subject to serious statistical difficulties.

Rules and Disciplines. Acceding countries are typically requested to meet all commitments at entry with regard to, for example, TRIPS, customs valuation, standards, and SPS regulations, without time limits such as those available to existing members at similar levels of development, and regardless of whether institutional weaknesses make it difficult for them to fulfil such commitments. Such weaknesses relate broadly to the operations of a market economy; it takes time to establish the institutional infrastructure that would enable the applicants to discharge their responsibilities properly under the WTO agreements. When such weaknesses are brought out in negotiations, members suggest that the applicant seek technical

15

B. Formulating an Accession Strategy

ating team to idelines were tent with the

l trade is playing, and can continue to play, in Cambodia’s economic development. The eight main building blocks around which the

d for a rapid t industry, as Cambodia’s uaranteed by neral Council id accession

ge number of ey also knew

that the decision by the General Council would allow Cambodia to do part of this after re dependent

y to adjust to tion.

ly 2003. The

with qualified human resources diverted and reshuffled, financial resources reallocated, and poli

pidly, and no

n, Cambodia reduced the harged a duty er tariff rates

ad previously been applied. The Cambodian policy-makers were persuaded that these redu to the overall

protection in inally, tariffs

contributed an important part of the budget revenue. For all of these reasons, the negotiators were determined during the WTO negotiations to avoid any commitment to reduce tariffs further.

3. Export orientation: In order to be competitive on world markets, an export industry needs to have access to raw materials and intermediate inputs at world market prices. Cambodia has always recognized this, and, under the Law on Investment, has provided export

For Cambodia, the considerations outlined above have allowed the WTO negotiformulate some broad negotiations guidelines with WTO members. These gudesigned to ensure that the country negotiating strategy at WTO was fully consisview of the important role that internationa

Cambodian strategy was constructed were as follows.

1. Timing: Cambodia targeted a rapid accession to WTO. The neeaccession was driven mainly by the 1 January 2005 deadline facing the garmenexplained above. But the Cambodian negotiators also believed that it was ininterests to achieve quickly the assured access to all export markets that is gWTO membership. Moreover, they believed that the decision by the WTO Geon the accession of Least Developed Countries, described below, made a rapfeasible. They understood that Cambodia would need to draft and adopt a larlaws so as to create a trade regime that was consistent with WTO rules. But th

accession. Further, Cambodia had not developed any domestic industries that wefor their survival on high tariff protection. Allowing time for domestic industrany tariff reductions that might be required by accession was thus not a considera

Another consideration was the holding of the national general elections of Junegotiators were of the belief that momentum would be lost during and after the elections,

cy focus possibly misplaced.

In short, timing wise, Cambodia saw a number of reasons for going forward raarguments in favour of a slower accession.

2. Tariff concessions: Shortly before negotiations with WTO begahad undertaken a reform of its tariffs on imports of goods. This reform hadnumber of tariff “bands” from 12 to 4, so that after the reform all goods were cof either 0, 7, 15, or 35 per cent. In the process, Cambodia eliminated some highthat h

ctions and simplifications had met the country’s needs and also contributedliberalization of world trade. They were also mindful of the need to keep someplace for the Cambodian small and medium sized enterprises and agriculture. F

assistance, available from a variety of bilateral and multilateral donors, and that it present a detailed plan regarding the particular aspects of the relevant WTO provisions in which weaknesses exist and how and within what time period it proposes to remedy them.

16

ds, and raw le with WTO

was essential port oriented

were thus determined to maintain this capacity to offer such advantages, despite WT

vestment: Asvestment, in

herefore, the central activeness of this.

o produce in an be certain gher than the

g from other because most ariff lines, a on his export rtain that his

r any kind of quantitative restraint in his export markets easons, WTO Cambodia for AN member

lace the legal een actively

onal Assembly the laws necessary for a ust have laws ted to trade. elcomed the proper legal

s to investors sinesses. This infrastructure

includes services such as telecommunications, transportation, banking, accounting and auditing. The investment environment is also enhanced by the availability of an educated and trained labour force. Cambodia saw the WTO accession negotiations on services as an opportunity to encourage foreign investment in key services infrastructure, and therefore as an opportunity to enhance the country’s overall environment for business. Likewise, foreign participation in adult education and training would help develop the skilled work force that is necessary to attract skill-based industries and to allow for increased wages.

industries with duty-free access to imported capital and intermediate goomaterials. The way in which Cambodia does this, however, is not fully compatibrules. Nevertheless, the negotiators understood that maintaining these privilegesto the Cambodian garment industry, and to their future ability to attract other exindustries. They

O rules.

4. Improving the investment climate and fostering foreign direct inmentioned earlier, increased exports and jobs will depend on increased inparticular foreign direct investment. The negotiators understood, timportance of using the accession to WTO as a means to increase the attrCambodia as a place to invest.11 WTO membership offers three main ways to do

First, WTO membership provides certain assurances for investors wishing tCambodia for export to other markets. This is because a Cambodian exporter cthat his goods will be charged a rate of duty in the importing country that is no hirate charged by the importing country on identical or similar goods cominexporting countries. This is called Most Favoured Nation Treatment. Moreover,WTO members have “bound” (i.e. set legal ceilings on) most of their tCambodian exporter will know the maximum legal duty that can be chargedgood in any WTO member country. Further, a Cambodian exporter can be ceexports will not be subject to quotas o(for garments, this will be true only after January 2005). For all of these rmembership reduces the uncertainty facing an investor who wants to produce in export to other markets. (Note, for investors who wish to export to other ASEcountries, the relevant ASEAN norms apply.)

Second, WTO membership requires an intensified effort by Cambodia to put in pframework required by business. The Royal Government has for some time bengaged in developing and submitting to the Natimodern, liberal, and business-friendly legal environment. A member of WTO mthat embody WTO rules concerning international trade and activities relaCambodia understood from the outset that this would be necessary, and wrequirement as a way of ordering and accelerating its efforts to create a framework for business that fully reflects international norms.

Third, Cambodia understood from the outset that the country’s attractivenesdepends on the availability of the infrastructure required by bu 12

11 See Siphana Sok. (2001a). 12 See World Bank and the Public-Private Infrastructure Advisory Facility. (2002).

17

ould advance re aware that the scope of

mitments to ress services

in a particular services sector would help move them toward their broader development obje es, ts.

et access and as well as ecial rules in ese rules are ncreased, and

ounts. They oducer across ded by other

Cambodia. As mentioned above, however, they understood that we would need to maintain mini l, b ht to provide

competitive. y.

ts Ministerial st Developed ion of patents implementing g the right to

ambodia, since it has icu d other major

o fight these t importance at the WTO

gotiations.

In view of the ast-developed xible in the special and arding least-

The problems were acknowledged by the WTO members in the Doha Ministerial Declaration. Accordingly, they agreed to work to facilitate and accelerate negotiation with acceding LDCs and reaffirmed the commitments undertaken in the Programme of Action for the Least Developed Countries for the Decade 2001 -2020 agreed at the Third United Nations Conference on the Least Developed Countries held in Brussels in May 2001. In the Programme of Action, development partners of LDCs agreed to facilitate the accession process of non-members "on the basis of terms that take into account their stage of

For these reasons, the negotiators understood that their negotiations on services cthe country’s overall strategy of improving the business environment. They wethe decision of the WTO General Council called for members to limit negotiations on services. However, rather than seeking to limit Cambodia’s comthe bare minimum referred to by the General Council, they preferred to addissues on a case-by-case basis, and when they were convinced that agreeing to liberalization

ctiv they were prepared to engage in negotiations and take on commitmen

5. Retaining policy options and flexibility on agriculture: Markimprovements in the investment environment will benefit agriculture manufacturing and services. The negotiators knew, however, that there were spWTO regarding the way governments can support their agricultural sector. Thdesigned to insure that support measures that distort trade are not introduced or ithat any existing measures that distort trade are gradually reduced to minimal ambelieve that Cambodia is a competitive or potentially competitive agricultural pra broad range of agricultural products. Rules that reduce the support provicountries to their less efficient producers will therefore ultimately be to the benefit of

ma ut adequate, tariff protection of agricultural products, and retain the rigsupport to domestic producers that genuinely assists them in becoming more Achieving these ends was an important element of Cambodia’s accession strateg

6. Securing LDC benefits with regard to public health: At iConference in Doha in 2001, WTO adopted a Declaration granting LeaCountries certain special privileges as regards WTO requirements for the protecton pharmaceutical products. The objective of the Declaration, and subsequent decisions, was to allow LDCs to have access to cheap drug products, includinimport cheap pharmaceuticals. This provision is particularly important for C

diff lt public health issues as regards HIV AIDS, tuberculosis, malaria, andiseases. At the same time, the country is dependent on imports of drugs tdiseases, and the financial resources available are limited. It is therefore of greathat it should have access to medicines at the lowest possible prices. Ensuring thDeclaration applied fully to Cambodia was thus an important objective of the ne

7. Securing maximum benefits special and differential treatment: difficulties Cambodia was facing, and bearing in mind its status as a leeconomy, Cambodia called on members of the Working Party to be flenegotiations to establish Cambodia's WTO commitments and to extend differential treatment as foreseen in the provisions of the WTO Agreements regdeveloped countries (LDCs).

18

d differential treatment" and to "supportefforts of LDCs seeking to accede" in various ways, including:

(i nd tailored to O procedural

ns on special

(i financial and te, in seeking es in keeping

(i at are commensurate

(v tinuing to provide adequate and predictable assistance to LDCs for their ance;f accession to

In the case of LDCs, the Doha Ministerial conference pledged, in paragraph 42 of the Doha ins a priority ith acceding

TO agreed to:

d accelerated cluding these under:

- Market access: 1) WTO Members shall exercise restraint in seeking concessionsand m e

embers; 2) ents on trade

nd trade

: 1) SDT, as set out in the Multilateral Trade nts, shall be tive Protocols pecific WTO d obligations, development,

Another important breakthrough came about on 10 December 2002 when the WTO General Council, in pursuance of the Doha mandate, and in an attempt to mainstream the Brussels Programme of Action into WTO work and actions adopted Decision No. WT/L/508 on the Accession of LDCs. In the decision, Members agreed that they would be bound by certain restraints in dealing with LDCs seeking to join WTO. In particular, they agreed that they: 1) would not seek sharp reductions in tariff levels; 2) would require concessions on relatively

development and the basic principles of special an

) Ensuring that the accession process is more effective and less onerous atheir specific economic conditions, inter alia, by streamlining WTrequirements;

(ii) Providing for automatic eligibility of all acceding LDCs for all provisioand differential treatment in existing WTO agreements;

ii) In view of LDCs' special economic situation and their development, trade needs, WTO members should exercise restraint, where appropriaconcessions in the negotiations on market access for goods and servicwith the letter and spirit of the provisions of the Ministerial Decision on Measures in Favour of the Least Developed Countries;

v) Seeking from LDCs in the accession stage only commitments thwith their level of development;

) Conaccession process, including technical, financial or other forms of assist

(vi) Accelerating the accession process for LDCs that are in the process oWTO.

Declaration, to facilitate LDC accession to the WTO, “Accession of LDCs remafor the Membership. We agree to work to facilitate and accelerate negotiations wLDCs”. Implementing the Ministerial decision, the General Council of the W

- Negotiations for the accession of LDCs to the WTO, be facilitated anthrough simplified and streamlined accession procedures, with a view to connegotiations as quickly as possible, in accordance with the guidelines set out here

co mitments on trade in goods and services from acceding LDCs, taking into account thlevels of concessions and commitments undertaken by existing WTO LDC Macceding LDCs shall offer access through reasonable concessions and commitmin goods and services commensurate with their individual development, financial aneeds.

- Special and Differential TreatmentAgreements, Ministerial Decisions, and other relevant WTO legal instrumeapplicable to all acceding LDCs, from the date of entry into force of their respecof Accession; 2) transitional periods/transitional arrangements foreseen under sAgreements, to enable acceding LDCs to effectively implement commitments anshall be granted in accession negotiations taking into account individual financial and trade needs.

19

its laws and presented a

e in the years immediately following accession,

substantially rs in seeking

tments on trade in goods and services from acceding LDCs, and nt provisions

These, then, were the main considerations that guided the Cambodian negotiators throughout

is no official e Marrakech

member may e Ministerial s majority of criteria nor

tions between the any concrete be used for

ed over time ve to do.

ies and three aration of a

s in detail the onal trade; (b)

phase; and (c) the negotiation phase. The last two phases, while conceptually separate, tend to overlap in practice. Throughout, the applicant is faced with meeting WTO requirements and provisions, as well as demands by existing members. With very few exceptions, negotiation is in one direction only: the applicant is asked to demonstrate how it intends to meet the existing WTO provisions-it cannot change them. Existing members can ask the applicant to reduce the level of protection in its markets, but the reverse does not usually occur.

few services sectors; and 3) would allow an LDC to join WTO before all regulations were in full compliance with WTO rules, provided that the LDCdetailed work-plan for achieving compliancand committed itself to executing fully that program.

It was expected that the decision (which is also called "guidelines") wouldfacilitate LDC accessions, particularly by exercising restraint on WTO membeconcessions and commiallowing acceding LDCs to benefit from the special and differential treatmeunder the WTO Agreements.

their negotiations with WTO Members.13

SECTION 2: THE PROCESS OF ACCESSION

The process of accession to the WTO is demanding and lengthy.14 There description of what a country has to do in order to join WTO. Article XII of thAgreement establishing the WTO states simply that a country that is not a become a member “on terms to be agreed between it and the WTO. ThConference shall approve the agreement on the terms of accession by a two-thirdthe Members of the WTO.” Article XII does not stipulate any membershipprovide guidance on the 'terms to be agreed', these being left to the negotiaWTO Members and the Candidate. Furthermore, Article XII does not identify steps, nor does it provide any advice when it comes to the procedures to negotiating the terms of accession.15 Nonetheless, certain practices have evolvthat provided reasonable guidance as regards to what an acceding country will ha

The accession process can be divided into an introductory phase of formalitsubstantive phases. The three substantive phases are (a) the applicant's prepmemorandum on the foreign trade regime (the "memorandum"), which describecountry's policies and institutions that have a bearing on the conduct of internatithe members' fact finding

13 The section draws mostly from the presentation made by the Minister of Commerce at the National Assembly during the ratification of the Protocol of Accession on September 14, 2003.

14 See WTO (1999). 15 By early December 2004, more than 20 new members had joined the WTO since its establishment, bringing

membership to 148, including two LDCs (Cambodia and Nepal) and three separate customs territories (Taiwan, Penghu, Kinmen and Matsu [Chinese Taipei], Hong Kong [China], and Macau).

20

eas related to “bindings” or egotiate with t; (iii) it must an effect on

f an acceding l part of the itional MFN egotiation, of d result in a

specific commitments formatted appropriately in a table and annexed to the Accession. Finally, there is a “sub-tract”, which is concerned with plurilateral

ith interested

has provided e with WTO schedules of

along with the corresponding n, is prepared by the secretariat for

neral Council

ts own to the with France. accession to

as Cambodia ies of GATT ievement of contracting

y of its trade regime and fewer new commitments than did the ordinary accession process of GATT Article XXXIII. Cambodia qualified for this route to accession, insofar as France did apply GATT rules to Cambodian trade while the country was under a protectorate, and duly informed the GATT of this fact upon Cambodia’s independence. Nonetheless, Cambodia made a very serious effort to accede to GATT on its own, following the more difficult approach of negotiating under GATT Article XXXIII. The country took this approach in order to avoid adopting the tariff commitments that France had already made in GATT negotiations. The

Basically, a country seeking to join WTO must take on commitments in four arthe functions spelled out above: (i) it must negotiate with members a set of maximum levels of tariffs that it will apply on its imports of goods; (ii) it must nmembers conditions for access by foreign services suppliers to its services markeagree to limitations on those forms of support to agriculture that haveinternational trade; and (iv) it must bring its laws and regulations governing international trade into conformity with WTO rules before it joins WTO.

These negotiations are carried out bilaterally with the main trading, partners ocountry. The list of concessions in a WTO format (a table) forms an IntegraProtocol of Accession, and the concessions should be extended on an uncondbasis to all other WTO members. Market access in the services track involves ncommitments on trade in services, which are also conducted bilaterally anschedule ofProtocol ofdiscussions on agricultural domestic support and export subsidies commitment wWTO member.

When these negotiations are in the process of being finalized and the applicantassurances that the legislation and institutions that would permit compliancprovisions are in place, a draft report on accession, including the consolidatedconcessions of agreed commitments on goods and services documents that together stipulate the terms of accessioconsideration by the working party.16 After approval by the working party, the report is forwarded to the General Council. Following a favourable decision by the Ge(usually a formality), the country is invited to sign a protocol of accession.

A. What are the specifics of Cambodia’s accession process?

As a matter of historical perspective, Cambodia came very close to acceding on iGeneral Agreement on Tariffs and Trade (GATT), due to its former relationshipThe country’s previous colonial status could have facilitated Cambodia’s GATT.17 Under the terms of Article XXVI:5(c) of GATT 1947 countries suchwere permitted a relatively easy route for entry into GATT. Former coloncontracting parties could acquire de facto GATT status upon their achindependence. A country could then convert this de facto status into full GATTparty status by succession, a process that involved much less stringent scrutin

16 These bilateral schedules of commitments on Goods and Services once reviewed in the Working Party will be multilateralized thereafter, that is, extended on a most-favoured-nation (MFN) basis to all WTO members. In this way, these became part of the multilateral treaty terms of the acceding country's membership in the WTO.

17 See VanGrasstek (2000).

21

rties over theril 6, 1962.18

ompleted the have been a

of the GATT,e still outside the system — had to meet the

more rigorous requirements of WTO accession.

B e tings

orking PartyWTO was

nd, like allok place atn Geneva,

raditionallyteral track.n of the

d economicand their

the WTOimately the

t Protocol ofTO. This

e basis of theby Cambodiaquestions andvery of the

arty’s report and the Protocoletailed termsparty usuallyemorandumnd answers

ing party is open to all members of the WTO. In the case of applications by large countries such as China or Russia, manycountries participate; in the case of smaller countries like Cambodia, the working party is usually made up only of the "Quad" (Canada, the European

country went so far as to finalize negotiations with the existing contracting paterms of its protocol of accession, which were formally concluded on ApAlthough the Geneva side of the process was concluded, Phnom Penh never cdomestic ratification procedures. Had Cambodia did so, the country couldfounding member of the WTO. Unfortunately, the option expired with the endand Cambodia — like all other countries that ar

. Working Party M e

The first meeting of the Won Cambodia’s Accession toheld in May 2001, asubsequent meetings, toWTO Headquarters iSwitzerland. This track is tcalled the systemic or multilaIt provides for examinatioforeign trade regime ansystem of Cambodiacompatibility withAgreements - and ultpossible terms of a drafAccession to the Wexamination is made on thMemorandum submittedand subsequent rounds ofanswers as well as deliWorking Pof Accession setting out dof accession. The workingdoes not meet until the mand the initial questions ahave been distributed.

Membership in the work

18 See the “Protocol for the Accession of Cambodia,” in General Agreement on Tariffs and Trade, BasicInstruments and Selected Documents Eleventh Supplement (Geneva, Switzerland: GATT, 1963), pages 12-16. Note that this document does not include the annexes to the protocol (which would consist primarily ofthe tariff concessions that Cambodia made in the negotiations over its accession).

Status of Cambodia’s Acc ses ionWorking Party

1. Application Received 8 December 19942. Working Party Established

Chairperson: Mr. A. Meloni (Italy)21 December 1994

3. Memorandum 22 June 19994. Questions and Replies 4 January 20015. Meetings of the Working Party 22 May 2001

14 February 200214 November 200222 July 2003

6. Documentation (other)(a) Additional Questions & Replies 11 December 2001

29 July 20023 March 2003

(b) Agriculture (WT/ACC/4) 11 December 200126 July 2002

(c) Services (WT/ACC/5) 3 March 2003(d) SPS/TBT (WT/ACC/8) 11 December 2001

11 December 20013 March 2003

(e) TRIPS (WT/ACC/9) 11 December 200131 July 2002 3 March 2003

(f) Legislative Action Plan 11 December 200129 July 2002

7. Negotiations on Goods(a) Tariff Offers 11 December 2001

29 July 2002 3 March 200322 July 2003

(b) Draft Goods Schedule 8. Negotiations on Services

Draft Services Schedule 11 December 200129 July 2002 3 March 2003 18 July 2003

9. Factual Summary 30 October 200210. Draft Working Party Report 24 March 2003

19 June 2003 22 July 2003

22

ing countries orking Party tions, and to

WTO rules. fully the steps that it still had to take

Cambodia’s estions.20 As for additional the Working he question - l weaknesses ency between phase are also ions taken to e next round.

the WTO secretariat had drawn up in the areas of services, import licensing, intellectual ry and phyto-

epare offers of the concessions it

hey were sent

ebruary 2002 om acceding . This second held in 2002 an Opening

gress made by the Royal Government since the last Working Party.21 Cambodia emphasized the importance of this 2nd Working Party as the first Working Party of an LDC post-Doha 4th WTO Ministerial Conference. The Doha Ministerial Declaration (DMD) made specific reference to Para 42 where there are provisions highlighting the need to fast track and facilitate the accession of LDCs to the WTO. Cambodia reiterated to the Working Party that its accession is a test of the sincerity and the intention of developed countries with regard the DMD.

Union, Japan, and the United States) plus a number of other members, includthat are significant trading partners of the applicant.19 The purpose of the Wmeeting was to continue the examination of Cambodia’s trade laws and regulaallow Members to see the extent to which these laws were consistent withAnother purpose was to help Cambodia understand moreto bring its laws and regulations into compliance with WTO rules.

First Working Party: The first meeting consisted of an examination ofmemorandum, and of the answers that Cambodia had provided to Members’ quis always the case in all accessions, this examination gave rise to requests information. Cambodia was also requested to submit for the consideration of Party members relevant legislation on a variety of issues covered by the WTO. Tand- answer process is very time consuming. Cambodia's initial institutionaresulted in delays of nearly one year while the Government ascertained consistexisting legislation and regulations and WTO requirements. Delays during this frequent. If a member feels that the answers submitted to a question or the actremedy an inconsistency are inadequate, it simply resubmits the question for thMoreover Cambodia was requested to provide replies to standard detailed questionnaires that

property protection, support to agriculture, technical barriers to trade and sanitasanitary regulations. Cambodia was also requested to prwould be prepared to make on import tariffs and services.

Once all these materials had been prepared and approved by the Government, tto WTO and the stage was set for the second Working Party meeting.

Second Working Party: The Second Working Party meeting were held on 14 Fand attended by 22 Cambodian delegates, WTO members and observers frcountries and international organizations as well as staff of the WTO Secretariatmeeting established the format that would be used in all the subsequent meetingsand 2003. The head of the Cambodian Delegation was requested to makeStatement, which focused on the effort and pro

19 Working Parties Members included: Australia, Canada, China, EU, India, Japan, Rep. Korea, Malaysia, New Zealand, Panama, Singapore, Chinese Taipei, Thailand, United States and Venezuela Argentina, Bangladesh, Dijouti, Guinee.

20 The Working Party had before it, to serve as a basis for its discussions, a Memorandum on the Foreign Trade Regime of Cambodia (document WT/ACC/KHM/2), the questions submitted by Members on the foreign trade regime of Cambodia, together with the replies thereto, and other information provided by the authorities of Cambodia (WT/ACC/KHM/3; WT/ACC/KHM/6; WT/ACC/KHM/7 and Revisions 1 and 2; WT/ACC/KHM/8; WT/ACC/KHM/9; WT/ACC/KHM/10 and Revisions 1 and 2; WT/ACC/KHM/12; WT/ACC/KHM/13 and Revision 1; WT/ACC/KHM/14 and Revision 1; WT/ACC/KHM/15 and Revision 1; WT/ACC/KHM/16 and Revision 1; WT/ACC/KHM/17 and Revision 1; WT/ACC/KHM/18; and WT/ACC/KHM/20), including the legislative texts and other documentation listed in Annex I.

21 See Annex V for a full length of an opening statement made by Cambodia.

23

14 November orking Party process has

time on the

terms of entry. The WTO Secretariat has drafted a Factual Summary which can be used as a

arty meeting and focus on ssion Report. and services, nal report, the gotiations. In TO Members

the meeting, participants agreed on rmal meeting schedules of

ia and WTO embership by

tries, of three

t of the WTO Working Party, in which all of the stency with the WTO

ffs. This also

C. Government institutional set up and mechanisms for policy coordination:

The Royal Government was aware that the complex task of preparing the memorandum and of managing the negotiations that would follow required new and special governmental machinery. The Government instructed the Ministry of Commerce to act as the focal point for

Third Working Party: Cambodia held its third Working Party meeting on 2002.22 The Chairman of the Working Party expressed that the outcome of this Wwill determine the next stage of the meeting. He felt that Cambodia accessionreached a critical stage as WTO members have begun focusing for the firstelements of a draft working party report and, thereby, concentrated on agreeing Cambodia’s

useful reference and can lead to the early drafting of the Accession Report.23

Fourth Working Party: On 16 April 2003, Cambodia held its fourth Working Pthe aim of which was to review the state of play of bilateral negotiations substantive discussions of a first version of the Working Party’s draft AcceSupporting documents submitted by Cambodia included revised offers of goodsaction plans, and the legislative program. By considering the first draft of its fichairman stated that the working party has moved into the final phase of the nethe concluding remarks, the Working Party Chairman has suggested that Wsubmit or propose commitment paragraphs. At the end ofthe July target for completing the Working Party’s Accession Report. An infowas proposed in June 2003 to consider a new draft, possibly together with draftcommitments for access to Cambodia’s goods and services markets.

Fifth Working Party: On 22 July 2003 Cambodia held its fifth and last Working Party where the Cambodia Working Party Accession Report was completed.24 Cambodmembers in the Working Party stated their optimism to complete Cambodia’s mthe Fifth WTO Ministerial Conference in Cancun, 10–14 September 2003.

The accession package for Cambodia consisted, as for any other acceding counajor parts:25m

(i) Protocol of Accession and the Repor"systemic" commitments and obligations (i.e. those reflecting consirules) are undertaken with reference to the WTO rules and disciplines;

(ii) Schedule of concessions on market access in goods, namely bound tariincludes data on domestic support measures export subsidies in agriculture;

(iii) Schedule of specific commitments in services.

22 Working Party members: Australia, Canada, China, European Union and member states, India , Japan, Korea, Republic of, Malaysia, New Zealand, Singapore, Chinese Taipei, Thailand, United States, Venezuela.

23 See WTO News: 2002, Cambodia membership negotiations, Cambodia aims for membership by Cancún meeting, 14 November 2002. Available also on <http://www.wto.org.>

24 Working party members: Australia, Canada, China, EU, India , Japan, Rep. Korea, Malaysia, New Zealand, Panama, Singapore, Chinese Taipei, Thailand, United States, Venezuela.

25 See WTO News: 2002, Cambodia membership negotiations, fifth Working Party meeting, Working Party completes Cambodia’s membership negotiation, 22 July 2003. Available also on <http://www.wto.org.>

24

in September as chaired by e policy level

activities at cession; (ii)

e necessary n; (iv) define the governments priorities related to foreign trade policies; (v)

ensure coordination among Ministries; (vi) report to the Prime Minister on issues related to

necessity and icials in the task force is

rised of officials – both at the wide ranging

nt mission in

g Committee to guide and strategy. The

the MoC and is composed of high level policy makers at the vice inister and under secretary of state level as nking and

er at the vice minister level (commerce) who nals recruited

l Council for with poverty

composed of ic and line ministries. The work of the CSD is central in steering

the preparation of the National Poverty Reduction Strategy (NPRS), and the monitoring of sectoral and

assessment of ocess and the er providing

ge number of y integrating in the NPRS

ade on the linkages between the trade sector and poverty alleviation in Cambodia, for example the need to focus on labour absorption, and facilitating income and employment generation for the rural poor.

The combination of the three mechanisms (WTO task force to deliver technical results and the IFSC to deliver on the necessary TA support and the NPRS for the overall overarching poverty reduction strategy) was critical, and in fact, has enabled the record time accession of Cambodia in the WTO.

activities related to WTO accession. In addition, the Government established 1997 an Inter-Ministerial Coordinating Committee on WTO Accession that wthe Minister of Commerce. This Committee was made up of 15 members at thand three officials from each of the 23 ministries and agencies involved in WTOthe working level. Its role was to (i) coordinate policy issues related to WTO acelaborate guidelines to implement WTO Agreements; (iii) prepare thdocumentatio

WTO accession.

As the negotiation was about to get started, the Prime Minister has felt the urgency to appoint a large think tank comprising of over 100 senior offgovernment to assist in matters related to Cambodia's accession to the WTO. Theunder the chairmanship of the Minister of Commerce is comppolitical and technical level – and professional negotiators with competence on issues. Moreover, Cambodia has also deemed essential to open a permaneGeneva to effectively promote and protect its economic and trade interests. Another coordination mechanism is the high-level Inter-Ministerial Steerin(IFSC) to coordinate trade related TA under the IF. The mandate of the IFSC ismonitor the formulation and implementation of a “mainstreamed” trade sector ISFC is also chaired bym well as representatives of the baprivate sector. The IF Focal Point is a policy makis supported by an active IF national core team composed of eight professiomostly from within the MoC.

D. Other Intra-governmental policy co-ordination.

On the larger scale, Cambodia has another mechanism called the inter-ministeriaSocial Development (CSD). The CSD is the Government’s agency mandated focused policy and programme design, and monitoring of implementation. It isrepresentatives from econom

process, inputs, intermediary outputs and outcomes in close co-ordination withlocal level monitoring systems. The work of the CSD includes ex-ante impact major policy reforms (macroeconomics, sectoral and budgetary). The WTO prIF work were closely co-ordinated with the work of the CSD with the formcritical policy-level sector inputs.

For its part, the NPRS process was highly participatory and addressed a larsectoral issues. Trade was successfully integrated in the NPRS. This took place bthe trade action plan matrix, which identifies trade objectives and priorities, action plan. Considerations were m

25

re team is of e demanding ize additional load. Already nstantly sent the shortage

capacity has as acted very ss. Moreover antive policy

MoC core team has even expanded their the various

committee or alue of their

on two basic nerships with ultations with

formulate comprehensive and the WTO negotiations. During the WTO process

s to the task force for decision thus lessening the the MoC lied

t is a legally t sets out not ny aspects of

regulation, legislation, judicial process and investment conditions within the new member.

d disciplines s members. It he markets of

rances of its ntation, over

les and disciplines and predictable terms of market access and investment.

As such, before starting the negotiations, Cambodia needed to consolidate its positions and lay out clear boundaries beyond which no further concessions are possible. Accession to the WTO should not take place at any price, but on the basis of reasonable terms and conditions. In this context, Cambodia needed to be aware of, and fully understand, the implications, both short- and long-term, of their commitments, obligations and concessions on the national economic development.

Core team building within the WTO Task Force: The issue of building of a cogreat importance prior to engaging the WTO accession process. The resourcnegotiation process will inevitably impose pressure on the Government to mobilspecialized staff and local consultants to assist it in coping with increasing workthe existing resources were strained by the fact that the few key officials were coabroad to attend international conferences or training seminars, thus accentuatingof staff and senior policy makers to push domestic agenda. This specializedserved as a strong backbone for institutional building within the MoC and hefficiently both as local support during, and as follow up for, the accession proceit has enabled the MoC policy makers to free up their time to focus on substdiscourse and policy making. Over time, the activities to undertake regular dissemination and awareness campaign tostakeholders both at the national and provincial level.

Sustaining the dynamism of the WTO Task Force and the IFSC: A steering task force is effective only to the extent that its members feel the relevance and vcontribution into the process. Cambodia’s best practices were practically basedprinciples of regular engagement and pro-activeness. Forging effective partother government agencies and the private sector, accompanied by frequent consall economic actors, has ensured that the MoC couldconsolidated positions and arguments during the MoC could defer some sensitive issuepotential conflicts with other government agencies. In retrospect the strength of more in its ability to act as catalyst and coordinator for the WTO team.

E. Impact of studies to the accession process

The WTO is not a club that governments can join simply by paying a fee. Ibinding contract between all existing members and the newcomer. The contracmerely the conditions of trade between the parties but understandings on ma

The contract offers Cambodia all the advantages and security of the rules anwhich make up the WTO’s legal system and which govern the actions of all itoffers firm and predictable treatment for Cambodia’s products and services in tall other members.

For the existing members of the WTO, Cambodia’s contract provides assucontinued commitment to economic and other reform, the adequate implemetime, of all WTO ru

26

rts in policy cio-Economic Government ), the Interim

, the Pro-Poor Trade Sector Strategy27, and lastly the diagnostic trade integration study

ut of the hree countries me under the bal trade and genda or “to

development plans and poverty reduction strategies of the beneficiary countries, to ensure that trade policy and Trade-Related Capacity

ned, and that

etween trade trade reform olicy agenda tcomes of the

de-related capacity building and e country’s overall development strategy. This

h the other 5 c ag e of the first countri

More s following:) rformance in

icplications of past surveys

(ii) otably WTO ere made by

the resource constraints faced by a . An analysis

cope for high protection while not much established industry depends on this protection; the question whether tariff could be simplified without sacrificing revenue; and the implications of tariff binding. The impact of trade reform (notably tariff reductions) was assessed using household survey data.

(iii) A review of trade facilitation undertaken in close consultation with the resident IMF customs advisor. The study surveyed “behind the border” constraints finding

In recent years Cambodia has, to a large extent, benefited from a sustained effomaking as translated in a series of policy documents such as: the SoDevelopment Plan (SEDP I (1996-2000) and SEDP II (2001-2005),26 the RoyalPlatform for the Second Term 1998-2003, the Policy Framework Paper (PFPPRSP(DTIS).

Outline of “Cambodia: Integration and Competitiveness Study”: The carrying oDTIS came about following the selection of Cambodia in May 2001 as one of t– the other two being Madagascar and Mauritania – to implement a Pilot Scherevitalized Integrated Framework in order to enhance LDCs’ participation in gloinvestment. The core feature of this new approach was to embed a trade amainstream trade” into overall national economic

Building (TRCB) are coherent with the trade policy aims of the country concerthey are prioritized with other development assistance needs.

The DTIS looked at a number of issues, including establishing the link bdevelopment on the one hand and poverty reduction on the other, the impact ofon economic growth and development in the country, the complementary pnecessary to support successful trade reform, and market access issues. The ouDTIS provided the basis for identification of prioritized tratechnical assistance needs that are linked to the cisxer e was undertaken in country, with the World Bank as lead agency, witore encies, the IMF, ITC, UNCTAD, UNDP and WTO. Cambodia was on

es to undertake and complete a diagnostic trade integration study.

pecifically the DTIS provided for the(i A review and analysis of the country's growth and integration pe

historical and international perspective and a review of the macroeconomenvironment covering issues such as dollarization and the imminimum wages specified in dollars based on analysis and (IMF/UNDP/Asia Development Bank).

An assessment of current trade regime and trade policy reform, naccession aspect, including legal obligations and other compliances, wUNCTAD and WTO. The study highlighted small country like Cambodia to comply with the WTO requirementsof the existing cascade tariff structure raised issues such as the s

26 The documents are available also at <http://www.moc.gov.kh.> 27 The documents are available also at <http://www.moc.gov.kh.>

27

dministration highlighted as priorities for the country with both policy

(iv) entrepreneurs, arket access.

ents and associated costs (notably satisfying rules of origin and product standard requirements) were highlighted, with accompanying

) tract with the

(vi) A sectoral analysis focused on what must be done to strengthen and develop a d agriculture,

ork and has sectoral sub-ain Analysis, ; and the Development mpetitiveness , Diversified

trategy; (iv) EU’s Assessment of the Agro-Industrial Situation in Cambodia; (v) Japan’s Study on

Study on the in Cambodia; 1: Matrix of

ating team as ing Cambodia

clear policy ely: (i) the needs to clearly define its economic and integration strategies

ii) in its bilateral negotiations with nduly compromised the long-term

f the process eds to clearly st accession

The systematic translation into Khmer of key trade related documents has provided for additional opportunities to strengthen the partnership framework and allow for informed dialogue with the larger Khmer audience. Available documents on trade in Khmer and English have been collected and provided to MoC Provincial offices as a starting point for a local information resource. The MoC has translated selected trade related documents and disseminated them through inter-ministerial workshops including sensibilization missions to

transport costs a significant deterrent. Improvements to customs aand trade facilitation wereand assistance recommendations.

For the assessment of competitiveness of Cambodian exporters and a survey of 100 firms was conducted covering competitiveness and mMarket access impedim

assistance recommendations.

(v A review of the investment climate was conducted under separate congovernment, involving extensive stakeholder discussions.

number of product-sectors for exports, including: rice, diversifiehandicrafts, fisheries, and garments, tourism, and labor services.

DTIS as a framework: The DTIS has been instrumental in providing the framewacted as a catalyst for the carrying out of many strategic development plans andstrategies initiatives in Cambodia, to name a few: (i) the World Bank’s Value Chthe Investment Climate, the Private Sector Development StrategyProvincial/Regional Diagnostic Trade and Integration Study; (ii) the Asian Bank’s Private Sector Assessment, SME development, and the Garment CoStudy; (iii) the ITC’s Export-led Poverty Reduction Programme (EPRP)Agriculture and Agro-Processing Supply Capacity Study; and the E-Trade Bridge S

Regional Development of the Phnom Penh – Sihanoukville Growth Corridor; Improvement of Marketing System and Post-Harvest Quality Control of Rice and the Feasibility study on the Establishments of a Paddy Market; (See AnnexComprehensive Trade Related Initiatives).

Taken as a package, these studies were extremely helpful to the WTO negotithey projected a larger holistic view of the various issues and opportunities facin the WTO accession process. Specifically they offered the team with considerations, namand policies and their compliance with WTO principles; (WTO Member States on market access, the need not to uinterests of the country; (iii) the special attention to be given to the continuation orelated to the development of relevant legislation after accession; and (iv) the nedefine the requirements for technical assistance during the pre and poimplementation period.

F. Other supporting documentation and materials developed

28

ents; ration; Trade

rm; Commercial and IPR Laws; Trade capacity building and Trade support

to keep all O accession

e IF process in Cambodia. A Web-site was established at and managed by the MoC core team where information on policies, trade issues, laws,

THE WTO ACCESSION PROCESS.

keholders

ational trade orting plan of

stakeholders: business sector actors, development partners, and civil society. To achieve such support requires a process of

ation process e full measure

ainstreaming conclusion of rams into the

one of the most daring and pioneering approaches to nment have launched active public awareness

campaigns about the WTO, its agreements, the accession and implications of membership. In f government l factor for a

B. Government and private sector partnership

Cambodia is considered to have one of the most favourable policy approaches towards the private sector. It has a formalized procedure through which the Government and private sector are able to hold dialogue. Importantly, the private sector believes that action does result from

the provinces. Specific topics include, among others: selected GATT and WTO documImplementation of the IF in Cambodia; MDGs; ASEAN and Regional integpolicy refonetwork; etc.

The core team has also produced a series of trade research newsletters stakeholders, including private sector representatives, informed on the WTprocess and the progress of th

development studies are now hosted.

SECTION 3: PARTICIPATION OF NON-STATE ACTORS IN

A. Cambodia’s partnership mechanisms for consultation among key sta

Lessons from other developing countries suggest that implementation of a nsector strategy is unlikely to be very successful unless that strategy and its suppaction have received a large measure of support from other key

strategy formulation that engages these key partners directly into the formulitself. It is only in this manner that stakeholders can identify realistic goals, takof their respective commitments, and become true “owners” of the strategy.28

Had it not been for the clear framework the accelerated pace of the trade mprocess would not have been achieved, from the preparation for accession to the the accession to the WTO, to the integration of pro-poor trade policies and progNational Poverty Reduction Strategy.

Cambodia has probably developed policy dialogue consultations.29 The Gover

retrospect, effective cooperation among the executive and legislative branches oand effective public/private sector partnerships was perceived as an essentiasmooth accession process.

28 Cambodia’s trade policy framework was inspired largely by the works of the OECD. 29 The Cambodian Government has established since 2000 seven public/private sector consultative working

groups: (i) Banking & Finance Working Group, (ii) Export Processing & Trade Facilitation Working Group, (iii) Manufacturing & SME Working Group, (iv) Agriculture & Agro-business Working Group, (v) Energy & Infrastructure Working Group, (vi) Law, Tax & Good Governance Working Group, (vii) Tourism Working Group. So far seven public forums were held under the chairmanship of the Prime Minister in the past two years to discuss issues raised at the working groups.

29

m chaired by r the last four

Industry; (ii) Governance;

(vi) Energy and Infrastructure; and (vii)

six from the ortunities for

ed leadership dialogue involving the Government and the business sector. The me assistance

provement of cess was less m sector, the

essional services sector, there was no strong Government stances to be

king has been r Cambodia’s odian private

ry’s WTO membership. Without such understanding, it is very unlikely that they will be able to design business strategies that take

d to draw benefits from their country’s accession to uts from the n the basis of

s – especially eveloping countries. This includes the formal Consultative Group

udes working s (e.g. fiscal ing legal and e critical in

from a shared

Interestingly enough, during the conduct of the DTIS, the study team met with a wide range of donors and found that a significant number among them would be prepared to support more pointed efforts for business sector development provided that a solid framework exists to ensure overall coherence of individual donors’ interventions. Generally, the donor community in Cambodia would agree that trade sector development has not been at the top of its agenda until the advent of the WTO accession negotiation. For the most part, the emphasis since 1993 has been more on other pressing issues like: governance and government

their participation in the fora. At the peak is the Government–Private Sector Foruthe Prime Minister, seven sessions of which have been held in Phnom Penh oveyears. Seven business-government sectoral working groups have been formed to addresssector-specific problems on an ongoing basis, namely: (i) Agriculture and Agro-Tourism; (iii) Manufacturing and Distribution; (iv) Legislation, Taxation, and (v) Services including Banking and Finance; Processing for Export.

Each sectoral working group is run by a committee including ten members: business community and four from the government. The fora do provide oppWTO relatsecretariat of the Government Private Sector Forum is currently receiving sofrom the IFC.

While these working groups have produced significant effects on the overall imthe climate for private sector development their effect on the WTO accession prothan desirable. With the exception of the financial and banking sector, the tourisrice sub-sector, and the legal and accounting profprivate sector organizational structure capable of interacting effectively with theor to translate their sector-specific business interests into Cambodian policy defended in regional and international trade negotiations.

Therefore, enhancing Cambodia’s private sector participation in trade policymaone of the main objectives of Cambodia initial trade mainstreaming efforts. Afteaccession to the WTO, it is indeed important – if not urgent - that the Cambsector fully understands implications from their count

advantage of international trade rules anthe WTO. Likewise, the Cambodian Government, on its side, will need inpCambodian private sector, in order to be able to define Cambodian positions oclear interests and to participate substantially in the Doha Round.

C. Government and Donors’ Partnership

Cambodia has developed a fairly intensive system of consultations with donorwhen compared to other d(CG) meetings and the bi-annual post CG consultations. The CG process inclgroups involving donors and government and focusing on specific reform areareform, social sectors, public sector reforms, demobilization, governance includjudiciary reform, and natural resources management). These mechanisms arensuring that national stakeholders and donors at all times develop and work vision of objectives and goals.

30

and national ces, and food lf. In general, co-operating

d multilateral nstreaming of trade and improved donor coordination within

a country-owned poverty reduction framework. Since 2002, the CG has formally integrated

t role in the e pulse of the ncerns to the ociation will rking Group rm programs ling with the

strative reform, governance, fiscal reform, natural resource management, including land management, social sector,

owever, the epresentation

genda of the ntroduced in

r.” The MoC ther national

ch institutes and local civil society groups. Since then, an extensive awareness campaign with other civil society stakeholders was initiated, including the holding of international conferences, seminars and special condensed lectures within the national academic circles. These initial efforts are impressive and provide a basis for deepening the synergies thus far developed among trade sector stakeholders under the leadership of the MoC.30

institution building, macro-economic structural reform, consolidating peace security following the end of internal strife, removal of mines and other ordinansecurity. To a large extent, the business community has been left to fend for itsethe IF sponsored DTIS was well received by development partners, donors andagencies alike. They have since expressed a strong interest in the IF as a promising platformthat, if implemented well as a shared responsibility among donors, recipients anagencies alike, can promote mai

the trade dimension in its work agenda.

D. Government and partnership with civil society groups

Since the peace process in 1993, the civil society has played an importanmonitoring of poverty reduction. NGOs can prepare report card survey to feel thpublic on certain important issues, such as decentralization and convey the copolicy makers. In the future, trade unions, ethnic associations and farmers' assplay an important role in this monitoring process. For that purpose a Womechanism was established in 1999 at the CG meeting to follow up refoimplemented by the RGC and to allow donors to speak in one voice in deagovernment. At present, there are eight working groups on admini

demobilization, health and education; and government-donor partnership. Hperformance of the working groups was mixed, due to limited participation and rof the RGC is some of the WGs and the lack of coordination between groups.

Until the advent of the WTO negotiation, trade was not systematically on the acivil society groups. In fact Oxfam was the initiator of the trade issue when it i2002 its publication. “Rigged Rules and Double Standards: Make Trade Faioffered its sponsorship to launch the publication and engage the discourse with oresear

30 Events of importance during pre-accession period included, inter alia, the following: (i) International conference on "Globalization: Perspectives on Business and Law", 26-27 June 2001, followed by a special condensed lecture at the Royal Academy of Cambodia. The Conference Proceedings of "Globalization: Business and Law" was published and widely circulated in Khmer and English; (ii) Debates on Intellectual Property Rights at the Faculty of Law and Economics, 1 August 2001; (iii) Conference on "Peace, National Reconciliation and Democracy Building: Ten Years after the Paris Peace Agreements" Organized by the Cambodian Institute for Peace and Cooperation with the Support and Collaboration of the Office of the Council of Ministers, the Ministry of Foreign Affairs and International Cooperation, the Permanent Committee for National and International Events, the Friedrich-Ebert Stiftung and the Konrad-Adenauer-Stiftung, Government Palace, 12 October 2001; (iv) Interactive debates on the World Trading System at the Royal Academy of Cambodia – 9 May 2002, the Economics and Finance Institute – 17 May 2002, the National Management Institute – 31 May 2002; (v) Interactive debates on “Market Access and Export of Agro Products” to the National Media Club, organized by the Konrad Adenauer Foundation, Sunway Hotel, 22 May 2002.

31

FACED BY CAMBODIA WHEN NEGOTIATING WITH EXISTING WTO MEMBERS.

however, that the process of at the WTO

officials involved in the process to familiarize themselves with on its

which did not sufficient human or material resources to address the issues that have to be discussed in

detail. Cambodia has had to seek assistance from outside experts funded by bilateral and the World

Generally the preparation of the memorandum on the foreign trade regime by an applicant of the range

The applicant

smooth and successful membership

nefits. A and reforms

s: With due regard to their sources, both the national rty meetings, tion services -

illingness to case may be

areas like intellectual property rights, TBT, SPS, and custom valuation, bearing in mind that, along with the “most favoured nations regime" and "national treatment",

of national reforms. Law

l as well as human resources. Consequently, Cambodia needed to pay due consideration to law enforcement and institutional issues, and allocate accordingly their limited budgetary resources efficiently.

Commitment for policy implementation: Since WTO issues and agreements are rather complicated and cover a wide range of sectoral and cross-sectoral issues such as customs tariffs and valuation, agriculture, intellectual property, standards, services, anti-dumping,

CHAPTER 4: CHALLENGES

A. Political commitments

Cambodia applied for membership in WTO in 1994, but it was not until 1997, Cambodia was in a position to undertake the very complex tasks required to set accession in motion. While the interval seemed rather long, the observer statuswas necessary for Cambodianthe institution before they could get properly organize to prepare a memorandumpolicies or taking subsequent steps.

The preparation of the memorandum presents serious difficulties for Cambodia have

multilateral aid agencies, particularly from the WTO itself, UNCTAD and fromBank.

country explaining its policies and institutions can be a demanding task becauseof issues that the memorandum has to address and the degree of detail required. is solely responsible for the preparation, or any delay, of the memorandum.

Political will and commitment are thus an absolute requirement for accession. Without a clear government commitment to market reforms, WTOwill not be obtained and the process will likely result in frustrations rather than bestrong commitment may create a sound basis for ensuring that policies undertaken by the government are coherent with WTO rules and requirements.

Political commitments as reflected in budgetary allocationfinancial/economic constraints, Cambodia needed to mobilize the necessary refinancial and in kind, to fund the accession process. The necessary funds inbudget should be allocated for required travel associated with Working Pamissions, and bilateral consultations and negotiations in Geneva, costs of translaand possibly at times for revenue foregone as a result of concessions made.

Commitment for legislative changes: Cambodia needed to demonstrate their wparticipate in the world trading system by making new legislations, or as the amendments, in

the concept of "transparency,” - i.e. complete disclosure and predictabilitylegislation - should be the guiding principles for these legislative and regulatory implementation implies institutional changes, and hence requires adequate financia

32

ecessary for responsible for the coordinated

ple ents.

organization. d integration

of Cambodia d making its ndertaken by t further work Cambodia in

nical assistance to facilitate Cambodia's accession. Members looked forward to Cambodia's early accession on appropriate

rm dia's status as a least-developed country, and would

, questions and issues raised were

TT) and the g, (3) non-

abide by the ncy obligations, as contained in GATT Article X, across the board including

icial review. its Official hat practical published in

for comment protection of s appeared in s, as well as icial website.

he Cambodian court system although they recognized that the works on the drafting of the commercial court was a positive step. The outstanding issue then was that while works were ongoing the commercial court will not be in operation within the next few years, how Cambodia will be able to address the issue and how it intends to increase pace of the legal and judicial reforms, specifically on issues such as: breach of trust, lack of administrative chambers and appeals mechanism, enforcement of international commercial arbitration awards under the New York Convention to which Cambodia has ratified, and regular publication of full judicial decisions.

subsidies, foreign economic policy including regionalism and others, it was nCambodia to establish an institutional framework im mentation of policies related to WTO and WTO Agreem

B. General Observation from Working Party Members

Generally WTO Members welcomed the application from Cambodia to join theWTO membership was considered important for Cambodia's development aninto the world trading system. They were very impressed with the political willand its tremendous efforts in designing its path to accession to the WTO ansystem of laws consistent with WTO rules. Appreciating the efforts already uCambodia to achieve compliance with WTO rules and principles, they noted thawas needed in this regard. Members pledged to work constructively with accomplishing this task, and several Members would offer tech

te s. Some Members referred to Camboconsider this a relevant factor in establishing Cambodia's terms of accession.

C. Specific concerns from WTO members

Throughout Working Party meetings and bilateral sessionsnumerous and wide ranging. However, some common themes emerged mostly surrounding the five basic principles of the General Agreement on Tariffs and Trade (GAWTO, namely: (1) transparency and predictability, (2) market openindiscrimination, and (4) preferential treatment for developing countries.

Transparency and predictability: Members stressed the need for Cambodia toWTO's transparewith respect to uniform application of its trade regime and independent judSeveral members have inquired whether Cambodia would consider postingJournal on the internet to improve access to new laws and regulations, and wsteps could Cambodia take to better ensure that all new regulations are properlythe Official Journal.

As a WTO member, Cambodia has committed itself to provide at least 30 dayson all proposed new measures affecting trade in goods, services or the intellectual property. Further, no such measure will become effective until it hathe Official Journal. The body of all current laws, regulations and decreeadministrative and judicial rulings, relating to trade should be available on an off

Judicial enforcement: Some Members remained concerned on the status of t

33

ve requested and remedies, ; and criminal rs have urged

ude parallel provisions on IPR in its draft Civil Code, as this will

is one of the nd sectors of owing when Cambodia’s

quested for a he legislations to reflect the need to concentrate in the early phase of

accession. Others have stressed that most of the legislation slated in the Plan be adopted by an draft laws

a to date and sparency and

special trade areas, TRIPS, the custom code, the new custom tariff, TBT/SPS, and import licensing. Other Members have provided detailed

mbodia in its itical area of

n periods for timetable for

may consider ary technical

option process of various key legislations and regulations as committed under the National Legislation Action

bodia committing to using the appropriate international standards (i.e. Codex Alimentarius) during the transitional period

s requested to ndards.

l commitment are translated that purpose

lists over a two years period tasks by ministry and government agency, topic, WTO Working Party Report reference, deadline and need for specific technical assistance. The commitments and TA needs list covers transparency of regulation; accreditation for educational institutions and courses; draft competition policy; IPR (TRIPS border measures, patents law, plant variety protection, GIs); customs valuation; anti-smuggling equipment; banking, financial, insurance services regulation/legislation; SPS/Codex; TBT (enquiry point, standards, conformity assessment); immigration (Mode 4 horizontal commitments on temporary residence);

More specifically with regards to the TRIPS Agreement, some Members haCambodia to explain how it intended to provide for civil judicial procedures provisional measures; administrative procedures and remedies; border measuresprocedures to implement the enforcement provisions under the Agreement. OtheCambodia not to inclundermine its IPR regime.

Legislative development: Bringing the legislation in compliance with WTO rulesmost challenging tasks that Cambodia must achieve. It touches numerous areas athe economy. Some Members have requested Cambodia for a roadmap shCambodia envisaged the remaining legislation will be enacted as per commitment under the National Legislation Implementation Plan. Others have rereprioritization of t

the time of accession while a few others even insisted on reviewing Cambodiprior to their adoption.

Some Members expressed their appreciation for the laws supplied by Cambodilook forward to receiving additional legislation, in particular in the areas of trandue process, trading rights, free or

comments and questions on the various IPR drafts, and hoped that these help Caefforts to establish a TRIPS-consistent regime in IPR, in particular in the crCopyrights, Patents, and Industrial Designs.

Transition periods: Some Members were prepared to allow Cambodia transitioimplementing some obligations, although they insisted on the specificity of the these transition periods (end-point and milestones along the way). Cambodia the flexibility of the implementation of its legislation and ask for the necessassistance either bilaterally or multilaterally in order to speed up the ad

Plan. Some Members inquired the possibility of Cam

before which the provisions of the SPS and TBT Agreements are applied. Othersee an outline of the steps Cambodia plans to take to adopt these international sta

SECTION 5: STEPS TO IMPLEMENT WTO COMMITMENTS

The post WTO accession challenges are huge but not insurmountable. Nationaand ownership aside, Cambodia has to implement 29 legal commitments which into 98 separate tasks for the next few years. The Council of Ministers has for prepared and adopted a Work Action Plan to implement the accession commitments. The plan

34

equirements; law (TRIMs

ansport (implementing regulations for civil 31

h, notably, its n update and TIS would be and particular revised DTIS

terms of new eveloped and an, notably in

he horizontal onses. At the cross sectoral trengthen the tion between el the project

ry’s supply capacity in the identified export potential sectors in order to ent

t support and ings through

ensive policy ns for local

political deadlock in the post-election period and the delays in forming the government, acting upon the recommendations of the World Bank’s Investment Climate Report, a Special Inter-Ministerial Task Force on Trade Facilitation and Investment Climate was establish to address the most urgent impediments in trade facilitation. On 26 July 2004, the government established a Commission on Private Sector Development consisting of the following working groups:

architectural, construction, engineering services regulation to meet GATS rpharmaceutical import regulations; road transport regulations; investment compliance, notification of subsidies ; air tr)aviation, regulations for marketing air services).

Over the next several years Cambodia will be facing many changes among whicaccession to the WTO. The Government intents on undertaking a review, aadjustment of the DTIS which was prepared since 2001. The revision of the Dfacilitated by the findings of the many trade related initiatives mentioned above the IF “Capacity Building for Pro-Poor Trade Reforms” project (Phase I).32 The will identify and illustrate the reforms undertaken by the national authorities inlegislations and institutional changes, and will reveal the new partnerships dreport on the current status of integration of trade in the national development plthe annual NPRS updates. The IF project’s Phase II is designed to produce important outcomes both at tlevel (sustainable capacity building) and at the vertical level (supply side) resphorizontal level the project will develop the capacity of relevant actors on issues, involving local trade support institutions and ministries, in order to strade support network established under Phase I and further facilitate interacGovernment, trade support bodies and the business sector. At the vertical levwill enhance the countexpand Cambodia’s exports and present concrete and visible examples of employmgeneration through trade development. This will be realized by providing directechnical advice to pre-identified export-ready enterprises and disseminate findtheir business associations.

Moreover, Cambodia has used its WTO membership to implement a comprehreform agenda aimed at attracting FDI and creating favourable conditioinvestors.33 Despite the

31 See Annex 3 for the full Action Plan 32 The project which used $500,000 of fund earmarked by Japan to the IF UN Trust Fund, and UNDP funds,

aims at pursuing three priority objectives: (i) to promote a broader national constituency on trade and poverty through a strategic and information-based partnership development approach; (ii) to enhance opportunities for effective allocation of ODA towards trade, through the strengthening of supply side responses in three product sectors namely: diversified agriculture and agro business, fresh water fisheries, and handicraft; (iii) to further elaborating on the links between poverty reduction/ human development and trade expansion.

33 The reform agenda includes specifically: (i) promoting business membership organization and strengthening its advocacy capacity; (ii) reducing policy-based impediments to efficient transactions, particularly in such areas as trade facilitation and business transactions; (iii) rationalizing roles and responsibility of government agencies involved in the control of exportation and importation by introducing single window with flat fee; (iv) implementing customs streamlining programs; (v) introducing process automation; (vi) reducing entry barriers, such as unnecessary licenses and the high cost of registering business, and (vii) taking a supply chain approach to removing bottlenecks on a product basis.

35

¶ ticipation in Infrastructure

¶ rking Group on Trade Facilitation chaired by the Senior Minister, Minister of

¶ on Small and Medium Enterprise chaired by the Minister of

will require ambodia' has number of s. Cambodia

the “behind-the-border” institutional and regulatory constraints in order to maximize the developmental benefits of trade and investment liberalization. These "behind-the-border"

NCE

t of the IF in acity building

d in line with international

ssistance to LDCs, the most important ones were: The Millennium Development Goals (September, 2000)34, the Quad countries regarding WTO Rules and their implementations (May 2001)35, the WTO Fourth Ministerial Declaration in Doha, Qatar (November 2001)36, the Financing for Development (FfD) Conference (March, 2002)37, and possibly more at the next World Summit for Sustainable Development in Johannesburg, South Africa in August 200238.

The Working Group on Investment Climate and Private Par(PPI) chaired by the Senior Minister, Minister of Economy and Finance; The WoCommerce; The Working Group Industry, Mine and Energy.

These working groups would work at leveraging the benefits of market accessCambodia to undertake substantial reforms, which can go far beyond what Ccommitted during its negotiations. Cambodian domestic producers face aimpediments beyond tariffs that tend to undermine the benefits of market acceswill have to move to develop and implement coherent complementary policies to tackle

issues also feature prominently on the Doha Development Agenda.

SECTION 6: OVERVIEW OF TRADE RELATED TECHNICAL ASSISTA

Cambodia’s success story in the WTO was in large part attributed to the advenCambodia. The process of accession represents a great opportunity for local capin this respect. Developed nations have extended their support to Cambbasis in many specific areas where immediate compliance to WTO rules is needetheir pledges. The last four years have witnessed the convening of a series of conferences which have a direct bearing on the provisions of technical a

odia on a fast-track

34 The goal on the development of a Global Partnership for Development (Goal No. 8) points to the establishment of an inclusive and equitable globalization, which can be best achieved through a “human development paradigm”. The Millennium Declaration includes critical considerations on further developing an open, rule-based, predictable, non-discriminatory trading system, and a commitment to good governance, development, and poverty reduction — both nationally and internationally.

35 The QUAD statement reiterated the major four donors commitments to "make full use of the flexibility foreseen under the WTO Agreements for LDCs, like the granting of transitional periods for the full implementation of specific rules. While the goal should be the adoption of WTO provisions upon accession, these transitional periods may be applied to the acceding LDCs upon request and presentation of a detailed plan of action for assuring compliance with WTO rules, to be included in the protocol of accession. The implementation of the action plans could be supported by technical assistance."

36 The Doha Ministerial Declaration stressed that al cooperation and capacity building are core elements of the development dimension of the multilateral trading system. It provides the mandate and the resources to assist countries to mainstream trade into national plans for economic development and strategies for poverty reduction."

37 The FfD provided additional opportunities in addressing the capacity needs of LDCs in relation to trade and poverty reduction. It has moved the debate toward a new resource framework which goes beyond ODA and included, among others, mobilization of domestic resources, revenue generated by trade and FDI.

38 A solid program of action was firmed up after new resources were secured at Monterrey, following the European and American decisions to step up development aid.

"technic

36

international NCTAD, the nts of WTO an resource

both categories of public sector and va

TO accession to play a very

important role in the process of policy adjustmsolid noteworthy:

ents is very presented by en active part O and other

zations. Specialist knowledge and expertise for each specific WTO Ag specialists on

PS, Services,

ve continuity ectuating the

an acceding country and WTO members. In this respect an essential ost accession k of contacts

r the private e in the implementation of the

nd trade as a r lectures in te resolutions cial reference

n example for its effectiveness and good achievements in comparison to other countries that applied the same methodology and process. The strengths of the IF in Cambodia are: (i) a focused and comprehensive diagnostic analyses and a clear policy direction; (ii) strong local ownership and pro-active attitude – Cambodia has no “lead donor”-, in particular on the stakeholders dialogue; (iii) a strong commitment to follow up on the mobilization of the necessary funding to implement the technical assistance action plan; and (iv) the ability to mainstream the trade policy in the national poverty reduction and growth development strategy.

Cambodia has made active use of technical assistance and consultancies fromorganizations of the Integrated Framework (IF) initiative (IMF, ITC, UNDP, UWorld Bank, and WTO), other specialized UN agencies, and from governmemember countries in the preparation of required documentation, and humdevelopment. The target beneficiaries encompassed pri te sector decision-makers and the civil society stakeholders:

1. Capacity building for policy makers and trade negotiators: Because Wis a negotiation process where the public sector decision-makers will be asked

ents, Cambodia saw the need to pull together a and competent trade negotiating team. Two aspects of capacity building are

- Full knowledge of the rules: Detailed knowledge of the agreemimportant for effective negotiations with WTO members that are rehighly qualified specialists. As such the trade negotiating team have takin trade policy and other WTO-related courses organized by WTmultilateral organi

reement were developed, with particular attention paid to training of different WTO Agreements (TRIPs, TRIMS, Agriculture, TBT, and Sand custom valuation).

- Continuity of the trade negotiating team: Ensuring administratiand consistency in the negotiation process is very important for effactivities of both Cambodia ashaving and maintaining a stable and appropriately qualified team waselement to continue the momentum in the accession as well as in pimplementation process. Moreover Cambodia has maintained a networwith negotiators from other countries.

2. Capacity building for private sector operators: Capacity building fosector is a must as it is them who will directly participatagreements. They will be the ones who will change investment, production aresult of the new situation. For a start Cambodia has conducted courses oinstitutions of higher education on WTO legal principles, agreements and dispufollowed by specific seminars and courses. Preparation and distribution of spematerials on these issues as supporting tools were also undertaken.

The IF in Cambodia is considered by many as a

37

r inability of trade related not prevented

bilizing resources from these donors under the rubric of the larger trade mainstreaming theme.

* * * * *

The weaknesses of the Cambodian IF is more perceived from the willingness osome donors – aside from the six core agencies - to label and place theiractivities under the purview of IF umbrella. Nevertheless, this shortcoming has Cambodia from mo

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________. 2003o. “Review and update of Trade-Related Intellectual Property Rights (TRIPS) compliance.” July 15.

________. 2003p. “Press Release: Progress of Bilateral Market Access Negotiations for the Accession of the Kingdomof Cambodia to the World Trade Organization (WTO).” Phnom Penh, July 15.

________. 2003q. “Background Note Prepared by the Cambodian Delegation to the Fifth WTO Ministerial Conferencein Cancun, Mexico on the Occasion of Cambodia’s Accession to the WTO.” September 11.

OECD, 2001. “The DAC Guidelines – Strengthening Trade Capacity for Development.” Paris.

Oxfam, 2002. “Rigged Rules and Double Standards: Make Trade Fair.” London.

hnom Penh.

Cham, Prasidh. 2002. “Opening Remarks at the 2nd Working Party Meeting on Cambodia's Accession toGeneva, February 14.

________. 2003a. “Opening Remarks at the 4th Working Party Meeting on Cambodia's AccessioGeneva, April 16.

________. 2003b. “Opening Remarks at the Signing Ceremony of Bilateral Markccession with Japan and the Republic of Korea.” Phnom Penh, July 15.

________. 2003c. “Concluding Remarks at the Fifth Working Party Meet

________. 2003d. “Remarks at the Accession of Cambodia to the WTO.” Cancun, September 11.

________. 2004. “Cambodia and the World Trade Organization.” Phnom Penh, August.

FIAS (Foreign Investment Advisory Service). 2000. Report on the Review of the Law on Investm

McCulloch, N., L. A. Winters and X. Ciero. 2001. “Trade Liberalization and Poverty: A Handboo

Ministry of Commerce, CLRDC (Cambodian Legal Resources Development Center), and FLE (FacultyEconomics). 2001. “Globalization Conference: Business and Law Perspectives Conference Proceedings

Ministry of Comxplanatory Notes Prepared for the Plenary Session of the National Assembly.” Phnom Penh July

________. 2002a. “Cambodia: Integration and CFramework for Trade-Related Technical Assistance to Least-Developed Countries (“IF”), Phnom Pen<http://www.moc.gov.kh.>

________ . 2002b. “National workshop on “How to Develop Garment Exports without Quotas.” Phvailable also on <http://www.moc.gov.kh.>

Ministry of Commerce/WTO Task Force. 2001a. “Minutes of the First Working Party Meeting on ambodia to the World Trade Organization.” May 22.

_____TO Accession.” February 12.

________. 2002c. “Memorandum UNCTAD M

________. 2002d. “Preparation for Service Negotiation, 3rd Working Party Meeting.” Geneva,

________. 2002e. “Mission Report: Road Map to Cancun. Cambodia 3rd Working Party for WTONovember 23.

________. 2003f. “Summary Reports of Bilateral Negotiatccession of Cambodia to the WTO.” Geneva, April 14-17.

________. 2003g. “Minutes of meeting between Minister Cham Prasidh and WTO DG Supachai PanitchpGenev

________. 2003h. “Minutes of meeting between Minister Cham Prasidhrussels.” April 15.

________. 2003k. “Minutes of 4th Working Party Meeting.” April 16.

________. 2003l. “Technical Memorandum for the Council of Ministers’ meeting.” May 16.

________. 2003m. “Recommendations of the Prime Minister for the outcay 16.

________. 2003n. “Minutes of the Meeting of the Informal Working

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________. 2003. “Cambodia’s Accession to the WTO: How the law of the jungle is applied to one of the world’sp

nomic Development Plan II (2001-2005).” Phnom Penh.

m Penh, February

orkshop of Women27. Available also on <http://www.moc.gov.kh.>

at the Ministryof Foreign Aff

odia." Presented at C 5.

ceptible Trends" Presented at the Globalization C c.com.kh.>

the 10th

-China Countries and 6-29.

SEAN Task ForceM

es and Commitments for Cambodia's Accession to the WTO: ExplanatoryNotes Prepared for the Plenary Session of the National Assembly.” July 19.

k. "Symposium on Globalization.” Presented at the Royal Academy of Cambodia, Phnom Penh, July 12.

presented at the

the WTO, Geneva,

_. 2003a. “The Integrated Framework and WTO Accession: Challenges and Opportunities for PovertyR hnom Penh, May 1-3.

on <http://www.moc.gov.kh.>

stment Issues.” June 3-4. Available also on <http://www.moc.gov.kh.>

ormal Working Party Meeting on Cambodia's Accession to the WTO, G

ter for International LegalStudies, Salzbur

rket Access for

eparate Customs, Penghu, Kinmen and Matsu, February 14.

________. 2003b. Technical notes on Audiovisual services, February 14.

________. 2003c. Notes on Questions linked to Agriculture policies, February 18.

________. 2003d. Internal memo re explanations on services with Panama, March 27.

VanGrasstek. 2000. “Laws and Policies of the United States of America Concerning the Accession of Cambodia to the World Trade Organization.” UNCTAD, February 8.

World Bank. 2001. Global Economic Prospects and the Developing Countries: Making Trade Work for the World’sPoor, (Washington DC)

oorest countries.”

RGC (Royal Government of Cambodia). 2001. “Socio-Eco

________. 2003. “National Poverty Reduction Strategy.” Phnom Penh.

Sok, Siphana 2001a. "Foreign Investment in Cambodia." Background Paper presented at the Symposium on Investment for the Asean New Member Countries, Tokyo, February 15.

________. 2001b. “National Workshop on Trade Facilitation.” Opening Remarks, UN-ESCAP Phno26-27.

________. 2001c. "Globalization and Micro & Small Enterprises Development." Presented at the Wand Promoting MSE Development, Phnom Penh, February 26-

________. 2001d. “Cambodia Market Access Strategy.” Presented to the Cambodian Diplomatic Corps airs and International Cooperation, Phnom Penh, March 15.

Sok Siphana. 2001e. "Roundtable Discussion on Development and Poverty Reduction in Cambambodian Institute for Peace and Cooperation and the World Bank Institute, Phnom Penh, April

________. 2001f. "Globalization and Cambodia: History and Peronference: Business and Law Perspectives, Phnom Penh, June 27-28. Available also on <http://www.clrd

________. 2001g. "Mainstreaming Trade Strategy for Poverty Alleviation in Cambodia" Presented atConference of the Forum on Cambodia, Laos and Vietnam, Vientiane, June 19-21.

________. 2001h. Concluding Remarks at the Subregional Workshop on Facilitating Trade in Indothe 2nd Trade Facilitation Working Group, Phnom Penh, June 2

________. 2001i. "Development and Challenges for Cambodia in ICT." Keynote Speech at the 8th eAeeting, Siem Reap, July 6.

________. 2001j. “Opportunities, Challeng

________. 2001

________. 2001l. "Protection of Intellectual Property Rights: Global Trends & Marketplace." PaperFaculty of Laws and Economics, Phnom Penh, August 1.

________. 2002. Opening Statement at the 3rd Working Party Meeting on Cambodia's Accession toNovember 14.

_______eduction.” Paper presented at the World Bank Senior Policy Seminar for Cambodia and Lao PDR, P

Available also

________. 2003b. “WTO Accession in Cambodia: Experiences in Dealing with Services and InvePresented at the Readiness for WTO Accession Conference, Hanoi,

________. 2003c. Opening Statement at the Infeneva, June 26.

Sarin, and Siphana Sok. 1998. “Legal System of Cambodia.” CLRDC, Phnom Penh, Ceng.

UNCTAD (United Nations Conference on Trade and Development). 2001. Duty and Quota Free MaLDCs: An Analysis of Quad Initiatives, (London and Geneva).

________. 2003a. Internal memo re explanations on services with Australia, Canada, EC, Japan, STerritory of Taiwan

39

________. 2003. “Towards A Private Sector -Led Growth Strategy for Cambodia - Volume 1: Value Chain Analysis.”W

aft Copyright andard, in Particular, to its compatibility with the Agreement on

/ACC/ 7/Rev. 1, Geneva,November 19.

inisterial 2001: Ministerial declaration.” Adopted on 14 November 2001

ry Developmenttrategies - The Perspective of LDCs", Geneva.

M/3/Rev.1/Add.1, June

e Kingdom of Cambodia.” W

_______. 2002c. “Factual Summary of Points Raised.” October 24.

0.

EC/KHM/4/Rev.1,

Party on Cambodia’s

EC/KHM/4/Rev.2,uly 16.

e Working Party on the Accession of Cambodia.” WT/ACC/KHM/21, Geneva, August15.

________. 2003. “Report of the Working Party on the Accession of Cambodia, Annex A (Cambodia's offer on tariffs on goods).” WT/ACC/SPEC/KHM/1/Rev.3.

________. 2003g. “Report of the Working Party on the Accession of Cambodia, Annex B (Cambodia's commitments on services).” WT/ACC/SPEC/KHM/2/Rev.3.

ashington, DC.

WIPO (World Intellectual Property Organization). 2001. “Comments of the Secretariat on the DrRelated Rights Law of the Kingdom of Cambodia, with regTrade-Related Aspects of Intellectual Property Rights, September 8.

WTO (World Trade Organization), 1999. "Technical Note on the Accession Process.” WT

________. 2001a. “Doha WTO M

________. 2001b. Seminar Proceeding on "The Policy-Relevance of Mainstreaming Trade Into CountS

________. 2002a. “Domestic Support and Export Subsidies in Agriculture.” WT/ACC/SPEC/KH13.

________. 2002b. “Revised Checklist of TRIPS Requirements and Implementation by thT/ACC/KHM/7/Rev.1, June 13.

_

________. 2002d. “WTO General Council on “Accession of Least Developed Countries.” December 1

________. 2003a. “Draft Report of the Working Party on the Accession of Cambodia.” WT/ACC/SPApril 30.

________. 2003b. “WTO Members’ Questions on Working Party Report during Informal WorkingAccession to WTO.” Geneva, June 26.

________. 2003c. “Draft Report of the Working Party on the Accession of Cambodia.” WT/ACC/SPJ

________. 2003d. “Accession of Cambodia: Memorandum on the Foreign Trade Regime.” WT/ACC/KHM/2 (1999), WT/ACC/KHM/3-17 (2001, 2002), WT/ACC/SPEC/KHM/4/Rev.1 (2003), Geneva.

________. 2003e. “Report of th

40

ANNEX 1: MATRIX OF COMPREHENSIVE TRADE RELATED INITIATIVES

Organization Project Title o Preventing Poverty and Empowering Female G

Affected by the Changing International Trade Environmo Financial Sector/Commercial Laws Componento (planned) SPS Capacity Building (Regional Prog

Lao PDR, Vietnam, Thailand) o Cambodia Australia Technical Assistance Facility (CATo Improving the Marketing System of Maize and Soybeans in Ca

Aust o International Standards and Technical Regulations (throo APEC/WTO Capacity Building InCanada -

CI o Legislation on Commercialo Technical Cooperation Action Plan (TCAP) o WTO accession - Telecom Reference Paper o Multilateral Trade Assistance Pro EC/ASEAN co-operation programme on Int

EC

o EC/ASEAN co-operation programme on Product Stando Geographicalo Drafting of Law on Geographical Indicationo Cambodian Rubber Certifo TrainForTrade project - Training on Multilatera

(through UNCTAD)o Drafting of Sanitary and Phytosanitary (SPS) Measureso Drafting of Law on Rule of Origino Secondment of long term trade expert. o Expoo Private Sector Donor coordinationo Export Processing and Trade working group - addresso Customs and Excise Department Support o Poverty Reduction Growth Facility (PRGF) 2003-200

assistanceo World Tr@de Neto IF Projects - Silk (part of the Capacity Building

Reforms Programme).o Export Led Poverty Reduction Prog

building and export promotion for production ofo Advisors for To Sihanoukville Growth Corridor Ao Feasibility stuo Study on the Improve

Quality Control of Rice in CambodiaTrade Promotion and Trade-related assis

arment Workersent

ADB

ramme - Cambodia,

AF)

Australia

mbodiaria ugh UNIDO)

itiativeDA Court and Commercial Arbitration Rules

DFID

ojectellectual Property Rights

ardsIndication of Origin Project

of Originication and Commercialization

l Trade Negotiations"

.

France

Germanyrt Processing and Trade working group coordination IFC

ing bottlenecksIMF

6 - trade-related

for Pre-Poor TradeITC

ramme - Entrepreneur capacity silk handicraft.

rade and Industrial Promotion.ssistance.

Japan - JICA

dy on the Establishments of a Paddy Marketment of Marketing System and Post-Harvest

MPDF o tanceo Financial facilities for trade and investments & Agreement on

Investment Protection Netherlands

o Technical Cooperation Action Plan (TCAP) o Phytosanitary project o Legal Metrology o WTO Customs Valuation

New Zealand

o (planned) Agricultural diversification/technology

41

Organization Project Title o

2Singapore o Cambodia-Singapore Training Centre - Trade Training PrSwitzer o Support to Trade Promo

of Cambodia, Laos and Vietnamo Koh Kong Industrial Estate o WTO Accession o TrainForTrade project - Training on Mo E-business: Strengthening the Capac

and Small and Medium Sized Enterprises (SMEs)o Capacity Building for Pre-Poor Trade Reformso E-Trade Bridge Strategy o Investment Guidelines and Capacity Developmo Formulation of the Private Financing of Infrastructure Fro Technical Cooperation Action Plan (TCAP)o Strengthening capacities of developing countries to ma

globalization through effective integsystem (Phase I and II)

o Development of Enabling Policies in Trade and Investmsector.

o Trade Policy Course and Regional SeminarsUNIDO o Industrial Standards and Technical RegulatiUS - USAI Support to the Integrated Fram

Norway International Standards and Technical Regulations - phase 1 and phase

ogramland tion and Export Development in the sub-region

Thailand

ultilateral Trade Negotiations UNCTAD

ity of Trade Support Institutions

ent for Cambodiaamework

UNDP

nageration into the multilateral trading

ent in the IT

UNESCAP

onsD o ework in Cambodia (SME component)

o Support to RCG's Private Sector Growth Strategy o Streamlining Trade Facilitation

WB

o Public-Private Infrastructure Advisory Facility (PPIAF)WB/IDA o Private Sector Investment Credit (loan

42

ANNEX 2: DESCRIPTION OF SELECTED TRADE RELATED INITIATIVES

aimed at icipation in the O Secretariat

r Cambodia’sited from the

om the IF team.

dia has benefited every year from both the WTO three-week cifically for

ovideeminate

greements.officials and private sector participants have regularly participated in specialized

isions, such astion, market access, trade and environment, TRIPS, and agriculture (mandated

bodia in

h support fromoC has established a "WTO Reference Centre" with modern data

processing facilities and better communication and information technology, including Internet

MF, ITC, OECD, UNCTAD, nce/workshop

d investment.in traderules

ms administration.

g training anddispatched on a

ission to the goods offer,

services offer, technical checklists (agriculture, TBT, SPS, and TRIPS), and various plans of action for all the WTO Working Party meetings.

Translation of Trade Negotiations Materials: The project involves the translation and publications in Khmer of 3 key documents: "Business Guide to the World Trading System"published by the ITC and the Commonwealth Secretariat, the "Tools for Multilateral Trade Negotiations on Agriculture," and the "Tools for Multilateral Trade Negotiations on Trade in Services." published by the UNCTAD’s Commercial Diplomacy Programme. The project was

WTO

In general the technical assistance provided to Cambodia by the WTO as beenhuman and institutional capacity-building for better understanding of and partmultilateral trading system. More specifically in the area of accession, the WThas been very efficient and proactive in the provision of technical support foWorking Party meetings. In the WTO accession process, Cambodia has benefadvice of the WTO trade policy review team and the dynamic support fr

Trade Policy Courses: CamboShort Trade Policy Course and the three month Trade Policy Courses speparticipants from LDCs in Geneva.

National Seminars: National seminars have also been organized by WTO to prCambodian officials an overview of the multilateral trading system and to dissinformation on the functioning, basic rules and principles of the WTO and its ACambodianregional seminars focusing in depth on specific WTO Agreements and provcustoms valuanegotiations).

Technical Missions: WTO has provided several technical missions to assist CamWTO accession.

Establishing modern data processing facilities ("WTO Reference Centre"): Witthe WTO Secretariat, the M

links. The Center was renovated and expanded to house extensive trade specific references obtained from various sources including the ADB, ESCAP, IUNDP, World Bank, and WTO materials. Other training materials and confereproceedings are also available.

United Nations Conference on Trade and Development (UNCTAD)

UNCTAD had been quite active in the provision of policy analysis on trade anTrade-related technical assistance provided so far includes training and supportnegotiations and implementation of commitments, WTO accessions advice andconsistency, ports management and custo

WTO Accession: Cambodia considers UNCTAD as the lead agency in providinsupport in trade negotiations and WTO accessions since 1997. Missions wereneed basis to assist the Government finalize the WTO documents prior to submWorking Party. Advice given covers the entire range from WTO replies, tariff of

43

quite timely and useful as the Cambodian delegation prepared for the third rnegotiation. Moreover a series of training workshops were held for key stakegovernment institutions involorganizations including academia.

Study Tours: In 2000-2001 UNCTAD has sponsored several study tours and tCambodian officials to in Geneva. Other activities include the launch the World InvestmReport in Cambodia, and participation a Seminar on Traditional Knowledge (I

Trainfortrade programme: The Trainfortrade programme, which started in 200strengthening training capacities in developing countries, particularly LDCs, ininternational trade and trade related services. The programme strategy consistspartnerships with other training institutions in order to enable a permanent exchinformation, courses, and teachers; developing, producing and updating high-qpackages that meet the needs of persons involved in international trade, and eboth state and private sectors; organizing national and regional seminars and tin the instituan international trade institute in partnership with the private sector and acadewas secured from the French Government to cover a four year program costs foand Lao PDR.

International Chamber of Cto Cambodia for the use of potential foreign investors.

EUROPEAN COMMISSION

Trade Sector Development: The Country Strategy Paper (CSP) for Cambodia hfinalized and covers the period 2005-2007. In addition, the EC is currently implerolling 3-year Indicative National Programme (2002-2004) with a contributionPriority areas for EU assistance are: institutional caprocedures and other procedures to make full use of the EBA initiative.

Other assistance is also being provided, inMoC and other authorities involved in international trade. The Institutional SupProgramme provides TA to the MoC, in addition to other tasks, assess the needEC support to assist Cambodia to enhance its trade capacity.

Support for Post WTO accession: Another major specific objective of thto assist Cambodia in post accession to the

that would ato achieve further economic co-operation by upgrading the ASEAN interights systems, and (ii) in the EC/ASEAN standards programme that aims at th

ound ofholders like

ved in the WTO, private sector participants, and civil society

raining for 12ent

P) in India.

4, is aimed at the field ofof developingange of

uality trainingxecutives fromraining courses

tional members of the network. The project also aims at helping MoC establish mia. Funding

r Cambodia

UNCTAD-ICC Investment Guides Project for Cambodia: UNCTAD in partnership with the ommerce (ICC) have prepared and launched an investment guide

as beenmenting a

of € 2 million.pacity building, trade facilitation/customs

particular, for human resource development in the portfor additional

e EU intervention is WTO.

IPR/SPS/TBT: At the regional level the EC has provided an additional € 1 million for actionsllow Cambodia’s integration: (i) into the EC/ASEAN IPR programme that aims

llectual propertye development

of technical regulations and standards, conformity assessment procedures and quality structures and practices compatible with EU ones.

SINGAPORE

As part of the Initiatives for ASEAN Integration (IAI) - Trade Training Program, the Government of Singapore has been conducting and continues to conduct a series of trainings

44

45

cials in the area of trade development, trade policy analysis, export promotion, and trade facilitation.

vided by the Government of Thailand to Cambodia during its preparation for the first and second Working Party meetings.

for Cambodian key economic offi

THAILAND

Trade negotiations and other WTO accession related capacity building were pro

Wor

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m o

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2004

46

47

WT

O W

ork

Pro

gram

,200

4-

20

Che

cklis

t of t

asks

05

Top

icW

TO

Ref

eren

ceT

ask

Dea

dlin

eT

echn

ical

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

OF

FIC

E O

F C

OU

NC

IL O

F M

INIS

TE

RS

Tra

nsp

aren

cyP

Rep

or

par

a 21

639,

21740

nts

of

Off

icia

l Jo

urn

al o

n

the

Go

vern

men

tw

ebsi

te a

nd

kee

p

them

cu

rren

t

nee

ded

.M

ore

TA

N

eed

ed

Wt

Po

stco

nte

Asa

p

TA

48

39 I

n re

spon

se,

the

repr

esen

tativ

e of

Cam

bodi

a st

ated

tha

tC

ambo

dia

inte

nded

to

prov

ide

a re

ason

able

per

iod,

i.e

. no

les

s th

an 3

0 da

ys,

for

com

men

t to

the

app

ropr

iate

aut

hori

ties

befo

re m

easu

res

pert

aini

ng to

or

affe

ctin

g tr

ade

ingo

ods,

serv

ices

and

TR

IPS

are

adop

ted,

exc

ept

for

thos

e re

gula

tions

and

oth

er m

easu

res

invo

lvin

gna

tiona

l em

erge

ncy

or s

ecur

ity,

or f

or w

hich

the

pub

licat

ion

wou

ld i

mpe

de l

aw e

nfor

cem

ent.

The

pub

licat

ion

of s

uch

regu

latio

ns a

nd o

ther

mea

sure

s w

ould

inc

lude

the

eff

ectiv

e da

te o

f th

ese

mea

sure

s an

d, w

here

appr

opri

ate

or p

ossi

ble,

lis

t th

e pr

oduc

ts a

nd s

ervi

ces

affe

cted

by t

he p

artic

ular

mea

sure

, ide

ntif

ied

byap

prop

riat

e ta

riff

lin

e an

d cl

assi

fica

tion.

He

adde

d th

at C

ambo

dia

wou

ldpo

stth

e co

nten

ts o

f cu

rren

t and

past

edi

tions

of

the

Off

icia

l Jou

rnal

on

the

gove

rnm

ent w

ebsi

te a

nd k

eep

them

cur

rent

.

40 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

that

fro

m t

he d

ate

of a

cces

sion

all

law

s,re

gula

tions

, dec

rees

, jud

icia

l de

cisi

ons

and

adm

inis

trat

ive

rulin

gsof

gene

ral

appl

icat

ion

rela

ted

to tr

ade

wou

ldbe

pub

lishe

d in

a m

anne

r th

at f

ulfi

lsW

TO

req

uire

men

ts.

As

such

, no

law

or

regu

latio

n re

late

d to

inte

rnat

iona

ltra

de w

ould

beco

me

effe

ctiv

e pr

ior

to s

uch

publ

icat

ion

in th

e O

ffic

ial J

ourn

al.

He

furt

her

stat

ed th

at a

ll la

ws

whi

ch w

ere

amen

ded

to c

ompl

y w

ith th

eW

TO

Agr

eem

ents

con

tain

edpr

ovis

ions

whi

ch r

equi

re s

uch

publ

icat

ion.

Dec

rees

,sub

-D

ecre

es a

nd P

raka

s af

fect

ing

inte

rnat

iona

ltr

ade

wou

ld b

e pu

blis

hed

in t

he O

ffic

ial

Jour

nal.

Cam

bodi

a’s

Con

stitu

tion

and

the

law

s cu

rren

tly i

n pl

ace

or l

iste

d in

the

Atta

chm

ent

assl

ated

for

nea

r-te

rm e

nact

men

t w

ould

im

plem

ent

fully

Art

icle

X o

f th

e G

AT

T 1

994

and

the

othe

r tr

ansp

aren

cy r

equi

rem

ents

in

WT

OA

gree

men

ts r

equi

ring

not

ific

atio

nan

d

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Tra

nsp

aren

cy

WP

Rep

ort

7d

esig

nat

e O

ffic

ial

ebs

he

fn

set

c.ad

e

1 Ja

nu

ary

par

a21

Est

ablis

h o

r

Jou

rnal

or

wit

ed

edic

ated

tot

pu

blic

atio

no

reg

ula

tio

affe

ctin

gtr

2004

Ed

uca

tio

n

Ser

vice

s sc

hed

edu

cati

on

alse

rvic

es

Est

ain

dep

enac

cred

itin

gp

ro

TA

e

49

ule

: 41

blis

h den

tce

ss

Asa

pn

eded

publ

icat

ion.

H

e fu

rthe

r co

nfir

med

tha

t by

1 J

anua

ry 2

004,

Cam

bodi

aw

ould

est

ablis

hor

des

igna

te a

nof

fici

al j

ourn

al o

r w

ebsi

te, p

ublis

hed

orup

date

d on

a r

egul

ar b

asis

and

rea

dily

avai

labl

e to

WT

O M

embe

rs,

indi

vidu

als

and

ente

rpri

ses,

dedi

cate

dto

the

pub

licat

ion

of a

ll re

gula

tions

and

othe

r m

easu

res

pert

aini

ng t

o or

aff

ectin

g tr

ade

in g

oods

, se

rvic

es,

and

TR

IPS.

The

Wor

king

Par

ty to

okno

te o

f th

ese

com

mitm

ents

.

41 V.

ED

UC

AT

ION

AL

SER

VIC

ES

3.H

ighe

r ed

ucat

ion

serv

ices

(CPC

923

)4.

Adu

lt ed

ucat

ion

(CPC

924

)5.

Oth

er e

duca

tion

serv

ices

(CPC

929

)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd e

xcep

t as

indi

cate

d in

the

hori

zont

alse

ctio

n

Cam

bodi

aw

ill s

eek

to e

stab

lish

anin

depe

nden

t nat

iona

lacc

redi

ting

proc

ess

for

mar

ketp

urpo

ses

ined

ucat

ion

and

prof

essi

onal

serv

ices

whi

chis

in k

eepi

ng w

ith g

loba

lpr

actic

e.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

MIN

IST

RY

OF

CO

MM

ER

CE

Inte

rmin

iste

ria

l mac

hin

ery

WP

Rep

ort

P

ara

3942

Re-

def

ine

the

Inte

r-M

inis

teri

alC

oo

rdin

atin

gC

om

mit

tee

Asa

pN

ot

nee

ded

Co

mm

erci

alC

ou

rtR

epo

rp

ara.

3543

com

mer

cial

co

urt

Jun

e 20

05

No

TA

nee

ded

. W

Pt

Pas

s la

wes

tab

lish

ing

th

e

50

Co

mp

etit

ion

WP

Rep

ort

D

raft

law

Asa

p A

dd

itio

nal

TA

42 T

he M

inis

try

of C

omm

erce

act

ed a

s th

efo

cal

poin

t fo

r ac

tiviti

esre

late

d to

WT

O a

cces

sion

.T

heW

TO

Off

ice

of t

he M

inis

try

had

10pr

ofes

sion

al s

taff

. I

n ad

ditio

n, a

n In

ter-

Min

iste

rial

Co-

ordi

natin

g C

omm

ittee

on

WT

OA

cces

sion

, cha

ired

by

the

Min

iste

rof

Com

mer

ce, h

adbe

en e

stab

lishe

d in

Sep

tem

ber

1997

.T

he r

ole

of th

is C

omm

ittee

, whi

chco

unte

d15

mem

bers

at

the

polic

y le

vel

and

thre

eof

fici

als

from

eac

h of

the

23

min

istr

ies

and

agen

cies

inv

olve

d in

WT

O a

ctiv

ities

at

the

wor

king

lev

el,

was

to

(i)

coor

dina

te p

olic

y is

sues

rela

ted

to W

TO

acc

essi

on;

(ii)

ela

bora

te g

uide

lines

to

impl

emen

t W

TO

Agr

eem

ents

;(i

ii) p

repa

re t

he n

eces

sary

doc

umen

tatio

n;(i

v)de

fine

the

Gov

ernm

ent's

pri

oriti

es r

elat

ed t

ofo

reig

n tr

ade

polic

ies;

(v

) en

sure

coo

rdin

atio

n am

ong

Min

istr

ies;

an

d (v

i) r

epor

t to

the

Pri

me

Min

iste

r on

iss

ues

rela

ted

toW

TO

acc

essi

on.

InA

ugus

t 20

01,

his

Gov

ernm

ent

had

appo

inte

d a

wor

king

gro

up c

ompr

isin

g m

ore

than

110

seni

orgo

vern

men

t off

icia

ls to

ass

ist i

n m

atte

rs r

elat

ed to

Cam

bodi

a's

acce

ssio

nto

the

WT

O.

43 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

that

the

Nat

iona

l Ass

embl

yan

d th

e Se

nate

had

adop

ted

a la

w r

atif

ying

the

New

Yor

k C

onve

ntio

n on

the

Enf

orce

men

t of

Fore

ign

Arb

itral

Aw

ards

in 2

002.

He

furt

her

conf

irm

ed th

at, a

s in

dica

ted

in d

ocum

ent W

T/A

CC

/KH

M/1

0/R

ev.2

, the

Min

istr

y of

Com

mer

ce w

as d

evel

opin

g a

draf

t "L

aw E

stab

lishi

ng th

e C

omm

erci

alC

ourt

" to

impl

emen

t the

Con

vent

ion.

The

draf

t law

had

been

app

rove

dby

the

Cou

ncil

of M

inis

ters

inM

arch

2003

and

was

cur

rent

ly b

eing

con

side

red

by P

arlia

men

t. H

e ex

pect

ed th

epr

oces

s of

ado

ptin

g an

d pr

omul

gatin

g th

e la

w t

o be

com

plet

ed b

y Ju

ne20

04.

He

note

d th

at C

ambo

dia

was

rec

eivi

ng s

ome

tech

nica

l ass

ista

nce

in t

his

area

, and

that

his

cou

ntry

was

seek

ing

mor

e ex

tens

ive

and

pred

icta

ble

assi

stan

ce.

He

furt

her

conf

irm

ed t

hat

a C

omm

erci

al C

ourt

sys

tem

with

tra

ined

jud

ges

and

staf

f es

sent

ial

to c

reat

e a

clim

ate

of t

rans

pare

ncy

and

pred

icta

bilit

y, o

r a

func

tiona

l equ

ival

ent,

shou

ld th

eref

ore

be in

pla

ceby

the

end

of 2

004.

Top

icW

TO

Ref

eren

ecT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Po

lic

par

a.28

y44

nee

ded

Co

mm

erci

alar

bit

rati

on

WP

Rep

ort

p

ara.

3345

,36

46

Dra

ftla

w o

n

com

mer

cial

arb

itra

tio

n

1 Ja

nu

ary

2005

No

TA

Nee

ded

Fir

st q

uar

ter

2005

An

ti-d

um

pin

g,

WP

Rep

51

safe

gu

ard

san

dco

un

terv

ailin

gm

easu

res

ort

par

a.10

647,

10848

Dra

ft le

gis

lati

on

1

Jan

uar

y20

05N

o T

A n

eed

ed

44 T

he r

epre

sent

ativ

e of

Cam

bodi

a sa

id th

at C

ambo

dia

did

not

have

a c

ompe

titio

n la

w, b

ut C

ambo

dia

was

see

king

ass

ista

nce

to d

raft

leg

isla

tion

to e

nsur

e fa

ir c

ompe

titio

n in

var

ious

busi

ness

act

iviti

es.

Ask

ed t

o pr

ovid

e in

form

atio

n on

how

Cam

bodi

aw

as a

ddre

ssin

g th

e pr

ovis

ions

of

Art

icle

VII

I of

the

GA

TS

conc

erni

ng m

onop

olie

s an

d ex

clus

ive

serv

ice

supp

liers

, he

said

that

inge

nera

l his

Gov

ernm

ent w

as p

ursu

ing

apo

licy

of g

radu

al li

bera

lizat

ion

ofpr

evio

usly

mon

opol

ized

serv

ices

to in

volv

e pr

ivat

e pa

rtic

ipat

ion,

incl

udin

gfo

reig

nco

mpe

titio

n.

45 A

s fo

r co

mm

erci

al d

ispu

tes,

the

Min

istr

y of

Jus

tice

toge

ther

with

the

Min

istr

y of

Com

mer

ce w

ere

prep

arin

g a

draf

t la

w e

stab

lishi

ng a

Com

mer

cial

Cou

rt.

In

the

inte

rim

,co

mm

erci

al c

ases

wer

e br

ough

t be

fore

pro

vinc

ial

and

mun

icip

al c

ourt

s. V

olun

tary

set

tlem

ent

of c

omm

erci

al d

ispu

tes

cam

e w

ithin

the

com

pete

nce

of t

he C

ham

ber

of C

omm

erce

,em

pow

ered

to

act

as a

n ar

bite

r un

der

Art

icle

9 o

f th

e 19

95 C

ham

ber

of C

omm

erce

Law

. C

ambo

dia

had

ratif

ied

the

New

Yor

k C

onve

ntio

non

the

Enf

orce

men

t of

For

eign

Arb

itral

Aw

ards

on 5

Jan

uary

1960

.T

he M

inis

try

of C

omm

erce

was

pre

pari

ng a

Law

on C

omm

erci

al A

rbitr

atio

n to

impl

emen

t the

New

Yor

k C

onve

ntio

n.

46 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t a

syst

em o

f ap

peal

fro

m a

dmin

istr

ativ

e de

cisi

ons

inm

atte

rs c

over

ed b

yW

TO

Agr

eem

ents

to

an i

ndep

ende

nt t

ribu

nal,

as p

rovi

ded

for

in A

rtic

le X

of

the

GA

TT

and

othe

rW

TO

Agr

eem

ents

, was

in

the

proc

ess

ofbe

ing

esta

blis

hed

in th

e dr

aft L

aw o

n Ju

dici

alO

rgan

izat

ion,

and

wou

ldbe

oper

atio

nal b

y D

ecem

ber

2004

. In

add

ition

, the

Com

mer

cial

Cou

rt s

yste

m w

ould

be e

stab

lishe

d by

1 Ja

nuar

y20

05.

The

Wor

king

Part

y to

ok n

ote

of th

is c

omm

itmen

t.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

An

ti-d

um

pin

g,

safe

gu

ard

san

dco

un

terv

ag

mea

sure

s

par

a.10

leg

isla

tio

nre

gu

lati

on

s to

WT

O

ado

pti

on

of

lw

sili

n

WP

Rep

ort

8

No

tify

rel

evan

t an

dA

sap

aft

er

a

No

TA

nee

ded

Leg

alW

P R

epo

rt

Dra

ftL

aw o

nfr

amew

ork

fo

r b

usi

nes

sA

nn

exI

Att

ach

men

tB

usi

nes

sE

nte

rpri

ses

Ear

ly 2

004

No

TA

nee

ded

Fir

stq

uar

ter

2005

47 T

he r

epre

sent

ativ

e of

Cam

bodi

a sa

id th

at C

ambo

dia

had

not y

et d

evel

oped

any

trad

e re

med

y le

gisl

atio

n. A

ccor

ding

to C

ambo

dia'

s le

gisl

atio

n ag

enda

, the

law

on

anti-

dum

ping

and

coun

terv

ailin

gm

easu

res

and

the

law

on

safe

guar

dm

easu

res

wer

e no

tex

pect

ed t

o be

app

rove

d un

til t

he s

econ

d ha

lfof

200

4.

He

adde

d th

at C

ambo

dia

wou

ld a

pply

saf

egua

rd, a

nti-

dum

ping

or

coun

terv

ailin

g m

easu

res

cons

iste

nt w

ith th

eW

TO

Agr

eem

ents

, inc

ludi

ng th

eir

proc

edur

al a

spec

ts, a

s a

Mem

ber

of th

eW

TO

.

48 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

that

Cam

bodi

a w

ould

not

app

ly a

ny a

nti-

dum

ping

, cou

nter

vaili

ng o

r sa

fegu

ard

mea

sure

unt

il it

had

notif

ied

and

impl

emen

ted

appr

opri

ate

law

s an

dre

gula

tions

in

conf

orm

ity w

ith t

hepr

ovis

ions

of

the

WT

O A

gree

men

ts o

n th

eIm

plem

enta

tion

ofA

rtic

le V

I, o

n Su

bsid

ies

and

Cou

nter

vaili

ng M

easu

res,

and

on S

afeg

uard

s.In

the

ela

bora

tion

of a

ny l

egis

latio

n co

ncer

ning

suc

h an

ti-du

mpi

ng,

coun

terv

ailin

g an

d sa

fegu

ard

mea

sure

s C

ambo

dia

wou

ld e

nsur

e th

eir

full

conf

orm

ity w

ith t

he r

elev

ant

WT

Opr

ovis

ions

, inc

ludi

ngA

rtic

les

VI

and

XIX

of

the

GA

TT

199

4 an

d th

eA

gree

men

ts o

n th

e Im

plem

enta

tion

of A

rtic

le V

I, th

e A

gree

men

t on

Subs

idie

s an

d C

ount

erva

iling

Mea

sure

s an

dth

e A

gree

men

t on

Saf

egua

rds.

A

fter

suc

h le

gisl

atio

n w

as i

mpl

emen

ted,

Cam

bodi

a w

ould

als

oon

ly a

pply

any

ant

i-du

mpi

ngdu

ties,

cou

nter

vaili

ngdu

ties

and

safe

guar

d m

easu

res

infu

ll co

nfor

mity

with

the

rele

vant

WT

O p

rovi

sion

s.T

heW

orki

ng P

arty

took

note

of th

ese

com

mitm

ents

.

52

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Sp

ecia

lE

con

om

icZ

on

es

WP

Rep

ort

p

ara.

15149

and

An

nex

IA

ttac

hm

ent

Dra

ft L

aw o

n E

xpo

rt

Pro

cess

ing

Zo

nes

(wit

h C

DC

an

d M

IME

)

Asa

pN

oT

Aee

ded

nIn

term

inis

teri

al m

eeti

ng

s –

28 D

ec 2

004.

Dra

ft

Ver

sio

n 4

Leg

alfr

amew

ork

fo

r b

usi

nes

s

WP

Rep

ort

An

nex

I A

ttac

hm

ent

Dra

ft In

solv

ency

Law

Asa

pN

o T

A n

eed

edP

end

ing

deb

ates

at

the

inte

rmin

iste

rial

mee

tin

g a

t th

e O

CM

-1st

qu

arte

r 20

05

Leg

alfr

amew

ork

fo

r b

usi

nes

s

WP

Rep

ort

An

nex

I A

ttac

hm

ent

Dra

ft S

ecu

red

T

ran

sact

ion

Law

Asa

pT

A is

bei

ng

p

rovi

ded

Pen

din

g d

ebat

es a

t th

e in

term

inis

teri

al m

eeti

ng

at

the

OC

M-1

st q

uar

ter

2005

Leg

al

bu

sin

ess

WP

Rep

ort

Att

ach

men

tfr

amew

ork

for

An

nex

ID

raft

Co

mm

erci

alC

on

trac

ts L

awA

sap

No

TA

nee

ded

Leg

alW

P R

epo

rt

53

fram

ewo

rk f

or

bu

sin

ess

An

nex

I A

ttac

hm

ent

Dra

ft C

om

mer

cial

Lea

sin

g L

aw20

05N

o T

A n

eed

ed

49 T

he r

epre

sent

ativ

e of

Cam

bodi

a sa

id th

at th

e fr

ee z

ones

or s

peci

al e

cono

mic

are

as, i

nclu

ding

spe

cial

prom

otio

n zo

nes

esta

blis

hed

in a

ccor

danc

ew

ith th

e L

aw o

n In

vest

men

t whi

chit

esta

blis

hed

wou

ldbe

ful

ly s

ubje

ct to

the

cove

rage

of

WT

O A

gree

men

ts a

nd it

s co

mm

itmen

ts in

its

Prot

ocol

of

Acc

essi

on to

the

WT

O A

gree

men

t and

that

Cam

bodi

a w

ould

ensu

reen

forc

emen

t of

its

WT

Oob

ligat

ions

in

thos

e zo

nes

or a

reas

.In

add

ition

, in

acco

rdan

ce w

ith t

he (

draf

t) L

awon

Indu

stri

al Z

ones

,fro

m t

he d

ate

of a

cces

sion

goo

dspr

oduc

ed i

n an

ysu

ch z

ones

or

area

s un

der

tax

and

tari

ffpr

ovis

ions

tha

t ex

empt

im

port

s an

d im

port

ed i

nput

sfr

om t

arif

fs a

nd c

erta

in t

axes

wou

ld b

e su

bjec

t to

nor

mal

cus

tom

s fo

rmal

ities

whe

nen

teri

ng th

ere

st o

f C

ambo

dia,

incl

udin

g th

eap

plic

atio

nof

tari

ffs

and

taxe

s. T

heW

orki

ng P

arty

took

note

of

thes

e co

mm

itmen

ts.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Leg

alfr

amew

ork

fo

r W

P R

epo

rt

An

nex

I D

raft

Co

mm

Ag

ency

bu

sin

ess

Att

ach

men

t

erci

al L

aw20

05N

o T

A n

eed

ed

TR

IPS

: M

arks

W

P R

epo

rt

par

a. 2

0650

and

Tab

le 1

2

Pu

tin

forc

esu

b-

dec

ree

imp

lem

enti

ng

th

e L

aw o

n M

arks

2004

TA

is b

ein

g

pro

vid

ed

TR

IPS

:IP

Rb

ord

erm

easu

res

WP

Rt

epo

rp

ara.

19951

Dra

ftsu

b-d

ecre

eim

ple

men

tin

gsp

ecia

lbo

rder

mea

sure

sco

nta

ined

in L

awo

nM

arks

)

2004

TA

nee

ded

Will

fin

ish

s

(wit

hM

EF

54

ub

-dec

ree

com

bin

ing

bo

th it

ems

by

En

d D

ecem

ber

200

4

TB

TW

P R

epo

rt

Ext

end

AS

EA

N

Asa

pN

o T

A n

eed

ed

Mer

ge

issu

e u

nd

er M

IME

res

po

nsi

bili

ties

50 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t C

ambo

dia

wou

ld a

pply

the

Agr

eem

ent

on T

rade

-Rel

ated

Asp

ects

of

Inte

llect

ual

Prop

erty

Rig

hts

no l

ater

tha

n 1

Janu

ary

2007

acco

rdin

g to

the

Act

ion

Plan

in T

able

12

with

the

unde

rsta

ndin

g th

at d

urin

g th

is p

erio

d pr

otec

tion

for

inte

llect

ual p

rope

rty

righ

ts li

sted

in p

arag

raph

s 20

4 an

d 20

5 w

ould

be

appl

ied

inC

ambo

dia.

The

Wor

king

Part

y to

okno

teof

this

com

mitm

ent.

51 T

he r

epre

sent

ativ

e of

Cam

bodi

asa

id t

hat

the

draf

t L

awon

Cus

tom

s di

d no

t in

clud

e pr

ovis

ions

on

bord

er m

easu

res

as r

equi

red

by A

rtic

le 5

1-60

of t

heT

RIP

SA

gree

men

t. T

hene

cess

ary

bord

er m

easu

res

had

been

inc

orpo

rate

d in

the

Law

on M

arks

, T

rade

Nam

es a

nd A

cts

ofU

nfai

r C

ompe

titio

n (A

rtic

les

35-4

7).

In

addi

tion,

the

Law

on

Cop

yrig

hts

and

Rel

ated

Rig

hts

(Art

icle

63)

incl

uded

, by

refe

renc

e, a

ll bo

rder

mea

sure

s in

clud

ed in

the

Law

on

Mar

ks, T

rade

Nam

es a

nd A

cts

of U

nfai

r C

ompe

titio

n. H

e sa

w n

o ne

ed to

con

solid

ate

thes

e m

easu

res

in t

he n

ew L

aw o

n C

usto

ms,

as

the

draf

t L

aw (

Art

icle

8)

expl

icitl

y re

quir

ed t

he c

usto

ms

auth

oriti

es t

o ex

ecut

e al

l la

ws

of C

ambo

dia,

and

thi

s pr

ovis

ion

wou

ld b

e un

derp

inne

dby

a s

ub-D

ecre

e to

bepr

epar

ed b

y th

e D

epar

tmen

t of

Cus

tom

s an

d E

xcis

es, i

n co

llabo

ratio

nw

ith th

e M

inis

trie

s re

spon

sibl

e fo

r th

epr

otec

tion

of in

telle

ctua

l pro

pert

y.

Top

icW

TO

Ref

eren

ecT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

par

a 12

7co

nfo

rmas

sess

men

tag

reem

ents

toW

TO

Mem

b

52it

y

all

ers

(wit

hM

OI)

TR

AD

INW

P R

epo

rt

Ver

ify

and

mth

at a

ll re

gis

tere

d

ded

Mo

H h

as p

ut

in it

s p

rio

riti

es. A

men

din

g

55

GR

IGH

TS

par

a 44

53

&50

54

ake

sure

com

pan

ies

cou

ld

Asa

pN

ot

nee

leg

isla

tio

ns.

Will

req

ues

t W

HO

exp

erti

se t

o c

om

e an

d h

elp

.

52 C

ambo

dia

had

been

a m

embe

rof

the

Int

erna

tiona

l O

rgan

izat

ion

for

Stan

dard

izat

ion

(ISO

) si

nce

1 Ja

nuar

y 19

95 a

ndha

d ra

tifie

d th

e A

SEA

N F

ram

ewor

kA

gree

men

t on

Mut

ual

Rec

ogni

tion

Arr

ange

men

ts.

Impo

rted

goo

ds w

ere

subj

ect

to t

he s

ame

insp

ectio

n pr

oces

s as

dom

estic

ally

-pro

duce

d go

ods,

and

Cam

bodi

a w

ould

ext

end

any

Con

form

ity A

sses

smen

tA

gree

men

ts,

in p

artic

ular

tho

se f

ores

een

unde

r th

eA

SEA

N,

to a

ll M

embe

rs o

f th

eW

TO

. C

ambo

dia

reco

gniz

ed c

ertif

icat

es f

rom

thi

rd c

ount

ries

' cer

tific

atio

n bo

dies

pro

vide

dth

atth

ese

bodi

es h

ad r

ecei

ved

form

al a

ccre

dita

tion

from

int

erna

tiona

l or

reg

iona

l ac

cred

itatio

n bo

dies

, or

wer

e si

gnat

orie

s to

a m

utua

l re

cogn

ition

arr

ange

men

t. I

n th

e ca

se o

fph

arm

aceu

tical

pro

duct

s, la

bora

tory

test

ing

in C

ambo

dia

was

req

uire

dpr

ior

to r

egis

trat

ion

to c

heck

the

conf

orm

ity o

f th

e sa

mpl

es.

53 A

pro

hibi

tion

on c

ompa

nies

with

les

s th

an 5

1pe

r ce

nt C

ambo

dian

owne

rshi

p to

eng

age

in i

mpo

rt/e

xpor

t ac

tiviti

es f

or t

he s

ole

purp

ose

of r

e-se

lling

good

s w

ithou

t tr

ansf

orm

atio

nha

dbe

en a

bolis

hed

purs

uant

to a

Dec

lara

tion

of t

he M

inis

try

of C

omm

erce

of 2

5Ja

nuar

y 20

00.

He

conf

irm

ed t

hat

all

firm

s, f

orei

gnan

d do

mes

tic,

prop

erly

reg

iste

red

with

the

Min

istr

y of

Com

mer

ce,

coul

d en

gage

in

impo

rt a

nd e

xpor

t ac

tiviti

es o

f al

l ty

pes

of g

oods

exc

ept

mili

tary

equ

ipm

ent

and

narc

otic

dru

gs.

Tra

de i

n fo

rest

ry p

rodu

cts

coul

d on

ly b

eco

nduc

ted

by l

icen

sed

conc

essi

onai

res

(dom

estic

or

fore

ign)

acc

ordi

ng t

oA

rtic

le4,

Cha

pter

2 o

f Su

b-D

ecre

e N

o. 0

5 of

7 F

ebru

ary

2000

. A

fir

m c

ould

am

end

its r

egis

trat

ion

toin

clud

e im

port

and

exp

ort a

ctiv

ities

by

filin

g an

app

licat

ion

toam

end

its M

emor

andu

m a

ndA

rtic

les

of A

ssoc

iatio

n to

the

Min

istr

y of

Com

mer

ce.

The

am

ende

d re

gist

ratio

nw

ould

be

depo

site

d at

the

Off

ice

of C

omm

erci

al R

egis

try

at th

e M

inis

try.

54 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t it

was

not

the

int

ent

ofhi

s G

over

nmen

t th

at t

he c

urre

nt r

equi

rem

ents

for

im

port

atio

n of

pha

rmac

eutic

als

or o

fve

teri

nary

med

icin

essh

ould

dis

crim

inat

e ag

ains

t im

port

s.

In t

his

rega

rd, h

e fu

rthe

r co

nfir

med

tha

t no

lat

er t

han

1 Ju

ne 2

005,

Cam

bodi

a w

ould

am

end

its l

egis

latio

n, e

.g.,

the

Law

on

Dru

g M

anag

emen

tan

d Pr

akas

No.

82

of 3

1 M

arch

199

9 on

"Pr

oced

ures

for

Exp

orts

and

Im

port

s of

Pha

rmac

eutic

als"

, so

as n

ot to

abr

idge

the

righ

t to

impo

rt a

nd to

exp

ort,

and

that

any

reg

iste

red

entit

yco

uld

be th

e im

port

er o

r ex

port

er o

fre

cord

. H

e co

nfir

med

that

fro

m th

at d

ate,

Cam

bodi

a w

ould

ens

ure

that

its

law

s an

d re

gula

tions

rela

ting

to th

eri

ght t

o tr

ade

ingo

ods

and

all f

ees,

ch

arge

s or

taxe

s le

vied

on s

uch

righ

tsw

ould

be in

ful

l con

form

ityw

ithits

WT

O o

blig

atio

ns,i

nclu

ding

Art

icle

s V

III:

I(a)

, XI:

I an

d II

I:2

and

4 of

the

GA

TT

1994

and

that

it w

ould

also

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

eng

age

ini

and

exp

ort

typ

es o

f g

omp

ort

of

all

od

s

MIN

IST

RY

OF

EC

ON

OM

YA

ND

FIN

AN

CE

Pri

vati

zati

on

WP

Re

tP

rep

are

rep

n

refo

rm

1 y

afte

rac

cess

ion

and

ref

orm

po

rp

ara.

2555

ort

op

riva

tiza

tio

n a

nd

ea

rN

o T

A n

eed

ed

Cu

sto

ms

WP

et

Pas

sC

us

y 20

04va

luat

ion

Rp

or

par

a. 8

456,

9357

tom

sL

awan

d a

do

pt

imp

lem

enti

ng

reg

ula

tio

ns

Ear

lT

A r

ecei

ved

. F

urt

her

TA

n

eed

ed

Will

be

ado

pte

d b

y N

A b

yM

id 2

005

impl

emen

t suc

h la

ws

and

regu

latio

ns in

ful

l con

form

ity w

ith th

ese

oblig

atio

ns.

He

conf

irm

ed in

part

icul

ar th

at th

isw

as r

ecog

nize

das

with

outp

reju

dice

to r

equi

rem

ents

that

mig

htbe

plac

ed o

n di

stri

buto

rs o

f do

mes

tican

dim

port

edpr

oduc

ts to

pre

serv

epl

ant,

anim

al o

r hu

man

hea

lth, l

ife,

or

safe

ty.

The

Wor

king

Par

ty to

okno

te o

f th

ese

com

mitm

ents

.

55 T

he r

epre

sent

ativ

e of

Cam

bodi

a st

ated

tha

t hi

s G

over

nmen

t w

ould

ens

ure

the

tran

spar

ency

of

its o

ngoi

ngpr

ivat

izat

ion

prog

ram

me

and

wou

ld k

eep

WT

O M

embe

rs i

nfor

med

of

prog

ress

in

the

refo

rm o

f its

econ

omic

and

tra

de r

egim

es.

He

stat

ed t

hat

his

Gov

ernm

ent

wou

ldpr

ovid

e pe

riod

ic r

epor

ts t

oW

TO

Mem

bers

on

deve

lopm

ents

in

its p

rogr

amm

e of

priv

atiz

atio

n as

lon

g as

the

pri

vatiz

atio

npr

ogra

mm

e w

ould

be i

n ex

iste

nce,

alo

ng t

he l

ines

ofth

at a

lrea

dy p

rovi

ded

to t

heW

orki

ng P

arty

.H

e al

so s

tate

d th

athi

s G

over

nmen

t w

ould

prov

ide

peri

odic

rep

orts

on o

ther

issu

es r

elat

ed to

its

econ

omic

ref

orm

as

rele

vant

to it

s ob

ligat

ions

unde

r th

eW

TO

. T

heW

orki

ng P

arty

took

note

of

thes

e co

mm

itmen

ts.

56 I

n re

ply,

the

rep

rese

ntat

ive

of C

ambo

dia

said

tha

t th

e ne

w d

raft

Law

on

Cus

tom

s ha

d be

en a

ppro

ved

by t

he C

ounc

il of

Min

iste

rsan

dw

as p

lann

edfo

r ad

optio

nby

the

Nat

iona

lA

ssem

bly

by J

uly

2004

. R

egul

atio

nsw

ould

be

deve

lope

dup

on c

ompl

etio

n of

the

draf

ting

of t

hene

w L

aw, i

nclu

ding

reg

ulat

ions

to

impl

emen

t A

rtic

les

17-2

4of

the

Agr

eem

ent,

as

wel

l as

the

Int

erpr

etat

ive

Not

es i

n A

nnex

Iof

the

Agr

eem

ent

and

wou

ld b

e m

ade

avai

labl

e to

WT

OM

embe

rs f

orre

view

.H

e em

phas

ized

tha

t C

ambo

dia

wou

ld s

eek

a tr

ansi

tion

peri

od.

An

Act

ion

Plan

for

the

Im

plem

enta

tion

of t

he C

usto

ms

Val

uatio

nA

gree

men

t w

as p

rovi

ded

in d

ocum

ent

WT

/AC

C/K

HM

/13,

and

a r

evis

ed a

ctio

n pl

an i

n do

cum

ent

WT

/AC

C/K

HM

/13/

Rev

.1.

56

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

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sto

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Su

bm

it C

ust

om

s L

awan

dim

ple

me

reg

ula

tio

ns

to W

TO

Asa

p a

fter

ad

op

tio

no

fl

reg

s

No

TA

ees n

nti

ng

aw a

nd

u

lati

on

nd

ed

Cu

sto

mva

luat

ion

WP

Rep

ort

p

ara.

91

Elim

inat

e va

luat

ion

o

fau

tom

oac

cord

ing

nat

ion

al o

rig

in

On

dat

e o

f N

oT

Aee

s58

bile

sto

acce

ssio

nn

ded

Cu

sto

ms

WP

Rep

ort

P

rep

are

Cu

Dec

emb

er

57

valu

atio

nT

able

7, p

ara

sto

ms

team

an

d

dep

artm

enta

l pla

n t

o

2003

So

me

TA

s re

ceiv

ed. M

ore

57 T

he r

epre

sent

ativ

e of

Cam

bodi

ast

ated

that

legi

slat

ion

onth

e va

luat

ion

of im

port

sfo

r cu

stom

s an

d ta

xatio

npu

rpos

esco

nfor

min

g to

the

requ

irem

ents

of

the

Agr

eem

ent o

n C

usto

ms

Val

uatio

n w

ould

be

enac

ted

by 1

Jul

y 20

04.

Cam

bodi

aw

ould

prog

ress

ivel

y im

plem

ent t

he A

gree

men

t on

Cus

tom

s V

alua

tion

in a

ccor

danc

e w

ith th

e ac

tion

plan

in T

able

7, a

nd w

ithth

e un

ders

tand

ing

that

duri

ng t

his

peri

od t

he s

cope

of i

mpl

emen

tatio

n of

oth

er a

spec

tsof

the

Agr

eem

ent,

as d

escr

ibed

in

para

grap

hs 8

9, 9

0an

d 91

wou

ldbe

appl

ied

byC

ambo

dia.

Full

impl

emen

tatio

nw

ill s

tart

fro

m 1

Jan

uary

200

9.T

he W

orki

ng P

arty

took

note

of

this

com

mitm

ent.

58 D

urin

g th

is p

erio

d, C

ambo

dia

wou

ld e

nsur

e th

at i

ts r

egul

atio

ns u

nder

cur

rent

leg

isla

tion

in p

lace

and

add

ition

al l

egis

latio

n im

plem

ente

d du

ring

the

tra

nsiti

onco

ncer

ning

cus

tom

sva

luat

ion

wou

ldbe

app

lied

on a

non

-dis

crim

inat

ory

basi

s to

all

impo

rts.

In

part

icul

ar, t

hepr

actic

e of

var

ying

the

met

hod

ofva

luat

ion

for

impo

rts

of a

utom

obile

s ba

sed

onna

tiona

lor

igin

wou

ld b

e el

imin

ated

fro

m t

he d

ate

of a

cces

sion

, an

d C

ambo

dia

wou

ldon

ly a

pply

cust

oms

dutie

s on

im

port

edgo

ods

on a

non

-dis

crim

inat

ory

basi

s fr

om a

ll W

TO

Mem

ber

coun

trie

s.A

ny c

hang

es m

ade

in it

s la

ws,

reg

ulat

ions

and

prac

tice

duri

ng th

e tr

ansi

tion

peri

odw

ould

not r

esul

t in

a le

sser

deg

ree

of c

onsi

sten

cy w

ith th

e pr

ovis

ions

of

the

Agr

eem

ent

on C

usto

ms

Val

uatio

n th

an e

xist

ed o

n th

e da

te o

f ac

cess

ion.

Cam

bodi

a w

ould

par

ticip

ate

inth

ew

ork

of th

e C

omm

ittee

on

Cus

tom

s V

alua

tion.

He

adde

d th

at C

ambo

dia

wou

ld s

eek

out a

ll av

aila

ble

tech

nica

l ass

ista

nce

to e

nsur

e th

at it

s ca

paci

ty to

ful

ly im

plem

ent t

he A

gree

men

t upo

n ex

pira

tion

of th

e tr

ansi

tion

peri

od is

ass

ured

.

Top

icW

TO

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eren

ecT

ask

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dlin

ea

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nica

lch

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ista

nce

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men

ts a

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mn

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s nco

ntr

act

req

ure

d

61,1

0562

If P

SI c

on

tin

ues

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apt

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toW

TO

rule

s

Dec

emb

er20

03N

ot

i

58

59 T

he r

epre

sent

ativ

e of

Cam

bodi

ast

ated

that

legi

slat

ion

onth

e va

luat

ion

of im

port

sfo

r cu

stom

s an

d ta

xatio

npu

rpos

esco

nfor

min

g to

the

requ

irem

ents

of

the

Agr

eem

ent o

n C

usto

ms

Val

uatio

n w

ould

be

enac

ted

by 1

Jul

y 20

04.

Cam

bodi

aw

ould

prog

ress

ivel

y im

plem

ent t

he A

gree

men

t on

Cus

tom

s V

alua

tion

in a

ccor

danc

e w

ith th

e ac

tion

plan

in T

able

7, a

nd w

ithth

e un

ders

tand

ing

that

duri

ng t

his

peri

od t

he s

cope

of i

mpl

emen

tatio

n of

oth

er a

spec

tsof

the

Agr

eem

ent,

as d

escr

ibed

in

para

grap

hs 8

9, 9

0an

d 91

wou

ldbe

appl

ied

byC

ambo

dia.

Full

impl

emen

tatio

nw

ill s

tart

fro

m 1

Jan

uary

200

9.T

he W

orki

ng P

arty

took

note

of

this

com

mitm

ent.

60 T

he r

epre

sent

ativ

e of

Cam

bodi

a sa

id t

hat

the

Cus

tom

s an

d E

xcis

eD

epar

tmen

t ha

d em

bark

edon

a C

usto

ms

Ref

orm

and

Mod

erni

zatio

nPr

ogra

mm

e ai

med

at

crea

ting

a m

oder

ncu

stom

s ad

min

istr

atio

n co

mbi

ning

eff

icie

ntre

venu

e co

llect

ion

and

prot

ectio

n at

the

bor

der

with

the

need

s of

the

pri

vate

sec

tor

for

fast

, str

aigh

tfor

war

d an

d re

liabl

e cu

stom

s se

rvic

es.

Maj

or e

lem

ents

of

the

refo

rm p

rogr

amm

e in

clud

ed s

tren

gthe

ning

of

the

lega

l fr

amew

ork,

rest

ruct

urin

gof

the

cus

tom

sta

riff

, mod

erni

zatio

n an

dst

ream

linin

gof

cus

tom

s pr

oced

ures

,ex

pans

ion

of in

tern

atio

nalr

elat

ions

, eff

ectiv

e en

forc

emen

t, au

tom

ated

sys

tem

s an

d pr

oced

ures

, mea

sure

s to

str

engt

hen

the

Cus

tom

s an

d E

xcis

eD

epar

tmen

t, be

tter

serv

ice

to th

epu

blic

and

trad

e fa

cilit

atio

n.A

sum

mar

y of

the

refo

rm s

trat

egy

was

pro

vide

d in

docu

men

tWT

/AC

C/K

HM

/6,A

nnex

IV.

61 T

he r

epre

sent

ativ

e of

Cam

bodi

ast

ated

that

legi

slat

ion

onth

e va

luat

ion

of im

port

sfo

r cu

stom

s an

d ta

xatio

npu

rpos

esco

nfor

min

g to

the

requ

irem

ents

of

the

Agr

eem

ent o

n C

usto

ms

Val

uatio

n w

ould

be

enac

ted

by 1

Jul

y 20

04.

Cam

bodi

aw

ould

prog

ress

ivel

y im

plem

ent t

he A

gree

men

t on

Cus

tom

s V

alua

tion

in a

ccor

danc

e w

ith th

e ac

tion

plan

in T

able

7, a

nd w

ithth

e un

ders

tand

ing

that

duri

ng t

his

peri

od t

he s

cope

of i

mpl

emen

tatio

n of

oth

er a

spec

tsof

the

Agr

eem

ent,

as d

escr

ibed

in

para

grap

hs 8

9, 9

0an

d 91

wou

ldbe

appl

ied

byC

ambo

dia.

Full

impl

emen

tatio

nw

ill s

tart

fro

m 1

Jan

uary

200

9.T

he W

orki

ng P

arty

took

note

of

this

com

mitm

ent.

62 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

that

fro

m th

e da

te o

f ac

cess

ion

his

Gov

ernm

ent w

ould

take

ful

l res

pons

ibili

ty to

ens

ure

that

the

oper

atio

nsof

the

pres

hipm

ent i

nspe

ctio

nco

mpa

nies

, if

reta

ined

by C

ambo

dia

mee

t th

e re

quir

emen

ts o

f th

eW

TO

Agr

eem

ents

, inc

ludi

ng t

he e

stab

lishm

ent

of c

harg

es a

nd f

ees

cons

iste

ntw

ith A

rtic

le V

III

of t

heG

AT

T19

94,

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2004

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A n

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spar

ency

req

uire

men

tsof

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WT

O A

gree

men

ts,i

n pa

rtic

ular

Art

icle

X o

f th

e G

AT

T 1

994,

and

the

prov

isio

ns o

f th

e A

gree

men

t on

the

Impl

emen

tatio

n of

Art

icle

V

II o

f th

e G

AT

T 1

994

and

the

Agr

eem

ent

on P

resh

ipm

ent

Insp

ectio

n.H

e fu

rthe

r co

nfir

med

tha

t C

ambo

dia’

s pr

e-sh

ipm

ent

insp

ectio

n re

gim

e w

ould

be

tem

pora

ry a

nd w

ould

onl

yop

erat

e un

til s

uch

time

as t

he C

usto

ms

and

Exc

ise

Dep

artm

ent

was

abl

e to

car

ry o

ut t

he f

unct

ions

pre

sent

ly p

erfo

rmed

by

pre-

ship

men

t in

spec

tion

serv

ice

prov

ider

s.

The

Wor

king

Part

y to

ok n

ote

of th

ese

com

mitm

ents

.

63 T

he r

epre

sent

ativ

e of

Cam

bodi

ast

ated

that

legi

slat

ion

onth

e va

luat

ion

of im

port

sfo

r cu

stom

s an

d ta

xatio

npu

rpos

esco

nfor

min

g to

the

requ

irem

ents

of

the

Agr

eem

ent o

n C

usto

ms

Val

uatio

n w

ould

be

enac

ted

by 1

Jul

y 20

04.

Cam

bodi

aw

ould

prog

ress

ivel

y im

plem

ent t

he A

gree

men

t on

Cus

tom

s V

alua

tion

in a

ccor

danc

e w

ith th

e ac

tion

plan

in T

able

7, a

nd w

ithth

e un

ders

tand

ing

that

duri

ng t

his

peri

od t

he s

cope

of i

mpl

emen

tatio

n of

oth

er a

spec

tsof

the

Agr

eem

ent,

as d

escr

ibed

in

para

grap

hs 8

9, 9

0an

d 91

wou

ldbe

appl

ied

byC

ambo

dia.

Full

impl

emen

tatio

nw

ill s

tart

fro

m 1

Jan

uary

200

9.T

he W

orki

ng P

arty

took

note

of

this

com

mitm

ent.

64 T

he r

epre

sent

ativ

e of

Cam

bodi

ast

ated

that

legi

slat

ion

onth

e va

luat

ion

of im

port

sfo

r cu

stom

s an

d ta

xatio

npu

rpos

esco

nfor

min

g to

the

requ

irem

ents

of

the

Agr

eem

ent o

n C

usto

ms

Val

uatio

n w

ould

be

enac

ted

by 1

Jul

y 20

04.

Cam

bodi

aw

ould

prog

ress

ivel

y im

plem

ent t

he A

gree

men

t on

Cus

tom

s V

alua

tion

in a

ccor

danc

e w

ith th

e ac

tion

plan

in T

able

7, a

nd w

ithth

e un

ders

tand

ing

that

duri

ng t

his

peri

od t

he s

cope

of i

mpl

emen

tatio

n of

oth

er a

spec

tsof

the

Agr

eem

ent,

as d

escr

ibed

in

para

grap

hs 8

9, 9

0an

d 91

wou

ldbe

appl

ied

byC

ambo

dia.

Full

impl

emen

tatio

nw

ill s

tart

fro

m 1

Jan

uary

200

9.T

he W

orki

ng P

arty

took

note

of

this

com

mitm

ent.

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oo

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to

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ti

60

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sto

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le 7

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a E

stab

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dat

a b

ase

of

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plia

nt

valu

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to

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S

om

e T

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ore

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g

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Rep

ort

par

a 98

66E

qu

ip e

nfo

rcem

ent

team

sA

SA

P

TA

nee

ded

Sm

ug

glin

gan

d is

sues

of

cust

om

sad

min

istr

atio

n

WP

Rep

ort

p

ara.

9967

Est

ablis

h d

isp

ute

se

ttle

men

tm

ech

anis

m

Dec

emb

er20

04N

o T

A n

eed

ed

65 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

thi

sG

over

nmen

t in

tend

ed t

o co

mpl

y fu

lly w

ith t

hepr

ovis

ions

of t

heW

TO

Agr

eem

ent

on R

ules

of

Ori

gin

inth

e ap

plic

atio

n of

pr

efer

entia

l and

non-

pref

eren

tial r

ules

of

orig

in a

ndw

ould

be a

ble

todo

so

afte

r en

actm

ent o

f th

ene

wC

usto

ms

Law

and

its

impl

emen

ting

regu

latio

ns,n

o la

ter

than

1 Ja

nuar

y20

05.

In

part

icul

ar,

the

requ

irem

ents

of

Art

icle

2(h

)an

dA

nnex

II

para

grap

h 3(

d) o

f th

e A

gree

men

t, w

hich

req

uire

pro

visi

on,

upon

req

uest

, of

an a

sses

smen

t of

the

ori

gin

of t

he i

mpo

rt a

ndou

tline

the

ter

ms

unde

rw

hich

it

will

be

prov

ided

,wou

ldbe

est

ablis

hed

in C

ambo

dia’

sL

aw o

n C

usto

ms

from

the

dat

e of

its

pro

mul

gatio

n, o

r if

nec

essa

ry,b

y go

vern

men

tdec

ree,

no

late

r th

an 1

Jan

uary

2004

. T

he W

orki

ngPa

rty

took

note

of th

is c

omm

itmen

t.

66 C

once

rnin

g ef

fort

s to

com

bat

smug

glin

g –

an i

ssue

rai

sed

by s

ever

al M

embe

rs a

s co

mpe

titio

n fr

om s

mug

gled

goo

ds w

as i

mpe

ding

reg

ular

mar

ket

acce

ss –

the

rep

rese

ntat

ive

of

Cam

bodi

a sa

id t

hat

Gov

ernm

ent

Ord

erN

o.02

iss

ued

by t

he C

ounc

il of

Min

iste

rs o

n 19

Dec

embe

r20

01ha

d la

unch

ed a

maj

or a

nti-

smug

glin

gin

itiat

ive.

T

he G

over

nmen

t O

rder

dire

cted

the

mili

tary

, the

pol

ice

and

loca

l aut

hori

ties

to c

o-op

erat

ew

ith a

nd a

ssis

t the

Cus

tom

s an

d E

xcis

e D

epar

tmen

tin

anti-

smug

glin

g op

erat

ions

.A

n In

ter-

Min

iste

rial

Com

mis

sion

had

been

set

up

unde

r th

edi

rect

ion

of t

heM

inis

ter

of E

cono

my

and

Fina

nce

to p

lan,

co-

ordi

nate

, and

to

mon

itor

this

ini

tiativ

e.

At

the

sam

e tim

e, s

teps

had

been

tak

en t

o st

reng

then

the

Cus

tom

s an

dE

xcis

eD

epar

tmen

t an

d to

im

prov

e its

lev

el o

f in

tegr

ity.

The

ant

i-sm

uggl

ing

initi

ativ

e pr

ovid

ed g

ener

ous

fina

ncia

l re

war

ds t

o cu

stom

s of

fici

als

part

icip

atin

g in

su

cces

sful

ant

i-sm

uggl

ing

oper

atio

ns.

Cam

bodi

aw

as a

lso

seek

ing

tech

nica

l ass

ista

nce

to e

quip

enf

orce

men

t tea

ms

with

app

ropr

iate

tool

s an

d fa

cilit

ies.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Tar

iffs

on

te

xtile

san

dcl

oth

ing

WP

Rep

ort

p

ara.

165

Ap

ply

all

tar

on

anM

FN

68if

fsb

asis

Dat

e o

f ac

cess

ion

No

TA

nee

ded

M

EF

will

loo

k in

to it

.

TR

IPS

bm

easu

res

WP

Rep

ort

p

ara

199

Dra

ftsu

b-d

ece

imp

lem

enti

ng

2T

A n

eed

ed

Ref

er t

o t

he

62

ord

er69

re

spec

ial b

ord

er

mea

sure

s co

nta

ined

in

Law

on

Mar

ks(w

ith

MO

C)

004

pre

vio

us

IPR

sec

tio

n

67 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t in

orde

r to

add

ress

con

cern

s ab

out

smug

glin

g an

dot

her

cust

oms

adm

inis

trat

ion

issu

es b

roug

htto

itsat

tent

ion,

his

Gov

ernm

ent w

asin

the

pro

cess

of e

stab

lishi

ng a

dis

pute

set

tlem

ent

mec

hani

smw

ithin

the

Cam

bodi

an C

usto

ms

Serv

ice

to a

ccep

t an

d ac

t up

on c

ompl

aint

s ab

out

cust

oms

prac

tices

fro

m t

rade

rs a

nd

gove

rnm

ents

.T

his

mec

hani

sm w

as a

utho

rize

d in

the

new

Cus

tom

s L

aw a

nd w

ould

be e

stab

lishe

d pr

ior

to 1

Jan

uary

2005

. T

heW

orki

ng P

arty

took

note

of th

is c

omm

itmen

t.

68 T

he r

epre

sent

ativ

e of

Cam

bodi

a sa

id th

at te

xtile

s an

d cl

othi

ng w

ere

not s

ubje

ct to

any

spec

ial r

egim

ein

his

cou

ntry

. A

lthou

gh im

port

dut

ies

on s

uch

prod

ucts

wer

e re

lativ

ely

high

in C

ambo

dia

– on

ave

rage

34 p

er c

ent

for

garm

ents

and

14

per

cent

onya

rn a

nd f

abri

cs –

mos

t C

ambo

dian

garm

ents

man

ufac

ture

rs w

ere

regi

ster

ed i

nves

tmen

t fi

rms

prod

ucin

gfo

rex

port

, and

thus

exe

mpt

fro

mpa

ying

dut

y on

impo

rted

raw

mat

eria

ls a

nd in

term

edia

te g

oods

. C

ambo

dia

had

conc

lude

d an

Agr

eem

ent R

elat

ing

toT

rade

in C

otto

n,W

ool,

Man

-mad

eFi

bre,

Non

-Cot

ton

Veg

etab

le F

ibre

and

Silk

Ble

nd T

extil

e, a

nd T

extil

e Pr

oduc

ts w

ith th

e U

nite

d St

ates

. T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t C

ambo

dia

wou

ld e

xten

d th

esa

me

pref

eren

tial t

arif

f ra

tes

acco

rded

to U

.S.-

orig

in te

xtile

and

app

arel

pro

duct

s un

der

the

Agr

eem

ent t

o al

l WT

O M

embe

rs o

n an

MFN

bas

is u

pon

acce

ssio

n.U

nder

the

term

s of

the

bila

tera

l ag

reem

ent,

the

Uni

ted

Stat

es h

adpl

aced

quan

titat

ive

rest

rict

ions

on

13 c

ateg

orie

s of

app

arel

fro

m C

ambo

dia.

E

xpor

ts o

f ce

rtai

n te

xtile

pro

duct

s to

Can

ada

wer

e al

sore

stra

ined

unde

r a

bila

tera

l ag

reem

ent.

An

EU

-Cam

bodi

a te

xtile

agr

eem

ent

allo

wed

quot

a-fr

ee a

cces

s to

the

EU

mar

ket,

but

set u

pdo

uble

-che

ckin

g (s

urve

illan

ce)

onni

ne c

ateg

orie

sas

wel

l as

adm

inis

trat

ive

coop

erat

ion,

with

the

view

tove

rify

and

asc

erta

in C

ambo

dian

orig

inof

the

good

s.

69 T

he r

epre

sent

ativ

e of

Cam

bodi

asa

id t

hat

the

draf

t L

awon

Cus

tom

s di

d no

t in

clud

e pr

ovis

ions

on

bord

er m

easu

res

as r

equi

red

by A

rtic

le 5

1-60

of t

heT

RIP

SA

gree

men

t. T

hene

cess

ary

bord

er m

easu

res

had

been

inc

orpo

rate

d in

the

Law

on M

arks

, T

rade

Nam

es a

nd A

cts

ofU

nfai

r C

ompe

titio

n (A

rtic

les

35-4

7).

In

addi

tion,

the

Law

on

Cop

yrig

hts

and

Rel

ated

Rig

hts

(Art

icle

63)

incl

uded

, by

refe

renc

e, a

ll bo

rder

mea

sure

s in

clud

ed in

the

Law

on

Mar

ks, T

rade

Nam

es a

nd A

cts

of U

nfai

r C

ompe

titio

n. H

e sa

w n

o ne

ed to

con

solid

ate

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Per

mit

for

fore

ign

Ser

vice

nt

Ch

ang

efe

eo

rkp

erm

itto

fact

th

at it

will

issu

edfo

ra

Ref

er t

o M

OS

AL

VY

se

63

wo

rker

s

ssc

hed

ule

:h

ori

zon

tal

com

mit

me

for

wre

flec

tth

eb

ep

erio

d

2004

No

TA

nee

ded

ct

ion

.

thes

e m

easu

res

in t

he n

ew L

aw o

n C

usto

ms,

as

the

draf

t L

aw (

Art

icle

8)

expl

icitl

y re

quir

ed t

he c

usto

ms

auth

oriti

es t

o ex

ecut

e al

l la

ws

of C

ambo

dia,

and

thi

s pr

ovis

ion

wou

ld b

e un

derp

inne

dby

a s

ub-D

ecre

e to

bepr

epar

ed b

y th

e D

epar

tmen

t of

Cus

tom

s an

d E

xcis

es, i

n co

llabo

ratio

nw

ith th

e M

inis

trie

s re

spon

sibl

e fo

r th

epr

otec

tion

of in

telle

ctua

l pro

pert

y.

70

Pres

ence

of

natu

ral p

erso

ns(4

) U

nbou

nd e

xcep

tfor

mea

sure

s co

ncer

ning

the

entr

y an

d te

mpo

rary

sta

y of

a n

atur

alpe

rson

who

falls

inon

e of

the

follo

win

gca

tego

ries

:

Bus

ines

s vi

sito

rs

Ana

tura

l per

son

who

:

-en

ters

C

ambo

dia

for

the

purp

oses

ofpa

rtic

ipat

ing

in

busi

ness

mee

tings

,es

tabl

ishi

ng

busi

ness

co

ntac

ts

incl

udin

gne

gotia

tions

for

the

sal

e of

serv

ices

and

/or

othe

r si

mila

r ac

tiviti

es;

-st

ays

in

Cam

bodi

a w

ithou

t re

ceiv

ing

inco

me

from

with

in C

ambo

dian

sou

rces

;-

does

not

eng

age

in m

akin

gdi

rect

sal

es t

oth

e ge

nera

l pub

lic o

r su

pply

ing

serv

ices

.

Ent

ryvi

sa f

orbu

sine

ssvi

sito

rs s

hall

be v

alid

for

a pe

riod

of90

day

s fo

r an

initi

al s

tay

of30

days

,whi

ch m

ay b

e ex

tend

ed.

(4)

Unb

ound

, exc

ept f

orm

easu

res

affe

ctin

gth

e ca

tego

ries

ref

erre

d to

und

er m

arke

tac

cess

.

64

Pers

ons

resp

onsi

ble

for

setti

ngup

of

a co

mm

erci

al e

stab

lishm

ent:

Pers

ons

wor

king

in a

n ex

ecut

ive

or m

anag

eria

lpo

sitio

n,re

ceiv

ing

rem

uner

atio

n fr

oman

entit

y as

def

ined

belo

w,w

ho a

re

resp

onsi

ble

for

the

setti

ng u

p, in

Cam

bodi

a, o

f a

com

mer

cial

pre

senc

e of

a

serv

ice

prov

ider

of a

Mem

ber,

that

will

su

ppor

t em

ploy

men

t of

pers

ons

desc

ribe

din

a, b

, and

c b

elow

. T

he s

ubje

ct p

erso

nsar

eno

t sub

ject

to a

max

imum

dur

atio

nof

stay

.

Intr

a-C

orpo

rate

Tra

nsfe

rees

Nat

ural

per

sons

who

hav

e be

en e

mpl

oyed

by a

ju

ridi

calp

erso

nof

ano

ther

mem

ber

for

a pe

riod

of

not l

ess

than

1 ye

aran

d w

ho s

eek

tem

pora

ry e

ntry

to p

rovi

de s

ervi

ces

thro

ugh

a br

anch

, sub

sidi

ary

and

affi

liate

in C

ambo

dia

and

who

are

:

a)E

xecu

tives

: with

out r

equi

ring

com

plia

nce

with

labo

ur m

arke

t tes

ts, p

erso

ns w

ithin

an

orga

niza

tion

who

pri

mar

ily d

irec

t the

man

agem

ent o

f th

e or

gani

zatio

n, e

xerc

ise

wid

e la

titud

e in

deci

sion

-mak

ing,

and

rece

ive

only

gen

eral

sup

ervi

sion

or

dire

ctio

n fr

omhi

gher

-lev

el e

xecu

tives

, the

bo

ard

of d

irec

tors

, or

shar

ehol

ders

of

the

busi

ness

. E

xecu

tives

wou

ldno

t dir

ectly

perf

orm

task

s re

late

d to

the

actu

al s

uppl

yof

a s

ervi

ceor

serv

ices

of

the

orga

niza

tion.

65

b)M

anag

ers:

with

out r

equi

ring

com

plia

nce

with

labo

ur m

arke

t tes

ts, n

atur

al p

erso

nsem

ploy

edby

a ju

ridi

cal e

ntity

and

who

poss

ess

know

ledg

e at

an

adva

nced

leve

lof

expe

rtis

e or

prop

riet

ary

know

ledg

eof

a

juri

dica

l ent

ity p

rodu

ct, s

ervi

ce, r

esea

rch,

equi

pmen

t, te

chni

ques

,or

man

agem

ent,

and

who

prim

arily

dir

ect t

he o

rgan

izat

ion

or a

dep

artm

ent o

f th

eor

gani

zatio

n;su

perv

ise

and

cont

rolt

he w

ork

ofot

her

supe

rvis

ory,

pro

fess

iona

lor

man

ager

ial

empl

oyee

s; h

ave

the

auth

ority

to h

ire

and

fire

or r

ecom

men

d hi

ring

, fir

ing

or o

ther

pers

onne

l act

ions

; and

exe

rcis

edi

scre

tiona

ry a

utho

rity

ove

r da

y-to

-day

oper

atio

ns.

The

y do

not

incl

ude

firs

t-lin

esu

perv

isor

s, u

nles

s th

e em

ploy

ees

supe

rvis

ed a

re p

rofe

ssio

nals

, nor

do

they

incl

ude

empl

oyee

s w

ho p

rim

arily

per

form

task

sne

cess

ary

for

the

supp

lyof

the

serv

ice.

c) S

peci

alis

ts:

Nat

ural

per

sons

, with

in a

nor

gani

zatio

nw

ho p

osse

sskn

owle

dge

at a

nad

vanc

ed le

vel o

f co

ntin

ued

expe

rtis

e an

dw

hopo

sses

s pr

opri

etar

y kn

owle

dge

of th

eor

gani

zatio

n's

serv

ices

, res

earc

heq

uipm

ent,

tech

niqu

es,o

r m

anag

emen

t.

Tem

pora

ry r

esid

ency

and

wor

kpe

rmit

isre

quir

edfo

r th

e na

tura

lper

sons

in th

eca

tego

ries

def

ined

und

er in

tra-

corp

orat

etr

ansf

eree

s. S

uch

perm

its a

re is

sued

for

tw

o ye

ars

and

may

be

rene

wed

ann

ually

up

to m

axim

um o

f to

tal f

ive

year

s.

66

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

s70o

f tw

o y

e

67

ars

Insu

ran

ce a

nd

re

-in

sura

nce

Ser

vice

ssc

hed

ule

:fi

nan

cial

serv

ices

71

Rev

ise

law

on

Insu

ran

ce a

nd

p

rep

are

reg

ula

tio

ns

2004

-200

7T

A is

bei

ng

p

rovi

ded

.

Furt

her

TA

71 (a)

Lif

e in

sura

nce

serv

ices

(CPC

8121

1)(1

)N

atur

al o

rju

ridi

cal p

erso

n ca

n en

ter

into

cont

ract

onl

yw

ith th

e in

sura

nce

com

pani

es li

cens

ed to

car

ry o

ut in

sura

nce

busi

ness

in th

eK

ingd

om o

f C

ambo

dia

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

e ho

rizo

ntal

sec

tion

(1)

Non

e

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion

(b)

Non

-lif

e in

sura

nce

serv

ices

(CPC

812

9)(1

)N

one

for

mar

ine,

avi

atio

n, a

nd tr

ansp

ort

insu

ranc

e fr

om 1

Jan

uary

2009

,or

once

a

law

has

been

pas

sed,

the

appr

opri

ate

regu

latio

ns in

pla

ce a

nd a

loca

l fir

mau

thor

ized

,whi

chev

er c

omes

fir

st.

Unt

il th

e co

nditi

ons

abov

e ar

e m

et,

mar

ine,

avi

atio

n an

d tr

ansp

ort i

nsur

ance

serv

ices

may

be

supp

lied

by in

sura

nce

com

pani

es li

cens

ed to

car

ry o

ut in

sura

nce

busi

ness

in th

eK

ingd

om o

f C

ambo

dia.

For

all o

ther

non-

life

insu

ranc

e se

rvic

es,

natu

ral o

rju

ridi

cal p

erso

ns c

an e

nter

into

cont

ract

onl

yw

ith th

e in

sura

nce

com

pani

es li

cens

ed to

car

ry o

ut in

sura

nce

busi

ness

in th

eK

ingd

om o

f C

ambo

dia.

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

e ho

rizo

ntal

sec

tion

(1)

Non

e

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion

68

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts

69

and

sta

tus

need

ed

(c)

Rei

nsur

ance

and

retr

oces

sion

(CPC

812

99)

(1)

Non

e, e

xcep

t com

pani

es m

ust r

eins

ure

20%

of th

eir

risk

in C

ambo

dia

Re

until

31

Dec

embe

r20

08.

Insu

ranc

e co

ntra

cts

of to

tal s

um in

sure

dof

less

than

or e

qual

to U

SD 5

00,0

00 m

ust b

ere

insu

red

loca

llyun

til 3

1D

ecem

ber

2008

. T

here

afte

r,N

one

(2)

Non

e(3

)N

one,

exc

ept c

ompa

nies

mus

t rei

nsur

e20

%of

thei

rri

sk in

Cam

bodi

a R

e un

til

1 Ja

nuar

y20

08.

The

reaf

ter,

Non

e.(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion.

(d

)Se

rvic

es a

uxili

ary

to in

sura

nce

(inc

ludi

ngbr

okin

g an

d ag

ency

serv

ices

)(C

PC 8

140)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Mo

ney

an

d

cap

ital

Ser

vice

sch

edfi

nan

ci

Dra

ftla

wg

ove

rnm

ent

secu

riti

esan

TA

ispr

ovid

e

70

mar

kets

su

le:

al

so

n do

nn

on

-go

vern

men

tal

2005

bein

gd.

Furt

her

TA

Nee

ded

72

71 (j)

Settl

emen

t and

cle

arin

g se

rvic

esfo

rfi

nanc

ial a

sset

s, in

clud

ing

secu

ritie

s, d

eriv

ativ

e pr

oduc

ts,

and

othe

r ne

gotia

ble

inst

rum

ents

;

(f)

Tra

ding

for

ow

n ac

coun

tor

for

acco

unto

f cu

stom

ers,

whe

ther

on a

n ex

chan

ge, i

n an

over

-the

-co

unte

r m

arke

t or

othe

rwis

e,th

efo

llow

ing

(A)

mon

ey m

arke

t ins

trum

ents

(inc

ludi

ng c

hequ

es,b

ills,

cert

ific

ates

of

depo

sits

);(B

) f

orei

gn e

xcha

nge

(C)

der

ivat

ive

prod

ucts

incl

udin

g, b

ut n

otlim

ited

to,

futu

res

and

optio

ns;

(D)

exc

hang

e ra

te a

nd in

tere

stra

te in

stru

men

ts, i

nclu

ding

prod

ucts

suc

h as

sw

aps,

forw

ard

rate

agr

eem

ents

;(E

) t

rans

fera

ble

secu

ritie

s;(F

)ot

her

nego

tiabl

e in

stru

men

tsan

d fi

nanc

ial a

sset

s, in

clud

ing

bulli

on

(g)

Part

icip

atio

n in

issu

esof

all

kind

sof

sec

uriti

es, i

nclu

ding

unde

rwri

ting

and

plac

emen

t as

agen

cy (

whe

ther

pub

licly

or

priv

atel

y) a

ndpr

ovis

ion

ofse

rvic

es r

elat

ed to

suc

h is

sues

;

(h)

Mon

ey b

roki

ng;

(i)

Ass

et m

anag

emen

t, su

ch a

s ca

shor

por

tfol

io m

anag

emen

t, al

lfo

rms

of c

olle

ctiv

e in

vest

men

tm

anag

emen

t, pe

nsio

nfu

ndm

anag

emen

t, cu

stod

ial,

depo

sito

ry a

nd tr

usts

ervi

ces;

(1)

Unb

ound

(2)

Non

e(3

)U

nbou

nd f

or s

ubse

ctor

s (f

) –

(l),

until

the

Gov

ernm

ent o

f C

ambo

dia

dete

rmin

esw

hat t

ypes

of e

ntiti

es c

an c

ondu

ct th

ese

serv

ices

, the

rel

ated

law

s an

dre

gula

tion

are

esta

blis

hed,

and

suc

hbu

sine

ss is

au

thor

ized

by

the

gove

rnm

ento

r ot

her

rele

vant

des

igna

ted

auth

ority

.(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

serv

ices

72in

gin

secu

riti

es,b

ear

min

dth

atit

will

trig

ger

co

mm

itm

ents

MIN

IST

RY

OF

AG

RIC

ULT

UR

E, F

OR

ES

TR

YA

ND

FIS

HE

RIE

S

Pes

tici

des

risk

WP

Rep

ort

p

ara.

7D

evel

op

cu

nd

erta

ke r

isk

asse

ssm

ent

573

(see

als

o

apac

ity

to

asse

ssm

ent

Jun

e 20

05

TA

nee

ded

T

A t

o b

e p

rocu

red

un

der

Au

stra

lia p

roje

ct (

CA

TA

F)

73 T

he M

inis

try

of A

gric

ultu

re,

Fore

stry

and

Fis

heri

es (

MA

FF)

issu

ed l

icen

ses

(aut

hori

zatio

n le

tters

) fo

r im

port

atio

n of

agr

icul

tura

l in

puts

, pr

inci

pally

pes

ticid

es a

nd f

ertil

izer

, in

ac

cord

ance

with

the

Sub

-Dec

ree

on S

tand

ards

for

and

Man

agem

ent

of A

gric

ultu

ral

Mat

eria

ls o

f 28

Oct

ober

199

8.

Firm

s w

ishi

ng t

o im

port

sho

uld

be r

egis

tere

dw

ith t

he M

inis

try

ofC

omm

erce

and

the

prod

ucts

shou

ld b

e re

gist

ered

and

aut

hori

zed

by th

e M

inis

try

ofA

gric

ultu

re, F

ores

try

and

Fish

erie

s (M

AFF

).A

tpre

sent

,15

com

pani

es w

ere

auth

oriz

ed to

impo

rtag

ricu

ltura

l in

puts

. R

egis

trat

ion

was

als

o re

quir

edfo

r th

e pr

oduc

ts t

obe

im

port

ed.

The

qua

ntity

of

pest

icid

es i

mpo

rted

by

indi

vidu

al c

ompa

nies

cou

ld b

e re

stri

cted

due

to

safe

tyre

quir

emen

ts, i

nclu

ding

app

ropr

iate

sto

rage

faci

litie

s, a

s w

ell

as d

omes

ticde

man

d.

The

Dep

artm

ent

of A

gron

omy

and

Agr

icul

tura

l L

and

Impr

ovem

ent

at t

he M

AFF

wou

ld e

stim

ate

the

need

for

pes

ticid

es o

n an

ann

ual

basi

s, t

akin

g in

to a

ccou

nt f

acto

rs s

uch

as t

he s

ize

of t

he c

ultiv

ated

are

as,

type

of

crop

pla

nted

, an

d se

ason

al i

nfec

tion

ratio

s.

In t

he f

utur

e,C

ambo

dia

was

con

side

ring

eith

er t

o al

low

reg

iste

red

good

s in

to w

areh

ouse

s an

d re

leas

e fo

r sa

le o

r us

e af

ter

insp

ectio

n, o

r to

allo

w f

or a

ccre

dita

tion

ofpe

stic

ides

thr

ough

bila

tera

lag

reem

ents

with

the

cou

ntri

es o

f or

igin

. C

ambo

dia

was

not

in

a po

sitio

n to

und

erta

ke r

isk

asse

ssm

ent

at p

rese

nt,

and

wou

ld w

elco

me

assi

stan

ce i

n de

velo

ping

suc

h ca

paci

ty.

Fert

ilize

r im

port

s w

ere

licen

ced

to m

inim

ize

the

envi

ronm

enta

l im

pact

of

soil

degr

adat

ion,

aci

dity

or

salin

ity.

74 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

that

, no

late

r th

an 1

June

200

5, C

ambo

dia

wou

ld e

limin

ate

quan

titat

ive

rest

rict

ions

on

the

impo

rtat

ion

of f

ertil

izer

s, p

estic

ides

and

oth

erag

ricu

ltura

l in

puts

as

desc

ribe

d in

par

agra

phs

75 a

nd 7

6 an

d es

tabl

ish

a W

TO

-con

sist

ent

met

hod

of r

egis

trat

ion

and

revi

ewof

im

port

ed a

gric

ultu

ral

chem

ical

s. R

equi

rem

ents

rel

ated

to t

hesa

fe s

tora

ge a

nddo

mes

tic d

istr

ibut

ion

of t

hese

prod

ucts

wou

ld a

pply

only

to

dom

estic

dis

trib

utor

sor

to

impo

rter

s us

ing

bond

ed s

tora

ge p

rior

to

dom

estic

dis

trib

utio

n.H

efu

rthe

r co

nfir

med

tha

t, in

the

con

text

of

Cam

bodi

a's

impl

emen

tatio

n of

the

WT

OA

gree

men

t on

Tec

hnic

al B

arri

ers

to T

rade

, tha

t fr

om 1

Jan

uary

200

7 C

ambo

dia

wou

ldre

ly o

n th

epr

ovis

ions

of

that

Agr

eem

ent

to r

egul

ate

dom

estic

and

int

erna

tiona

l tr

ade

in t

hese

ite

ms,

and

tha

t th

e co

mm

itmen

t co

ntai

ned

inpa

ragr

aph

50 w

ould

als

o ap

ply

to r

equi

rem

ents

for

regi

stra

tion

and

licen

sing

fee

s fo

r im

port

ers

of a

gric

ultu

rali

nput

s fr

om 1

Jun

e 20

05.

The

Wor

king

Part

y to

okno

teof

thes

e co

mm

itmen

ts.

72

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

par

a 77

74)

QR

s o

n

fert

ilize

r

oth

erin

pu

ts

tE

limin

ate

QR

ses

tab

lish

WT

O

for

reg

istr

are

view

s,p

esti

cid

es a

nd

ag

.

WP

Rep

or

par

a. 7

7 an

d-

con

sist

ent

met

ho

ds

tio

n a

nd

Jun

e 20

05

TA

nee

ded

T

A t

o b

e p

rocu

red

un

der

Au

stra

lia p

roje

ct (

CA

TA

F)

Fis

hin

g

WP

A

nn

exI

Att

ach

men

t

Th

e d

raft

was

sen

t b

ack

fro

m T

he

Nat

ion

al

Ass

emb

ly. I

t w

illb

ere

-deb

ated

atM

inis

ters

to

ref

lect

issu

es o

f d

ecen

tral

izat

ion

.

Rep

ort

Dra

ft F

ish

erie

s L

aw20

04N

o T

A n

eed

ed

the

Co

un

cilo

f

SP

S

WP

T

able

11,

p

ara

14275

Des

ign

pla

nt

pes

t an

d d

isea

se c

on

tro

l p

rog

ram

an

d o

ther

2004

bei

ng

pro

vid

ed

fro

m N

Z A

id.

Mo

re T

A n

eed

ed

ll ta

ke p

lace

.

Au

said

SP

S C

apac

ity

Bu

ildin

g P

roje

ct h

as s

ho

wn

inte

rest

in h

elp

ing

. SP

S A

ctio

n is

alr

ead

y p

rep

ared

by

MA

FF

.

Rep

ort

mea

sure

s

So

me

TA

sar

eM

AF

F is

no

t su

re t

hat

NZ

Aid

II w

i

73

MIN

IST

RY

OF

IND

US

TR

Y, M

INE

AN

D E

NE

RG

Y

75 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

that

Cam

bodi

a w

ould

impl

emen

t pro

gres

sive

ly th

e pr

ovis

ions

of

the

WT

O A

gree

men

ton

the

App

licat

ion

of S

anita

ry a

nd P

hyto

sani

tary

Mea

sure

sw

ithin

the

timet

able

pro

vide

d fo

rin

the

Act

ion

Plan

for

Im

plem

enta

tion

in T

able

11,

and

wou

ld e

nsur

e fu

ll im

plem

enta

tion

of th

e A

gree

men

t no

late

r th

an 1

Jan

uary

200

8,an

dw

ith th

eun

ders

tand

ing

that

dur

ing

this

peri

od th

e sc

ope

of im

plem

enta

tion

ofot

her

aspe

cts

of th

e A

gree

men

t, as

des

crib

edin

par

agra

ph14

1w

ould

be a

pplie

d by

Cam

bodi

a.H

efu

rthe

r co

nfir

med

tha

t C

ambo

dia

shou

ldco

nsul

t w

ithW

TO

Mem

bers

upon

requ

est

if t

hey

deem

ed t

hat

any

mea

sure

s ap

plie

d du

ring

the

tra

nsiti

on p

erio

d af

fect

ed t

heir

tra

dene

gativ

ely.

The

Wor

king

Part

yto

ok n

ote

of th

ese

com

mitm

ents

.

Top

icW

TO

Ref

eren

ecT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

TB

T

WP

Rep

ort

Tab

le10

par

a13

op

erat

ion

al t

he

TB

T

En

qu

iry

Po

i, 176

Est

ablis

h a

nd

mak

e

nt

2004

T

A n

eed

ed

TB

TW

PR

epo

rp

ara

12777

AN

asse

ssm

ent

agre

emen

ts t

o a

ll

2004

No

TA

nee

ded

t

Ext

end

AS

Eco

nfo

rmit

y

WT

O m

emb

ers

(wit

hM

OC

)

74

TB

T

WP

Rep

ort

Tab

le 1

0,

par

a 13

178

Su

bm

issi

on

of

stat

emen

t o

n

imp

lem

enta

tio

n (

per

G

/TB

T/1

)

Dat

e o

f ac

cess

ion

TA

nee

ded

76 T

he r

epre

sent

ativ

e of

Cam

bodi

ast

ated

that

Cam

bodi

a w

ould

prog

ress

ivel

y im

plem

entt

he A

gree

men

t on

Tec

hnic

alB

arri

ers

toT

rade

in a

ccor

danc

e w

ith th

e ac

tion

plan

in T

able

10an

d w

ith th

e un

ders

tand

ing

that

duri

ng th

ispe

riod

the

scop

eof

impl

emen

tatio

n of

othe

r as

pect

sof

the

Agr

eem

ent,

as d

escr

ibed

inpa

ragr

aph

129

wou

ld b

e ap

plie

dby

Cam

bodi

a. F

ull

impl

emen

tatio

nw

ill s

tart

fro

m 1

Jan

uary

200

7 w

ithou

t rec

ours

e to

any

fur

ther

tran

sitio

nal p

erio

d. T

heW

orki

ng P

arty

took

note

of

this

com

mitm

ent.

77 C

ambo

dia

had

been

a m

embe

rof

the

Int

erna

tiona

l O

rgan

izat

ion

for

Stan

dard

izat

ion

(ISO

) si

nce

1 Ja

nuar

y 19

95 a

ndha

d ra

tifie

d th

e A

SEA

N F

ram

ewor

kA

gree

men

t on

Mut

ual

Rec

ogni

tion

Arr

ange

men

ts.

Impo

rted

goo

ds w

ere

subj

ect

to t

he s

ame

insp

ectio

n pr

oces

s as

dom

estic

ally

-pro

duce

d go

ods,

and

Cam

bodi

a w

ould

ext

end

any

Con

form

ity A

sses

smen

tA

gree

men

ts,

in p

artic

ular

tho

se f

ores

een

unde

r th

eA

SEA

N,

to a

ll M

embe

rs o

f th

eW

TO

. C

ambo

dia

reco

gniz

ed c

ertif

icat

es f

rom

thi

rd c

ount

ries

' cer

tific

atio

n bo

dies

pro

vide

dth

atth

ese

bodi

es h

ad r

ecei

ved

form

al a

ccre

dita

tion

from

int

erna

tiona

l or

reg

iona

l ac

cred

itatio

n bo

dies

, or

wer

e si

gnat

orie

s to

a m

utua

l re

cogn

ition

arr

ange

men

t. I

n th

e ca

se o

fph

arm

aceu

tical

pro

duct

s, la

bora

tory

test

ing

in C

ambo

dia

was

req

uire

dpr

ior

to r

egis

trat

ion

to c

heck

the

conf

orm

ity o

f th

e sa

mpl

es.

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Com

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TB

T

WP

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Jun

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prov

ide

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no

r ,31

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200

-200

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T10

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131

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lleti

n

2004

TA

nee

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W

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ple

men

tati

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2004

-2be

ing

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ided

. Fur

ther

T

A n

eede

d

78 T

he r

epre

sent

ativ

e of

Cam

bodi

ast

ated

that

Cam

bodi

a w

ould

prog

ress

ivel

y im

plem

entt

he A

gree

men

t on

Tec

hnic

alB

arri

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toT

rade

in a

ccor

danc

e w

ith th

e ac

tion

plan

in T

able

10an

d w

ith th

e un

ders

tand

ing

that

duri

ng th

ispe

riod

the

scop

eof

impl

emen

tatio

n of

othe

r as

pect

sof

the

Agr

eem

ent,

as d

escr

ibed

inpa

ragr

aph

129

wou

ld b

e ap

plie

dby

Cam

bodi

a. F

ull

impl

emen

tatio

nw

ill s

tart

fro

m 1

Jan

uary

200

7 w

ithou

t rec

ours

e to

any

fur

ther

tran

sitio

nal p

erio

d. T

heW

orki

ng P

arty

took

note

of

this

com

mitm

ent.

Top

icW

TO

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eren

ceT

ask

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dlin

ea

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nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

TR

IPW

PR

epo

rtT

able

12

and

D

raft

su

b-d

eim

ple

men

tin

2004

T

A

S

par

a 20

679

cree

gth

eL

aw o

n P

aten

ts

nee

ded

TR

IPS

po

rp

ara

18580

he

sm

ust

rog

ram

ss y

be

elig

ible

fo

r p

aten

t p

rote

ctio

n

2004

T

A n

eed

edW

PR

et

Su

b-d

ecre

eim

ple

men

tin

gt

Law

on

Pat

ent

spec

ify

that

com

pu

ter

pan

db

usi

nes

met

ho

ds

ma

76

79 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t C

ambo

dia

wou

ld a

pply

the

Agr

eem

ent

on T

rade

-Rel

ated

Asp

ects

of

Inte

llect

ual

Prop

erty

Rig

hts

no l

ater

tha

n 1

Janu

ary

2007

acco

rdin

g to

the

Act

ion

Plan

in T

able

12

with

the

unde

rsta

ndin

g th

at d

urin

g th

is p

erio

d pr

otec

tion

for

inte

llect

ual p

rope

rty

righ

ts li

sted

in p

arag

raph

s 20

4 an

d 20

5 w

ould

be

appl

ied

inC

ambo

dia.

The

Wor

king

Part

y to

okno

teof

this

com

mitm

ent.

80 T

he r

epre

sent

ativ

e of

Cam

bodi

a sa

id t

hat

the

Law

on

Pate

nts,

Util

ity M

odel

s an

dIn

dust

rial

Des

igns

had

bee

n pr

omul

gate

don

22

Janu

ary

2003

.D

raft

ing

of i

mpl

emen

ting

regu

latio

nsun

der

this

Law

wou

ld c

omm

ence

in

the

firs

t qu

arte

r of

200

3.

The

Law

aff

orde

d pa

tent

prot

ectio

n to

inv

entio

ns w

hich

inv

olve

d an

inv

entiv

e st

ep a

ndw

ere

indu

stri

ally

appl

icab

le.

Pat

ents

cou

ldno

t be

iss

ued

for

disc

over

ies,

sci

entif

ic t

heor

ies

and

mat

hem

atic

alm

etho

ds;

sch

emes

, ru

les

and

met

hods

for

doi

ngbu

sine

ss,

perf

orm

ing

inte

llect

ual

activ

ities

, or

play

ing

gam

es, a

nd c

ompu

ter

prog

ram

s; d

iagn

ostic

, the

rape

utic

and

sur

gica

l met

hods

for

the

trea

tmen

t of

hum

an b

eing

s an

d an

imal

s; in

vent

ions

con

trar

y to

pub

lic o

rder

or m

oral

ity;

and

bio

logi

cal

met

hods

for

bre

edin

gpl

ants

and

ani

mal

s, o

ther

tha

n m

icro

biol

ogic

al m

etho

ds, a

s w

ell

as p

rodu

cts

deri

ved

from

the

se m

etho

ds.

In r

espo

nse

to a

spe

cifi

cqu

estio

n co

ncer

ning

the

exc

lusi

ons,

he

adde

d th

at t

he a

lgor

ithm

s us

ed i

n co

mpu

ter

prog

ram

s, n

ot t

he p

rogr

amm

espe

r se

, wer

e in

elig

ible

for

pat

ent

prot

ectio

n, a

nd t

hat

"sch

emes

or

met

hods

for

doi

ng b

usin

ess"

wer

e on

ly i

nelig

ible

for

pat

ent

prot

ectio

n to

the

ext

ent

that

the

y w

ere

lack

ing

indu

stri

al a

pplic

atio

n.

The

sedi

stin

ctio

ns w

ould

be

clar

ifie

d in

the

impl

emen

ting

regu

latio

ns to

the

Law

.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

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tatu

s

MIN

IST

RY

OF

INT

ER

IOR

Res

idS

ervi

cesc

hed

uh

ori

zon

tal

Dev

elo

p a

nd

im

ple

men

tre

per

mit

sco

nsi

wit

h t

he

ho

77

ency

per

mit

s le:

com

mit

men

t

sid

ency

sten

tri

zon

tal

2004

T

A n

eed

ed

81

Pres

ence

of

natu

ral p

erso

ns(4

) U

nbou

nd e

xcep

tfor

mea

sure

s co

ncer

ning

the

entr

y an

d te

mpo

rary

sta

y of

a n

atur

alpe

rson

who

falls

inon

e of

the

follo

win

gca

tego

ries

:

Bus

ines

s vi

sito

rs

Ana

tura

l per

son

who

:

-en

ters

C

ambo

dia

for

the

purp

oses

ofpa

rtic

ipat

ing

in

busi

ness

mee

tings

,es

tabl

ishi

ng

busi

ness

co

ntac

ts

incl

udin

gne

gotia

tions

for

the

sal

e of

serv

ices

and

/or

othe

r si

mila

r ac

tiviti

es;

-st

ays

in

Cam

bodi

a w

ithou

t re

ceiv

ing

inco

me

from

with

in C

ambo

dian

sou

rces

;-

does

not

eng

age

in m

akin

gdi

rect

sal

es t

oth

e ge

nera

l pub

lic o

r su

pply

ing

serv

ices

.

Ent

ryvi

sa f

orbu

sine

ssvi

sito

rs s

hall

be v

alid

for

a pe

riod

of90

day

s fo

r an

initi

al s

tay

of30

days

,whi

ch m

ay b

e ex

tend

ed.

(4)

Unb

ound

, exc

ept f

orm

easu

res

affe

ctin

gth

e ca

tego

ries

refe

rred

to u

nder

mar

ket a

cces

s.

78

Pers

ons

resp

onsi

ble

for

setti

ngup

of

a co

mm

erci

al e

stab

lishm

ent:

Pers

ons

wor

king

in a

n ex

ecut

ive

or m

anag

eria

lpo

sitio

n, re

ceiv

ing

rem

uner

atio

n fr

om a

n en

tity

as d

efin

ed b

elow

, who

are

resp

onsi

ble

for t

hese

tting

up,

in C

ambo

dia,

of a

com

mer

cial

pres

ence

of a

ser

vice

pro

vide

r of a

Mem

ber,

that

w

ill s

uppo

rt e

mpl

oym

ent o

f per

sons

des

crib

ed in

a, b

, and

c b

elow

. T

he s

ubje

ct p

erso

ns a

re n

otsu

bjec

t to

a m

axim

um d

urat

ion

of s

tay.

Intr

a-C

orpo

rate

Tra

nsfe

rees

Nat

ural

per

sons

who

hav

e be

en e

mpl

oyed

by a

ju

ridi

calp

erso

nof

ano

ther

mem

ber

for

a pe

riod

of n

ot le

ss th

an 1

yea

r an

d w

ho s

eek

tem

pora

ryen

try

to p

rovi

de s

ervi

ces

thro

ugh

a br

anch

,su

bsid

iary

and

affi

liate

in C

ambo

dia

and

who

are:

a)E

xecu

tives

: with

out r

equi

ring

com

plia

nce

with

labo

ur m

arke

t tes

ts, p

erso

ns w

ithin

an

orga

niza

tion

who

pri

mar

ily d

irec

t the

man

agem

ent o

f th

e or

gani

zatio

n, e

xerc

ise

wid

ela

titud

e in

dec

isio

n-m

akin

g, a

nd r

ecei

veon

lyge

nera

l sup

ervi

sion

or

dire

ctio

nfr

om h

ighe

r-le

vel e

xecu

tives

, the

boa

rdof

dire

ctor

s, o

r sh

areh

olde

rs o

fth

e bu

sine

ss.

Exe

cutiv

es w

ould

notd

irec

tly p

erfo

rm ta

sks

rela

ted

to th

e ac

tual

supp

lyof

a s

ervi

ce o

r se

rvic

es o

f th

eor

gani

zatio

n.

79

80

s81co

mm

itm

ents

b)

Man

ager

s:w

ithou

t req

uiri

ngco

mpl

ianc

ew

ith la

bour

mar

ket t

ests

, nat

ural

per

sons

empl

oyed

by a

juri

dica

l ent

ity a

nd w

hopo

sses

skn

owle

dge

at a

n ad

vanc

ed le

vel o

f ex

pert

ise

orpr

opri

etar

ykn

owle

dge

of a

juri

dica

l ent

itypr

oduc

t, se

rvic

e, r

esea

rch,

equ

ipm

ent,

tech

niqu

es, o

r m

anag

emen

t,an

dw

ho p

rim

arily

dire

ct th

e or

gani

zatio

nor

a d

epar

tmen

t of

the

orga

niza

tion;

sup

ervi

se a

nd c

ontr

ol th

ew

ork

ofot

her

supe

rvis

ory,

prof

essi

onal

or

man

ager

ial

empl

oyee

s; h

ave

the

auth

ority

to h

ire

and

fire

or r

ecom

men

dhi

ring

, fir

ing

orot

her

pers

onne

lac

tions

; and

exe

rcis

e di

scre

tiona

ry a

utho

rity

over

day

-to-

day

oper

atio

ns.

The

y do

not

incl

ude

firs

t-lin

e su

perv

isor

s, u

nles

s th

eem

ploy

ees

supe

rvis

edar

e pr

ofes

sion

als,

nor

do

they

incl

ude

empl

oyee

sw

ho p

rim

arily

perf

orm

task

sne

cess

ary

for

the

supp

lyof

the

serv

ice.

c)Sp

ecia

lists

: N

atur

al p

erso

ns, w

ithin

an

orga

niza

tion

who

pos

sess

know

ledg

e at

an

adva

nced

leve

l of

cont

inue

d ex

pert

ise

and

who

poss

ess

prop

riet

ary

know

ledg

e of

the

orga

niza

tion'

s se

rvic

es, r

esea

rch

equi

pmen

t,te

chni

ques

, or

man

agem

ent.

Tem

pora

ry r

esid

ency

and

wor

kpe

rmit

isre

quir

edfo

r th

e na

tura

lper

sons

in th

eca

tego

ries

def

ined

und

er in

tra-

corp

orat

etr

ansf

eree

s. S

uch

perm

its a

re is

sued

for

two

year

s an

d m

ay b

e re

new

ed a

nnua

lly u

p to

max

imum

of

tota

l fiv

e ye

ars.

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2004

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mit

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2004

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ho

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8182 T

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bodi

a co

nfir

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m a

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Agr

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in A

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of

the

GA

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othe

rW

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eem

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in

the

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ess

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ing

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ion,

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ldbe

oper

atio

nal b

y D

ecem

ber

2004

. In

add

ition

, the

Com

mer

cial

Cou

rt s

yste

m w

ould

be e

stab

lishe

d by

1 Ja

nuar

y20

05.

The

Wor

king

Part

y to

ok n

ote

of th

is c

omm

itmen

t.

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eren

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nce

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ts a

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tatu

s

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il L

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nex

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raft

an

d im

ple

men

tC

ivil

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ce

TA

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ach

men

td

ura

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2004

isbe

ing

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min

al L

awep

ort

Att

ach

men

t

Dra

ft C

rim

inal

Co

de

2005

Ais

bein

gpr

ovid

ed.

WP

RA

nn

ex I

T

Cri

min

al L

awo

rtn

alP

roce

du

ral C

od

e 20

05T

A is

bei

ng

prov

ided

.W

PR

epA

nn

ex I

Att

ach

men

t

Dra

ft C

rim

i

MIN

IST

RY

OF

LA

BO

R

Mo

vem

ent

of

fore

ign

lab

or

ho

rizo

nta

lco

mm

itm

ent

clas

sifi

cati

on

s fo

r in

tra-

corp

ora

te

2004

TA

to

be

sou

gh

t fr

om

ILO

an

do

ther

do

no

rs

Mo

ve t

o 2

005

Ser

vice

ssc

hed

ule

:

s

Est

ablis

h

tran

sfer

ees

Mo

vem

ent

of

fore

ign

lab

or

sch

edu

le:

ho

rizo

nta

lco

mm

itm

ent

s

Co

de

to a

llow

wo

rkp

erm

its

to b

e g

ran

ted

fo

r 2

year

s

2004

No

TA

nee

ded

M

ove

to

200

5 S

ervi

ces

Am

end

Lab

or

82

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Em

plo

yme

agen

cies

Ser

vice

sch

edo

ther

bu

sin

ese

rvic

ep

lace

me

and

sup

serv

ices

of

per

son

nel

nt

su

le:

ss s: nt

ply

oA

men

dL

abo

rC

de

soas

toal

low

fo

r th

e o

per

atio

no

fth

ese

com

pan

ies

inC

amb

od

ia

2004

No

TA

nee

ded

M

ove

to

200

5

MIN

IST

RY

OF

LA

ND

MA

NA

GE

ME

NT,

UR

BA

ION

AN

D C

ON

ST

RU

CT

ION

N

IZA

T

Arc

hit

ectu

re

arch

itec

tura

lse

rvic

es83

on

in

by

Kh

mer

arc

hit

ect

for

big

pro

ject

s.”

2004

TA

nee

ded

Ser

vice

ssc

hed

ule

:R

epea

lpro

visi

Ro

yalD

ecre

ere

qu

irin

g “

sig

nat

ure

8383 (d)

Arc

hite

ctur

alse

rvic

es(c

onsu

lting

, pla

nnin

g or

desi

gnse

rvic

es)

(CPC

867

1)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Arc

hit

ectu

Ser

vice

sch

edu

le:

Dra

ftL

aw s

etti

ng

ou

t p

rofe

ssio

qu

ali

Co

nsi

der

Bo

ard

Arc

h

res

arch

itec

tura

lse

rvic

es

nal

fica

tio

ns.

esta

blis

hin

ga

of

itec

ts

2005

TA

nee

ded

Co

nst

ruct

ion

e: tio

nat

eden

gin

eeri

ng

serv

ices

84

wn

gp

rofe

ssio

nal

qu

alif

icat

ion

s

2005

TA

nee

ded

Ser

vice

ssc

hed

ul

con

stru

can

dre

l

Dra

ftL

aes

tab

lish

i

84

84 (e)

Eng

inee

ring

serv

ices

(CPC

867

2)(f

)In

tegr

ated

eng

inee

ring

ser

vice

s(C

PC 8

673)

(g)

Urb

anpl

anni

ng a

nd la

ndsc

ape

arch

itect

ural

ser

vice

s(C

PC 8

674)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

En

gin

eeri

nS

ervi

cesc

hed

ule

eng

inee

rin

g

Dra

ftL

aes

tab

lisp

rofe

ssio

85

gs

:

serv

ices

w hin

gn

alq

ual

ific

atio

ns

2005

TA

nee

ded

1.G

ener

al C

onst

ruct

ion

Wor

k fo

rB

uild

ings

(CPC

512

)2.

Gen

eral

Con

stru

ctio

nW

ork

for

Civ

il E

ngin

eeri

ng(C

PC 5

13)

3.In

stal

latio

n an

dA

ssem

bly

Wor

k(C

PC 5

14; C

PC 5

16)

4.B

uild

ing

Com

plet

ion

and

Fini

shin

g W

ork

(CPC

517

)5.

O

ther

(CPC

511

, 515

, 518

)

(1)

Unb

ound*

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

e ho

rizo

ntal

sec

tion

(1)

Unb

ound

*(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

alse

ctio

n

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

MIN

IST

RY

OF

HE

ALT

H

Imp

ort

s o

f p

hW

P R

epo

rt

Am

end

Law

Man

agem

ent

Pra

kas

No

.M

arch

199

9al

low

an

y fi

acti

vity

86

arm

aceu

tic

als

par

a 49

85,

5086

on

Dru

g

and

82 o

f 31

s

o a

s to

rm

to

en

gag

e in

imp

ort

Jun

e 20

05

TA

nee

ded

MIN

IST

RY

OF

PO

ST

AN

DT

ELE

CO

MM

UN

ICA

TIO

NS

85 B

ased

on

this

inf

orm

atio

n, a

Mem

ber

conc

lude

d th

at C

ambo

dia

had

plac

ed r

estr

ictio

nson

im

port

ed p

harm

aceu

tical

s an

d ve

teri

nary

med

icin

es w

hich

wou

ld n

otap

ply

todo

mes

ticpr

oduc

tion

of s

imila

r pr

oduc

ts.

Cam

bodi

aw

as th

eref

ore

requ

este

d to

am

end

its la

ws

to d

istin

guis

h ex

plic

itly

betw

een

the

righ

t to

beth

e im

port

erof

rec

ord,

and

the

righ

t to

dist

ribu

te.

The

regi

stra

tion

and

tech

nica

l req

uire

men

tscu

rren

tly p

lace

don

impo

rter

s sh

ould

be tr

ansf

erre

d to

dist

ribu

tors

, and

Cam

bodi

ash

ould

ens

ure

that

thes

ere

quir

emen

ts w

ould

be a

pplie

din

a m

anne

r th

at w

ould

res

ult i

n tr

eatm

ent n

o le

ss f

avou

rabl

e to

impo

rts

than

to s

imila

r do

mes

tic p

rodu

cts.

86 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t it

was

not

the

int

ent

ofhi

s G

over

nmen

t th

at t

he c

urre

nt r

equi

rem

ents

for

im

port

atio

n of

pha

rmac

eutic

als

or o

fve

teri

nary

med

icin

essh

ould

disc

rim

inat

e ag

ains

t im

port

s. I

n th

isre

gard

,he

furt

her

conf

irm

ed th

at n

o la

ter

than

1Ju

ne 2

005,

Cam

bodi

a w

ould

am

end

its le

gisl

atio

n, e

.g.,

the

Law

onD

rug

Man

agem

ent a

ndPr

akas

No.

82 o

f 31

Mar

ch 1

999

on "

Proc

edur

esfo

r E

xpor

ts a

nd I

mpo

rts

of P

harm

aceu

tical

s",

so a

sno

t to

abr

idge

the

rig

ht t

o im

port

and

to

expo

rt,

and

that

any

regi

ster

ed e

ntity

coul

dbe

the

impo

rter

or

expo

rter

of

reco

rd.

He

conf

irm

ed th

at f

rom

that

dat

e, C

ambo

dia

wou

ld e

nsur

e th

at it

s la

ws

and

regu

latio

nsre

latin

g to

the

righ

t to

trad

e in

good

s an

d al

l fee

s,

char

ges

or ta

xes

levi

edon

suc

hri

ghts

wou

ldbe

in f

ull c

onfo

rmity

with

its W

TO

obl

igat

ions

,inc

ludi

ng A

rtic

les

VII

I:I(

a), X

I:I

and

III:

2 an

d 4

of th

eG

AT

T19

94 a

nd th

at it

wou

ldal

soim

plem

ent s

uch

law

s an

d re

gula

tions

infu

ll co

nfor

mity

with

thes

e ob

ligat

ions

. He

conf

irm

ed in

par

ticul

ar th

at th

isw

as r

ecog

nize

das

with

out p

reju

dice

tore

quir

emen

ts th

at m

ight

bepl

aced

on

dist

ribu

tors

of

dom

estic

and

impo

rted

prod

ucts

to p

rese

rve

plan

t, an

imal

or

hum

an h

ealth

, lif

e, o

r sa

fety

. T

heW

orki

ng P

arty

took

note

of

thes

e co

mm

itmen

ts.

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icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Tel

e-

Co

Ser

vice

sch

edte

le-

com

mu

ni

Dra

ft L

aw o

nT

e-co

mm

un

icat

ion

sep

arat

es

TA

87

mm

un

icat

io

ns

su

le: ca

tio

n s

ervi

ces87

elth

ato

per

atio

ns

fro

m r

egu

lati

on

2004

isbe

ing

prov

ided

87 3.

Tel

ecom

mun

icat

ion

Serv

ices

Com

mitm

ents

are

take

n co

nsis

tent

with

"N

otes

for

Sch

edul

ing

Bas

ic T

elec

om S

ervi

ces

Com

mitm

ents

"(S

/GB

T/W

/2/R

ev.1

) an

d M

arke

t Acc

ess

Lim

itatio

ns o

nSp

ectr

um A

vaila

bilit

y" (

S/G

BT

/W/3

).(a

)V

oice

tele

phon

e se

rvic

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PC 7

521)

(b)

Pack

et-s

witc

hed

data

tran

smis

sion

ser

vice

s(C

PC 7

523*

*)(c

) C

ircu

it-sw

itche

dda

tatr

ansm

issi

on s

ervi

ces

(CPC

752

3**)

(d)

Tel

ex s

ervi

ces

(CPC

752

3**)

(e)

Tel

egra

ph s

ervi

ces

(CPC

752

2)(f

)Fa

csim

ile s

ervi

ces

(CPC

75

21**

+ 75

29**

)(g

)Pr

ivat

e le

ased

circ

uit s

ervi

ces

(CPC

752

2**+

7523

**)

(1)

Serv

ices

pro

vide

d on

ly o

ver

the

circ

uits

leas

ed f

rom

Tel

ecom

Cam

bodi

a. S

tart

ing

nola

ter

than

1 J

anua

ry 2

009:

Non

e

(2)

Non

e(3

)Pr

ovid

ed e

xclu

sive

ly b

y T

elec

omC

ambo

dia.

Sta

rtin

g no

late

r th

an 1

Janu

ary

2009

:Non

e, e

xcep

t sub

ject

to

requ

irem

ent f

or lo

cal s

hare

hold

ing

of u

pto

49%

.(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n

(1)

Serv

ices

prov

ided

only

over

the

circ

uits

leas

ed f

rom

Tel

ecom

Cam

bodi

a. S

tart

ing

no la

ter

than

1 Ja

nuar

y20

09:

Non

e(2

) N

one

(3)

Prov

ided

excl

usiv

ely

by T

elec

omC

ambo

dia.

Sta

rtin

gno

late

r th

an1

Janu

ary

2009

:N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion

Cam

bodi

a un

dert

akes

obl

igat

ions

cont

aine

d in

the

Ref

eren

cePa

per

atta

ched

.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Tel

e-

Com

mun

ica

Ser

vice

sch

edte

le-

com

mu

nic

ati

Pre

par

e p

lan

acti

on

con

tain

step

sn

eces

sar

TA

tions

su

le:

on

ser

vice

s

of in

g y to

m

eet

com

mit

men

tin

2008

2004

-200

5is

bein

gpr

ovid

ed

Mo

bile

Ser

vice

sch

edu

lete

le-

com

mu

nic

ati

Dev

elo

po

bje

and

tran

spar

encr

iter

ia f

or

i

88

ph

on

ess

:

on

ser

vice

s88

ctiv

et

ssu

ing

licen

ses

in t

his

are

a

2004

TA

is b

eing

pr

ovid

ed

(h)

E-m

ail (

CPC

752

3**)

(i)

Voi

ce-m

ail (

CPC

752

3**)

(j)

On-

line

info

rmat

ion

and

data

base

-ret

riev

al (

CPC

752

3**)

(k)

Ele

ctro

nic

Dat

a In

terc

hang

e(C

PC 7

523*

*)(l

)E

nhan

ced/

valu

e ad

ded

facs

imile

serv

ices

, inc

l. st

ore

and

forw

ard,

stor

ean

d re

trie

ve (

7523

**)

(m)

Cod

e an

dpr

otoc

ol c

onve

rsio

n(n

)O

n-lin

e in

form

atio

n an

d/or

dat

apr

oces

sing

(in

clud

ing

tran

sact

ion

proc

essi

ng)

(CPC

843

**)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

88

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

MIN

IST

RY

OF

TO

UR

ISM

Ho

tels

s: n

rela

ted

tra

vel

serv

ices

89

ub

-dec

ree

rati

ng

clas

sifi

cati

on

2004

No

TA

nee

ded

S

ervi

cesc

hed

ule

tou

rism

ad

Pre

par

es

on

ho

tel

89(o)

Oth

erse

rvic

es:

-

Mob

ilese

rvic

es(1

) N

one

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

e ho

rizo

ntal

sec

tion

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

Cam

bodi

a co

mm

its to

per

mit

licen

sed

supp

liers

of m

obile

tele

com

mun

icat

ions

ser

vice

s ch

oice

ofte

chno

logy

use

d in

the

supp

ly o

f su

chse

rvic

es.

89 1.H

otel

s(C

PC 6

4110

)(1

) N

one

(2)

Non

e(3

)N

one

for

hote

l3st

ars

or h

ighe

r89 .

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

e ho

rizo

ntal

sec

tion.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Tra

vel

Ag

enci

es a

nd

T

ou

r

Ser

vice

sch

edu

leto

uri

sm a

nd

Am

end

pre

sen

dra

ftL

awo

nT

ou

bri

ng

itin

toco

mp

lian

Op

erat

ors

s:

rela

ted

tra

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serv

ices

90

tri

sm t

o

cew

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com

mit

men

ts

2004

No

TA

nee

ded

Res

tau

ran

ts

rela

ted

tra

vel

serv

ices

91

ree

or

esta

blis

her

iafo

r

rest

aura

nts

2004

No

TA

nee

ded

S

ervi

ces

sch

edu

le:

tou

rism

an

d

Issu

eS

ub

-dec

Pra

kas

toth

ecr

itse

ttin

g u

p

90

90 2.T

rave

l age

ncie

s an

d to

urop

erat

ors

serv

ices

(C

PC74

71)

(1)

Non

e(2

) N

one

(3)

Non

e, e

xcep

tfor

eign

equ

ity p

artic

ipat

ion

limite

d to

51%

for

trav

el a

genc

ies

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

e ho

rizo

ntal

sec

tion.

(1)

Non

e(2

) N

one

(3)

Non

e

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion.

91

Res

taur

ants

(C

PC 6

42,6

43)

(1)

Unb

ound

*(2

) N

one

(3)

Perm

it is

gra

nted

taki

ng in

toac

coun

tch

arac

teri

stic

s of

the

area

91

(4)

Unb

ound

(1)

Unb

ound

*(2

) N

one

(3)

Unb

ound

(4)

Unb

ound

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

MIN

IST

RY

OF

PU

BLI

C W

OR

KS

AN

DT

RA

NS

PO

RT

Acc

ess

mar

itim

Ser

vice

sch

edm

arit

ime

En

sure

that

Law

on

Mar

iti

Tra

nsp

ort

con

tp

rovi

sio

ns

“ad

dit

ion

al

91

to ese

rvic

es

su

le:

serv

ices

92

dra

ftm

e ain

sco

veri

ng

com

mit

men

ts”

2004

No

TA

nee

ded

92

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Ro

adtr

ansp

ort

Ser

vice

sch

edro

adtr

ansp

Dra

ft L

aw o

nT

ran

spo

rtre

gu

2004

T

A

92

su

le:

ort

serv

ices

93

lati

ng

sect

or

nee

ded

Inte

rnat

iona

l tra

nspo

rt(F

reig

ht a

ndpa

ssen

gers

) (C

PC72

11 a

nd72

12),

excl

udin

g ca

bota

ge

(1)

Unb

ound

(2)

Unb

ound

(3)

Unb

ound

(4)

Unb

ound

(1)

Unb

ound

(2)

Unb

ound

(3)

Unb

ound

(4)

Unb

ound

Whe

reno

t oth

erw

ise

mad

e av

aila

ble

to th

e in

tern

atio

nal m

ariti

me

tran

spor

tsu

pplie

rs p

ursu

ant t

oA

rtic

le X

XV

III

(c)

(ii)

,no

mea

sure

s sh

all b

e ap

plie

dw

hich

den

y re

ason

able

and

non-

disc

rim

inat

ory

acce

ss to

the

follo

win

gse

rvic

es:

1.T

owin

g an

d tu

g as

sist

ance

;2.

Prov

isio

ning

, fue

lling

and

w

ater

ing;

3.G

arba

ge c

olle

ctin

g an

d ba

llast

was

te d

ispo

sal;

4.E

mer

genc

y re

pair

faci

litie

s;5.

Lig

hter

ing

and

wat

er ta

xise

rvic

es;

6.

Ship

age

ncie

s;7.

C

usto

mbr

oker

s;8.

Stev

edor

ing

and

term

inal

serv

ices

;9.

Surv

eyin

g an

d cl

assi

fica

tion

serv

ices

.

93

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Ref

use

dis

po

sal

Ser

vice

sch

edu

leen

viro

nm

ent

Issu

esu

b-d

ecr

ere

qu

irin

gG

ove

and

May

ob

serv

e n

on

-d

iscr

imin

atio

n in

2004

N

ot

,sa

nit

atio

n

s;

al s

ervi

ces

e rno

rso

rs t

o

gra

nti

ng

co

ntr

acts

nee

ded

94

93(a)

Pass

enge

r tr

ansp

orta

tion

(CPC

712

1 +

7122

)(b

)Fr

eigh

t tra

nspo

rtat

ion

(CPC

712

3)(c

)R

enta

l of

com

mer

cial

veh

icle

s w

ith o

pera

tor

(CPC

712

4)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

(d)

Mai

nten

ance

and

rep

air

of r

oad

tran

spor

t equ

ipm

ent

(CPC

611

2+88

67)

(e)

Supp

ortin

g se

rvic

es f

or r

oad

tran

spor

t ser

vice

s(C

PC 7

44)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

94

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

MIN

IST

RY

OF

CU

LTU

RE

AN

D F

INE

AR

TS

TR

IPS

Tab

le 1

2 an

d

par

a 20

695

on

sn

tin

gL

awo

n C

op

yrig

ht

200

Ais

bei

ng

pro

vid

ed.

WP

Rep

ort

Dra

ft r

egu

lati

imp

lem

e4

T

94

1.Se

wag

e se

rvic

es(C

PC 9

401)

2.R

efus

e di

spos

al s

ervi

ces

(CPC

940

2)3.

Sani

tatio

n an

d si

mila

rse

rvic

es(C

PC 9

403)

4.

Oth

erse

rvic

es-

Cle

anin

g of

exh

aust

gas

es(C

PC 9

404)

-N

oise

aba

tem

ent s

ervi

ces

(C

PC94

05)

-N

atur

e an

d la

ndsc

ape

prot

ectio

nse

rvic

es(C

PC 9

406)

-O

ther

env

iron

men

tal s

ervi

ces

not i

nclu

ded

else

whe

re(C

PC 9

409)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n

95 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t C

ambo

dia

wou

ld a

pply

the

Agr

eem

ent

on T

rade

-Rel

ated

Asp

ects

of

Inte

llect

ual

Prop

erty

Rig

hts

no l

ater

tha

n 1

Janu

ary

2007

acco

rdin

g to

the

Act

ion

Plan

in T

able

12

with

the

unde

rsta

ndin

g th

at d

urin

g th

is p

erio

d pr

otec

tion

for

inte

llect

ual p

rope

rty

righ

ts li

sted

in p

arag

raph

s 20

4 an

d 20

5 w

ould

be

appl

ied

inC

ambo

dia.

The

Wor

king

Part

y to

okno

teof

this

com

mitm

ent.

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

NA

TIO

NA

L B

AN

K O

F C

AM

BO

DIA

Ban

kin

gs

:b

anki

ng

an

d

serv

ices

96

do

pt

oti

able

men

tsan

d

Tra

nsa

ctio

ns

2004

No

TA

nC

urr

entl

y aw

aiti

ng

to

be

rese

nt

to t

he

Nat

ion

al

Ass

emb

lyS

ervi

cesc

hed

ule

oth

erfi

nan

cial

Pre

par

e an

da

Law

on

Neg

Inst

ruP

aym

ents

eed

ed

9596 2.B

anki

ng a

nd o

ther

fin

anci

al s

ervi

ces

The

com

mitm

ents

for

sub

sect

ors

(a),

(b)

and

(d)

refe

r to

com

mer

cial

bank

ing

only

.

(a)

Acc

epta

nce

of d

epos

its a

ndot

her

repa

yabl

e fu

nds

from

the

publ

ic (

CPC

811

15–

8111

9)(b

)L

endi

ng o

fal

l typ

es,i

nclu

ding

,in

ter

alia

, con

sum

er c

redi

t,m

ortg

age

cred

it, f

acto

ring

and

fina

ncin

g of

com

mer

cial

tran

sact

ion

(CPC

8113

);(d

)A

ll pa

ymen

t and

mon

eytr

ansm

issi

on s

ervi

ce, i

nclu

ding

cred

it, c

harg

e an

d de

bit c

ards

, tr

avel

ler

cheq

ues

and

bank

ers

draf

ts (

CPC

813

3996

)

(1)

Non

e, e

xcep

tdep

osits

fro

m th

e pu

blic

mus

t be

rein

vest

ed in

Cam

bodi

a(2

) N

one

(3)

Non

e, e

xcep

tonl

y pe

rmitt

ed th

roug

hau

thor

ized

fin

anci

al in

stitu

tions

as

bank

s(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e

(2)

Non

e(3

) N

one

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion.

The

com

mitm

ents

for

sub

sect

ors

(c)

and

(e)

refe

r to

com

mer

cial

ban

king

only

.

(c)

Fina

ncia

llea

sing

(e)

Gua

rant

ees

and

com

mitm

ents

(1)

Unb

ound

(2)

Non

e(3

)U

nbou

nd u

ntil

rela

ted

law

san

dre

gula

tions

are

est

ablis

hed

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

e ho

rizo

ntal

sec

tion.

(1)

Non

e(2

) N

one

(3)

Non

e

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion.

96

97 (j)

Settl

emen

t and

cle

arin

g se

rvic

esfo

rfi

nanc

ial a

sset

s, in

clud

ing

secu

ritie

s, d

eriv

ativ

e pr

oduc

ts,

and

othe

r ne

gotia

ble

inst

rum

ents

;

(f)

Tra

ding

for

ow

n ac

coun

tor

for

acco

unto

f cu

stom

ers,

whe

ther

on a

n ex

chan

ge, i

n an

over

-the

-co

unte

r m

arke

t or

othe

rwis

e,th

efo

llow

ing

(A)

mon

ey m

arke

t ins

trum

ents

(inc

ludi

ng c

hequ

es,b

ills,

cert

ific

ates

of

depo

sits

);(B

) f

orei

gn e

xcha

nge

(C)

der

ivat

ive

prod

ucts

incl

udin

g, b

ut n

otlim

ited

to,

futu

res

and

optio

ns;

(D)

exc

hang

e ra

te a

nd in

tere

stra

te in

stru

men

ts, i

nclu

ding

prod

ucts

suc

h as

sw

aps,

forw

ard

rate

agr

eem

ents

;(E

) t

rans

fera

ble

secu

ritie

s;(F

)ot

her

nego

tiabl

e in

stru

men

tsan

d fi

nanc

ial a

sset

s, in

clud

ing

bulli

on

(g)

Part

icip

atio

n in

issu

esof

all

kind

sof

sec

uriti

es, i

nclu

ding

unde

rwri

ting

and

plac

emen

t as

agen

cy (

whe

ther

pub

licly

or

priv

atel

y) a

ndpr

ovis

ion

ofse

rvic

es r

elat

ed to

suc

h is

sues

;

(h)

Mon

ey b

roki

ng;

(i)

Ass

et m

anag

emen

t, su

ch a

s ca

shor

por

tfol

io m

anag

emen

t, al

lfo

rms

of c

olle

ctiv

e in

vest

men

tm

anag

emen

t, pe

nsio

nfu

ndm

anag

emen

t, cu

stod

ial,

depo

sito

ry a

nd tr

usts

ervi

ces;

(1)

Unb

ound

(2)

Non

e(3

)U

nbou

nd f

or s

ubse

ctor

s (f

) –

(l),

until

the

Gov

ernm

ent o

f C

ambo

dia

dete

rmin

esw

hat t

ypes

of e

ntiti

es c

an c

ondu

ct th

ese

serv

ices

, the

rel

ated

law

s an

dre

gula

tion

are

esta

blis

hed,

and

suc

hbu

sine

ss is

au

thor

ized

by

the

gove

rnm

ento

r ot

her

rele

vant

des

igna

ted

auth

ority

.(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Ban

kin

Ser

vice

sch

edu

le

oth

erfi

nan

cial

Co

nsi

der

pre

pa

ing

reg

ula

tio

ns

cov

mo

rtg

age

crfa

cto

rin

g,c

har

and

deb

it c

ard

s an

d

Tee

ded

Com

men

ts h

ave

been

mad

eth

atdi

ffer

ent

diff

eren

t app

roac

hes

to r

egul

atin

gth

ese

fso

me

do h

ave

law

s an

d re

gula

tions

, som

It is

sug

gest

ed th

at C

ambo

dia

(NB

Ca

do a

pre

limin

ary

com

par

coun

trie

s fo

r fu

rthe

r de

cisi

on m

akin

g.

gs

:b

anki

ng

an

d

serv

ices

r erin

ged

it,

ge

trav

eler

’s c

hec

ks

2005

An

coun

trie

sha

veac

ilitie

s–

e ot

hers

do

not.

nd/o

rM

oC)

coul

d at

ive

lega

lres

earc

hon

afe

w

Ban

kin

g:

ban

kin

g a

nd

fin

anci

al

raft

ed, b

e h

atit

will

Oo

blig

atio

ns

No

ne

TA

nee

ded

TA

to b

e pr

ovid

ed u

nder

the

AD

B F

inan

cial

Blu

epri

nt

in 2

005.

S

ervi

ces

sch

edu

le

oth

er

serv

ices

If L

awo

nF

inan

cial

leas

ing

isd

awar

et

trig

ger

WT

CO

UN

FO

R T

HE

DE

VE

LOP

ME

NT

MB

OD

IC

ILO

FC

AA

Inve

stm

ent

Law

WP

Rep

ort

par

a 14

397

entin

ge

Law

ndm

ent o

f th

e L

OI,

by

incr

easi

ng

com

plia

nce

with

T

RIM

S

2004

TA

nee

ded

Still

bei

ng d

ebat

ed th

e ne

gativ

e lis

t – in

clud

ing

(i)

proh

ibiti

ve li

st a

nd (

ii) li

st in

elig

ible

for

ince

ntiv

es.

Exp

ecte

d 20

05.

Dra

ft o

f im

plem

Sub-

decr

eeof

thon

the

Am

e

98

97 T

he r

epre

sent

ativ

e of

Cam

bodi

a sa

id t

hat

Cha

pter

V o

f th

e L

awon

Inv

estm

ent

of 4

Aug

ust1

994

and

Cha

pter

7 o

f G

over

nmen

t Su

b-D

ecre

e N

o. 8

8A

NK

R.B

K o

n th

eIm

plem

enta

tion

of t

he L

awon

Inve

stm

ent

of 2

9 D

ecem

ber

1997

con

tain

ed c

erta

in t

rade

-rel

ated

pro

visi

ons,

inc

ludi

ng i

ncen

tives

for

exp

ort-

orie

nted

inv

estm

ents

tha

t in

clud

e th

eex

empt

ion,

in

who

le o

r in

part

, of

dut

ies

and

taxe

s;

corp

orat

e pr

ofit

tax

exem

ptio

ns a

nd p

refe

renc

es,

depe

ndin

gon

the

cha

ract

eris

tics

of t

he p

roje

ct a

nd i

ts p

rior

ity s

tatu

s w

ith t

heG

over

nmen

t of

Cam

bodi

a;

and

tax

exem

ptio

n on

divi

dend

or p

rofi

t di

stri

butio

nw

heth

er t

rans

ferr

ed a

broa

d or

dist

ribu

ted

in C

ambo

dia

(Art

icle

s 12

,13

, an

d14

:1-3

of t

heL

awon

Inve

stm

ent)

.Su

ch i

nves

tmen

ts c

ould

als

obe

exe

mpt

ed f

rom

the

exp

ort

tax

and

enjo

y sp

ecia

lru

les

for

entr

y of

fore

ign

natio

nals

. I

n pa

rtic

ular

, A

rtic

le 1

4:4(

a) a

nd (

b) e

xem

pted

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12099

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TO

eac

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.

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mat

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ls,m

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ofpr

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t, in

term

edia

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ods,

raw

mat

eria

ls a

nd s

pare

par

ts u

sed

inex

port

-ori

ente

d in

vest

men

t pro

ject

sw

ith a

min

imum

of

80pe

r ce

nt o

f th

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oduc

tion

expo

rted

, or

loca

ted

in a

des

igna

ted

Spec

ial P

rom

otio

n Z

one

(SPZ

) lis

ted

in a

dev

elop

men

t pri

ority

list

issu

ed b

y th

e C

ounc

il fo

r th

eD

evel

opm

ent

of C

ambo

dia.

Art

icle

14:4

(c),

(d)

, and

(e)

prov

ided

tha

t su

ch i

ncen

tives

cou

ld b

e au

thor

ized

for

inv

estm

ents

inv

olvi

ng t

he t

ouri

sm i

ndus

try,

lab

our-

inte

nsiv

e in

dust

ry,

tran

sfor

mat

ion

indu

stry

, ag

ro-i

ndus

try

or p

hysi

cal

infr

astr

uctu

re a

nd e

nerg

y in

dust

ry f

or t

he c

onst

ruct

ion

peri

odof

ent

erpr

ises

, fa

ctor

ies,

bui

ldin

g an

d th

efi

rst

year

of

oper

atio

nof

busi

ness

pro

duct

ion.

The

sem

easu

res

wer

e, i

nhi

svi

ew, i

ncen

tives

con

sist

ent

with

the

Agr

eem

ent

onT

rade

-Rel

ated

Inve

stm

ent

Mea

sure

s, a

nd w

ould

be m

aint

aine

d as

lon

g as

they

wer

e pe

rmitt

edby

WT

O p

rovi

sion

s an

dC

ambo

dia’

s Pr

otoc

olof

Acc

essi

on a

ndw

ould

mee

t Cam

bodi

a’s

deve

lopm

ent n

eeds

. H

owev

er, t

he n

ewly

am

ende

d L

aw o

n In

vest

men

t, in

its

Art

icle

14

conc

erni

ng i

ncen

tives

, do

esno

tm

ake

any

refe

renc

e to

the

"m

inim

um 8

0 pe

r ce

nt o

f th

epr

oduc

tion

for

expo

rt".

M

oreo

ver,

the

im

plem

entin

g su

b-D

ecre

ew

hich

will

be

draf

ted

will

be

mad

e to

ens

ure

full

com

plia

nce

with

the

WT

Opr

ovis

ions

on T

RIM

s.

98 S

ome

Mem

bers

con

side

red

the

exis

ting

syst

em o

f re

mis

sion

of i

mpo

rt f

ees

and

wai

ver

ofdu

ty f

or c

erta

in g

oods

use

d by

cer

tain

inv

esto

rs t

o be

hig

hly

com

plex

, la

ckin

g in

tran

spar

ency

and

pron

e to

abu

se,

and

ther

efor

e en

cour

aged

Cam

bodi

a to

im

plem

ent

a du

ty d

raw

back

sch

eme

cons

iste

nt w

ith t

he A

gree

men

t on

Sub

sidi

es a

nd C

ount

erva

iling

Mea

sure

s.

Pend

ing

the

impl

emen

tatio

n of

a f

unct

ioni

ng d

uty

draw

back

pro

gram

me

limiti

ng r

ebat

esto

the

am

ount

of

tari

ff a

nd t

ax i

ncor

pora

ted

in t

he e

xpor

ted

prod

uct,

the

curr

ent

prog

ram

mes

wou

ldne

ed to

be n

otif

ied

as s

ubsi

dies

as

they

did

not

app

ear

toqu

alif

y as

val

id d

uty

draw

back

sch

emes

.

99 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t an

y su

bsid

y pr

ogra

mm

es p

rovi

ded

byhi

s G

over

nmen

t af

ter

acce

ssio

n w

ould

be

adm

inis

tere

d in

conf

orm

ity w

ith t

heA

gree

men

t on

Subs

idie

s an

d C

ount

erva

iling

Mea

sure

s, in

clud

ing

Art

icle

27,

and

that

all

nece

ssar

y in

form

atio

n on

Cam

bodi

a’s

expo

rt s

ubsi

dies

and

oth

er n

otif

iabl

e pr

ogra

mm

es w

ould

be n

otif

ied

toth

e C

omm

ittee

on

Subs

idie

s an

d C

ount

erva

iling

Mea

sure

s ac

cord

ing

to A

rtic

le 2

5 of

the

Agr

eem

ent

upon

ent

ry i

nto

forc

e of

Cam

bodi

a’s

Prot

ocol

of A

cces

sion

.H

e al

so c

onfi

rmed

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Cam

bodi

a w

ould

eith

erel

imin

ate

the

exis

ting

syst

emof

rem

issi

on o

f im

port

fee

s an

dw

aive

r of

duty

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cer

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tain

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the

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atio

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Com

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NA

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L C

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T

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101

101 T

he r

epre

sent

ativ

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Cam

bodi

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nfir

med

that

Cam

bodi

a w

ould

impl

emen

t pro

gres

sive

ly th

e pr

ovis

ions

of th

eW

TO

Agr

eem

ent o

n th

e A

pplic

atio

n of

San

itary

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Phy

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res

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in th

e tim

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rovi

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e A

ctio

n Pl

an f

or I

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emen

tatio

n in

Tab

le 1

1, a

nd w

ould

ens

ure

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impl

emen

tatio

n of

the

Agr

eem

ent n

o la

ter

than

1 J

anua

ry 2

008,

and

with

the

unde

rsta

ndin

g th

at d

urin

g th

ispe

riod

the

scop

e of

impl

emen

tatio

nof

othe

r as

pect

sof

the

Agr

eem

ent,

as d

escr

ibed

in p

arag

raph

141

wou

ldbe

app

lied

by C

ambo

dia.

He

furt

her

conf

irm

ed t

hat

Cam

bodi

a sh

ould

cons

ult

with

WT

O M

embe

rsup

onre

ques

t if

the

y de

emed

tha

t an

ym

easu

res

appl

ied

duri

ng t

he t

rans

ition

per

iod

affe

cted

the

ir t

rade

nega

tivel

y. T

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ngPa

rty

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not

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thes

eco

mm

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ts.

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eren

ceT

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dlin

ea

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nica

lch

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nce

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ts a

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WP

Rep

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leD

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ad

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ion

are

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lati

on

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nsa

fety

; se

cure

nec

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rytr

ain

2005

T

A

S11

par

a 14

2

l foo

d

ing

;u

pd

ate

Co

dex

lib

rary

nee

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INT

ELL

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TU

AL

PR

OP

ER

TY

RIG

HT

S C

OO

RD

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OM

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n

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2,

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ne,

Gen

Ph

on

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ram

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ssel

sS

ate

Tre

aty

TR

IPS

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P R

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102

Tab

le 1

2,

par

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6

on

Geo

gra

ph

ical

Ind

icat

ion

s

2004

TA

is b

eing

pr

ovid

ed

102 T

he r

epre

sent

ativ

e of

Cam

bodi

a co

nfir

med

tha

t C

ambo

dia

wou

ldap

ply

the

Agr

eem

ent

on T

rade

-Rel

ated

Asp

ects

of

Inte

llect

ual

Prop

erty

Rig

hts

no l

ater

tha

n 1

Janu

ary

2007

acco

rdin

g to

the

Act

ion

Plan

in T

able

12

with

the

unde

rsta

ndin

g th

at d

urin

g th

is p

erio

d pr

otec

tion

for

inte

llect

ual p

rope

rty

righ

ts li

sted

in p

arag

raph

s 20

4 an

d 20

5 w

ould

be

appl

ied

inC

ambo

dia.

The

Wor

king

Part

y to

okno

teof

this

com

mitm

ent.

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eren

ceT

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dlin

ea

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nica

lch

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nce

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ts a

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2005

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eded

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le 1

2,

Pu

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e im

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iC

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n f

or

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103

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nica

lch

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tatu

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ALL

MIN

IST

RIE

S A

ND

AG

EN

CIE

S

Tra

nsp

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cyR

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30d

ays

bef

ore

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No

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PP

ub

lish

dra

ftla

and

dra

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mm

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GE

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VA

MIS

SIO

N

WT

Par

tici

104

OC

om

mit

tee

on

T

BT

WP

Rep

ort

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9104

pat

ein

the

mee

tin

gs

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mm

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e

On

go

ing

No

TA

nee

ded

103 I

n re

spon

se,

the

repr

esen

tativ

e of

Cam

bodi

a st

ated

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t C

ambo

dia

inte

nded

to

prov

ide

a re

ason

able

per

iod,

i.e

. no

les

s th

an 3

0 da

ys,

for

com

men

t to

the

app

ropr

iate

aut

hori

ties

befo

re m

easu

res

pert

aini

ng to

or

affe

ctin

g tr

ade

ingo

ods,

serv

ices

and

TR

IPS

are

adop

ted,

exc

ept

for

thos

e re

gula

tions

and

oth

er m

easu

res

invo

lvin

gna

tiona

l em

erge

ncy

or s

ecur

ity,

or f

or w

hich

the

pub

licat

ion

wou

ld i

mpe

de l

aw e

nfor

cem

ent.

The

pub

licat

ion

of s

uch

regu

latio

ns a

nd o

ther

mea

sure

s w

ould

inc

lude

the

eff

ectiv

e da

te o

f th

ese

mea

sure

s an

d, w

here

appr

opri

ate

or p

ossi

ble,

lis

t th

e pr

oduc

ts a

nd s

ervi

ces

affe

cted

by t

he p

artic

ular

mea

sure

, ide

ntif

ied

byap

prop

riat

e ta

riff

lin

e an

d cl

assi

fica

tion.

He

adde

d th

at C

ambo

dia

wou

ldpo

stth

e co

nten

ts o

f cu

rren

t and

past

edi

tions

of

the

Off

icia

l Jou

rnal

on

the

gove

rnm

ent w

ebsi

te a

nd k

eep

them

cur

rent

.

104 T

he G

over

nmen

tof

Cam

bodi

a re

ques

ted

that

the

Wor

king

Par

ty g

rant

a t

rans

ition

alpe

riod

fro

m t

he d

ate

of i

ts a

cces

sion

unt

il 1

Janu

ary

2007

for

impl

emen

tatio

n of

the

WT

OA

gree

men

t on

Tec

hnic

al B

arri

ers

to T

rade

, to

allo

w C

ambo

dia

to o

btai

n an

d ut

ilize

tec

hnic

alas

sist

ance

to

fully

im

plem

ent

the

oblig

atio

nsof

the

Agr

eem

ent.

Dur

ing

this

peri

od,

exis

ting

mea

sure

sw

ould

be

appl

ied

on a

non

-dis

crim

inat

ory

basi

s, i

.e. p

rovi

ding

for

natio

nal

trea

tmen

t an

d M

FN t

reat

men

t to

all

impo

rts.

M

easu

res

in p

lace

alr

eady

con

sist

ent

with

the

prov

isio

ns o

f th

e A

gree

men

t on

Tec

hnic

alB

arri

ers

to T

rade

wou

ldno

t be

sub

ject

to

tran

sitio

ns, a

nd C

ambo

dia

wou

ld e

nsur

e th

at a

ny c

hang

esm

ade

in i

ts l

aws,

reg

ulat

ions

and

prac

tice

duri

ng th

e tr

ansi

tion

peri

od w

ould

not r

esul

t in

a le

sser

deg

ree

of c

onsi

sten

cy w

ith th

e pr

ovis

ions

of th

e A

gree

men

t tha

n ex

iste

don

the

date

of

acce

ssio

n. S

tand

ards

, tec

hnic

alre

gula

tions

, an

d co

nfor

mity

asse

ssm

ent

proc

edur

es a

dopt

ed d

urin

g th

is p

erio

d w

ould

be

deve

lope

d in

con

form

ity w

ith t

he p

rovi

sion

s of

the

Agr

eem

ent.

Cam

bodi

a w

ould

ful

ly

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

WT

OC

om

mit

tee

oW

P R

epo

rt

par

a 14

1n

SP

S

105

inth

eo

fth

eC

om

mit

tee

No

TA

nee

ded

P

arti

cip

ate

mee

tin

gs

On

go

ing

BA

R A

SS

OC

IAT

105

ION

part

icip

ate

in th

e w

ork

of th

e C

omm

ittee

on

Tec

hnic

al B

arri

ers

to T

rade

. H

e ad

ded

that

Cam

bodi

a w

ould

see

k ou

t all

avai

labl

e te

chni

cal a

ssis

tanc

e to

ens

ure

that

its

capa

city

to f

ully

impl

emen

t the

Agr

eem

ent u

pon

expi

ratio

nof

the

tran

sitio

npe

riod

is a

ssur

ed.

105 T

he r

epre

sent

ativ

e of

Cam

bodi

are

ques

ted

that

the

Wor

king

Par

ty g

rant

a t

rans

ition

al p

erio

dfr

om t

he d

ate

of i

ts a

cces

sion

until

1 J

anua

ry20

08fo

r im

plem

enta

tion

of t

heW

TO

Agr

eem

ent

on S

anita

ry a

nd P

hyto

sani

tary

Mea

sure

s, t

o al

low

Cam

bodi

a to

obt

ain

and

utili

ze t

echn

ical

ass

ista

nce

to f

ully

im

plem

ent

the

oblig

atio

nsof

the

Agr

eem

ent.

Dur

ing

this

peri

od,

exis

ting

mea

sure

sw

ould

be a

pplie

don

a n

on-d

iscr

imin

ator

yba

sis,

i.e

., pr

ovid

ing

for

natio

nal

trea

tmen

t an

d M

FN t

reat

men

t to

all

impo

rts.

M

easu

res

in p

lace

alr

eady

co

nsis

tent

with

the

prov

isio

ns o

f th

eA

gree

men

t on

Sani

tary

and

Phy

tosa

nita

ry M

easu

res

wou

ldno

tbe

subj

ect t

o tr

ansi

tions

, and

Cam

bodi

a w

ould

ens

ure

that

any

chan

ges

mad

e in

its

law

s,re

gula

tions

and

prac

tice

duri

ng th

e tr

ansi

tion

peri

odw

ould

notr

esul

t in

a le

sser

deg

ree

of c

onsi

sten

cy w

ith th

epr

ovis

ions

of th

eA

gree

men

t tha

n ex

iste

d on

the

date

of a

cces

sion

.T

echn

ical

reg

ulat

ions

and

othe

r m

easu

res

adop

ted

duri

ng t

his

peri

odw

ould

bede

velo

ped

in c

onfo

rmity

with

the

pro

visi

ons

of t

heA

gree

men

t. P

rior

ity w

ould

be

give

n to

the

esta

blis

hmen

tof

a fu

nctio

ning

enq

uiry

poi

nt a

nd th

e no

tific

atio

n of

all

of C

ambo

dia’

s SP

S m

easu

res

to th

e C

omm

ittee

. H

e ad

ded

that

Cam

bodi

a w

ould

see

k ou

t all

avai

labl

e te

chni

cal

assi

stan

ce t

o en

sure

tha

t its

cap

acity

to

fully

im

plem

ent

the

SPS

Agr

eem

ent

upon

exp

irat

ion

of t

he t

rans

ition

per

iod

is a

ssur

ed.

Cam

bodi

a w

ould

ful

ly p

artic

ipat

e in

the

wor

k of

the

Com

mitt

ee o

n Sa

nita

ry a

nd P

hyto

sani

tary

Mea

sure

s.

In r

espo

nse

tore

ques

ts f

rom

del

egat

ions

for

mor

e sp

ecif

icity

, the

rep

rese

ntat

ive

of C

ambo

dia

pres

ente

d an

Act

ion

Plan

set

ting

outd

etai

ls o

f th

e st

eps

that

stil

l rem

aine

d to

be

take

n in

orde

r to

ach

ieve

this

obj

ectiv

e an

d a

timet

able

for

eac

h st

ep (

Tab

le 1

1).

Top

icW

TO

Ref

eren

ceT

ask

De

dlin

ea

Te

nica

lch

Ass

ista

nce

Com

men

ts a

nd s

tatu

s

Leg

alse

rvic

sS

ervi

cesc

hed

Bu

sin

ese

rL

egal

Dra

ft a

men

dm

ets

top

ara

5an

d6,

ao

ther

arti

cles

ifo

f th

e L

ab

rin

g a

bo

ut

con

form

ity

w

106

es

ule

:ss

vice

s:

serv

ices

106

n nd an

y,w

on

Bar

,to

ith

the

WT

O c

om

mit

men

t

2004

No

TA

nee

ded

106

(a)

Leg

al s

ervi

ces

(CPC

861

):(1

) N

one

(2)

Non

e(3

)In

com

mer

cial

asso

ciat

ion

with

Cam

bodi

an la

w f

irm

s106 , a

nd m

ay n

otdi

rect

ly r

epre

sent

clie

nts

in c

ourt

s.(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e

(4)

Unb

ound

, exc

ept a

s in

dica

ted

in th

eho

rizo

ntal

sec

tion.

Fo

reig

n le

gal c

onsu

ltanc

yon

law

of ju

risd

ictio

n w

here

serv

ice

supp

lier

is q

ualif

ied

as a

law

yer

(inc

ludi

ngho

me

coun

try

law

,th

ird

coun

try

law

, and

inte

rnat

iona

l law

)

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

din

the

hori

zont

al s

ectio

n.

(1)

Non

e(2

) N

one

(3)

Non

e(4

)U

nbou

nd, e

xcep

t as

indi

cate

d in

the

hori

zont

al s

ectio

n.

s V

alua

tion

Tab

le 7

: A

ctio

n Pl

an f

or I

mpl

emen

tatio

n of

the

Agr

eem

ent o

n C

usto

m

Act

ion

Dea

dlin

eW

P re

view

of

Dra

ftL

aw o

n C

usto

ms

Prio

r to

acc

essi

onC

reat

ion

of a

WT

OV

A im

plem

ent

rtm

enta

lla

n to

impl

emen

t the

VA

tran

sitio

n pl

an.

Nat

ion

proj

ect t

eam

and

pre

para

tion

of a

depa

po

late

rth

anD

ecem

ber

2003

-

PSI

mec

hani

sm, n

ew c

ontr

actw

ill b

e in

com

plia

nce

No

late

r th

an1

Janu

ary

2004

Ifde

cisi

on to

ret

ain

with

WT

OV

alua

tion

Agr

eem

entr

ules

.Pa

rlia

men

tary

cons

ider

atio

val

uatio

nru

les.

nan

d en

actm

ent o

f le

gisl

atio

n fo

rW

TO

-con

sist

ent

No

late

r th

an1

July

200

4T 1.

rge

mul

tinat

iona

l and

Cam

bodi

an c

ompa

nies

hav

ing

a w

ell

gc

2ni

esw

hich

ese

larg

e fi

rms,

to e

xem

pt

No

late

r th

an1

Janu

ary

2005

rans

actio

n va

luat

ion

to a

pply

to:

impo

rts

by la

esta

blis

hed

com

plia

nce

reco

rdw

ith th

e C

usto

ms

and

Exc

ise

Dep

artm

ent a

ndbe

inon

side

red

low

risk

impo

rter

s..

impo

rts

by f

irm

s ot

her

than

larg

e,m

ultin

atio

nal a

nd C

ambo

dian

com

paim

port

good

s th

at a

re id

entic

al o

r si

mila

r to

good

s im

port

edby

thba

sed

onth

eir

com

plia

nce

reco

rds.

3.im

port

sby

inve

stm

ent c

ompa

nies

and

oth

er im

port

ers

entit

led

ion

(NG

Os,

fore

ign

mis

sion

s,et

c).

Tec

hnic

al tr

aini

ng a

ndpr

ep

aunc

hing

of

auto

mat

ed c

usto

ms

proc

essi

ngsy

stem

pro

ject

.

arat

ion

of d

epar

tmen

tal v

alua

tion

tech

nica

l man

uals

Lau

nchi

ng o

fPo

st C

lear

ance

Aud

itpr

ogra

mL

No

late

r th

an1

Janu

ary

2006

T

owri

sk im

port

ers

and

sect

ors,

of

low

valu

ego

ods

s.

No

late

r th

an J

anua

ry20

07

rans

actio

n va

luat

ion

to a

pply

to:

4.im

port

s,by

sel

ecte

d l

ubje

ct to

rela

tivel

y lo

wra

tes

of d

uty

and

repr

esen

ting

limite

d re

venu

eri

sk5.

impo

rts

of id

entic

al o

r si

mila

rgo

ods

byot

her

impo

rter

s

1

Tra

nsac

tion

valu

atio

n to

app

N 1

ly to

:

6.re

mai

ning

impo

rts

of lo

w v

alue

goo

dssu

bjec

tto

rela

tivel

y lo

w r

ates

of

duty

.

ola

ter

than

Jan

uary

2008

Tra

nsac

tion

valu

atio

n to

app

ly to

:

7.al

l im

port

s, in

clud

ing

high

ly ta

xed

and

sens

itive

goo

ds

No

late

r th

an1

Janu

ary

2009

107

Act

ion

Dea

dlin

eFu

ll im

plem

enta

tion

of th

eA

gree

men

t on

the

Impl

emen

tatio

nof

Art

icle

VII

o th

eG

AT

T1

1f

994

No

late

rth

an J

anua

ry20

09

Tab

le 1

0: A

ctio

n pl

an f

or im

plem

enta

tion

of th

e A

gree

men

t on

Tec

hnic

al B

arri

ers

to T

rade

Dea

dlin

eA

ctio

nA

dopt

ion

ofSu

b-D

ecre

eon

Ind

Ado

ptio

nof

Sub

-Dec

ree

on M

etro

logy

Impl

emen

tatio

nof

Rev

ised

Not

ice

on R

egis

trat

ion

ofIn

dust

rial

Prod

u

ustr

ial S

tand

ards

NO

. 42/

AN

K/B

K

cts

1999

-200

2

Iden

tific

atio

n of

the

Dep

artm

ent o

fIn

dust

rial

Sta

ndar

dsof

Cam

Agr

eem

ent.

Est

ablis

hmen

t of

the

TB

T E

nqui

ry P

oint

in I

SC:

Dep

artm

ent o

f In

dust

rial

St

Min

istr

y of

In

#45,

Nor

odom

Blv

d. P

hno

Fa

x:85

5-23

-216

086

Est

ablis

hmen

t of

TB

T/S

tand

ards

Lib

rary

in I

SC

Inst

alla

tion,

test

ing,

and

cal

ibra

tion

of e

quip

men

t in

ISC

labo

rato

r

Cap

acity

bui

ldin

gfo

r ke

yst

anda

rds

pers

onne

l in

the

fiel

dof

sta

ndar

ion,

man

agem

ent,

met

hods

and

pro

cedu

res

for

sam

plin

g an

din

sin

g,in

spec

tion

and

surv

eilla

nce,

and

for

aud

itors

, ass

esso

rs, i

nst

aff

bodi

a(I

SC)

as th

eau

thor

ity r

espo

nsib

lefo

rno

tific

atio

nsan

d pu

blic

atio

nsre

quir

edby

the

TB

T

anda

rds

of C

ambo

dia

(ISC

)du

stry

, Min

es a

nd E

nerg

ym

Pen

h,

Cam

bodi

a.

E

-mai

l:di

scin

fo@

cam

net.c

om.k

h

ies di

zat

pect

ion,

audi

tsp

ecto

rs, a

ndre

spon

sibl

efo

r te

stin

g an

d ca

libra

tion

and

for

issu

ing

cert

ific

ates

and

lice

nses

.

2003

WP

revi

ew o

f le

gisl

atio

nPr

ior

to a

cces

sion

Subm

issi

on o

f St

atem

ent o

n Im

plem

enta

tion

toW

TO

(pe

rG

/TB

T/1

)U

pon

acce

ssio

n

108

Act

ion

Dea

dlin

eE

nact

men

t of

Law

on I

ndus

tria

l Sta

ndar

ds a

nd a

dopt

ion

ofth

e Su

b-D

Reg

ulat

ions

for

its im

plem

Com

plia

nce

with

the

Cod

eof

Goo

d

Dev

elop

men

tTec

hnic

al R

egul

atio

ns a

nd C

onfo

rmity

Ass

essm

Impl

emen

tatio

n of

TB

T A

gree

men

t(pe

rlis

t in

WT

/AC

C/K

HM

/)

ecre

e an

den

tatio

n

Pra

ctic

e

ent P

roce

dure

sfo

r14

/Rev

.1

No

late

r th

an1

July

200

4

Publ

icat

ion

ofa

peri

odic

Sta

ndar

ds B

ulle

tinor

Gaz

ette

by

the

ISC

co

ngac

tiviti

es r

elat

ing

to te

chni

calr

egul

atio

ns, s

tand

ards

and

conf

ort

proc

edur

es.

veri

mity

ass

essm

enN

o la

ter

than

1 Ja

nuar

y20

05

Tra

inin

gof

sta

ndar

ds s

taff

on in

tern

atio

nal t

rade

and

TB

T im

plem

enta

tn

Rev

iew

and

adj

ustm

ent o

f te

chni

calr

egul

atio

ns a

nd p

roce

dure

s i

ance

with

new

sci

entif

icdi

scov

erie

s an

d ap

proa

ches

.

io

n ac

cord

2005

-200

6

Full

impl

emen

tatio

nof

the

WT

OA

gree

men

t on

Tec

hnic

al B

arri

ers

to T

rade

No

late

r th

an1

Janu

ary

2007

Tab

le 1

1: A

ctio

n Pl

an f

or I

mpl

emen

tatio

n of

the

Agr

eem

ent o

n th

e A

pplic

atio

nof

Sani

tar

and

Phyt

osan

itary

Mea

sure

sy

Act

ion

Dea

dlin

eE

nact

Art

icle

s 2-

8of

t

ucts

of

29 J

uly

RK

RO

), a

s

als

of

-L

awon

the

Man

agem

ent o

f Q

ualit

y an

dSa

fety

of

Prod

ucts

and

Serv

ices

of21

Jun

e 20

00.

-Su

b-de

cree

No.

5 d

ated

3 Fe

brua

ry 1

998

on th

e es

tabl

ishm

ent o

f th

e In

ter-

min

iste

rial

Com

mitt

ee f

or c

oord

inat

ing

the

cont

rolo

f qu

ality

and

saf

ety

of

Com

plet

ed

men

t of

basi

c le

gal a

ndop

erat

iona

l fra

mew

ork

for

impl

emen

tatio

n of

heSP

S A

gree

men

t:

-Su

b-D

ecre

e on

San

itary

Insp

ectio

nof

Ani

mal

and

Ani

mal

Pro

d19

88(N

o.14

AR

.NO

R.K

RA

R),

as

revi

sed

on14

Feb

ruar

y 20

03-

Sub-

Dec

ree

on P

lant

Qua

rant

ine

of 8

Oct

ober

1983

(N

o.98

AR

NO

revi

sed

on14

Feb

ruar

y20

03-

Sub-

Dec

ree

on S

tand

ards

and

Man

agem

ent o

f A

gric

ultu

ralM

ater

i28

Oct

ober

199

8(N

o.69

AR

NO

R K

RA

/BA

RK

AR

)

109

Act

ion

Dea

dlin

epr

oduc

ts a

nd s

ervi

ces.

-L

awon

the

Man

agem

ent o

f Q

ualit

y an

dSa

fety

of

Prod

ucts

and

Ser

(pro

mul

gate

d by

Rea

ch K

ram

No.

NS/

RK

M/0

600/

001

date

d21

Jun

Sub-

decr

ee N

o. 2

8da

ted

9 M

arch

200

1on

the

esta

blis

hmen

t of

the

Cod

ex C

omm

ittee

(N

CC

) an

d its

Sec

reta

riat

. Pr

akas

No.

357

/MO

C d

ated

31 D

ecem

ber

2001

on

the

esta

blis

hT

echn

ical

Wor

king

Gro

ups

(TW

G)

for

the

Nat

iona

lCod

exC

omm

ivice

se

2000

).

-N

atio

nal

-m

ent o

f th

ette

e.E

nact

men

t of

furt

her

lega

lpro

visi

ons

for

impl

emen

tatio

nof

the

SPS

Agr

eem

prog

ram

, e.g

.,D

raft

ing

a su

b-de

cree

on

Food

Hyg

iene

, inc

lan

d m

icro

biol

ogic

al r

equi

rem

ents

,per

WT

/AC

C/K

HM

/15/

Rev

.1.

Est

ablis

hmen

t of

the

SPS

Enq

uiry

Poi

nt, t

rain

ing

of p

erso

nnel

, and

pro

cure

nece

ssar

y eq

uipm

1093

dat

ed 2

6 Ju

ly20

02):

Nat

iona

l Cod

ex C

omm

ittee

Cam

bodi

aIm

port

-Ex

Min

istr

y of

Com

mer

ce (

actin

g as

Fax:

(855

) 23

-426

16E

mai

l: c

amco

ntro

l

Est

ablis

hmen

t of

Cod

exL

ibra

ry

Impl

emen

ting

spec

ific

tech

nica

l tra

inin

gpr

ogra

ms

in S

PS,p

erW

T/A

CC

/SPE

C/K

HM

/15/

Rev

.1

Dra

ftin

g of

add

ition

alre

gula

tions

and

sub

-dec

rees

to im

plem

ent t

he S

PS A

gran

d pr

ovid

e fo

rne

cess

ary

appl

icat

ion

of s

anita

ry a

ndph

ytos

anita

ry m

easu

res,

WT

/AC

C/S

PEC

/KH

M/1

5/

Prof

icie

ncy

test

ing

for

food

: m

icro

biol

ogic

alan

d hy

gien

e,to

war

d M

RA

'S in

the

regi

on.

ent:

udin

g st

orag

e re

quir

emen

t

men

t of

ent (

Dec

isio

n of

the

Cou

ncil

of M

inis

ters

--no

tific

atio

n le

tter

No.

port

and

Frau

d R

epre

ssio

n D

epar

tmen

t (C

AM

CO

NT

RO

L)

Sec

reta

riat

)6

@ca

mne

t.com

.kh

eem

ent

per

Rev

.1

and

food

che

mic

al a

naly

sis

Cap

acity

bui

ldin

g fo

r ke

y C

amco

ntro

l, M

AFF

and

MoH

pers

onne

lon

the

impl

emen

tatio

nof

the

abov

ere

gula

tions

.

2003

WP

revi

ew o

f le

gisl

atio

nPr

ior

to a

cces

sion

110

Act

ion

Dea

dlin

eD

raft

ing

addi

tiona

lreg

ulat

ions

on

food

saf

ety

and

guid

elin

es f

or f

ood

cert

ific

atio

n (f

orex

port

s), p

er W

T/A

CC

/SPE

C/K

HM

/15/

Cap

acity

bui

ldin

g fo

r ke

y C

amco

ntro

l,N

CC

, and

TW

Gs

pers

onne

lim

plem

enta

tion

of th

e ab

ove

regu

lat

Upd

atin

g th

e C

odex

Lib

rary

.

prod

ucts

Rev

.1.

on th

eio

ns.

2004

-200

5

Rea

djus

tmen

t of

tech

nica

l reg

ulat

ions

,ne

w s

cien

tific

disc

over

ies

and

appr

oach

es.

Wor

king

tow

ard

accr

edita

tion

of in

spec

tion

bodi

es a

nd te

stin

g la

bC

apac

ity b

uild

ing

for

key

Cam

cont

roim

plem

enta

tion

of th

e ab

o

Upd

atin

g th

e C

odex

L

sta

ndar

ds a

ndpr

oced

ures

in a

ccor

danc

e w

ith

orat

orie

s.l,

NC

C, a

nd T

WG

spe

rson

nelo

n th

eve

regu

latio

ns.

ibra

ry.

2006

-200

7

Full

impl

emen

tatio

nof

the

WT

OA

gree

men

t on

the

App

licat

ion

of S

anita

ry a

ndPh

ytos

anita

ryM

easu

res

Not

late

r th

an1

Janu

ary

2008

111

Tab

le 1

2: A

ctio

n Pl

an f

or I

mpl

emen

tatio

nof

the

Agr

eem

ent o

n T

rade

-Rel

ated

Asp

ects

of

Inte

llect

ual P

rope

rty

Rig

hts

Dea

dlin

eA

ctio

nPr

omul

gatio

nof

the

Law

onM

arks

, Tra

deN

ame

and

Act

s of

Unf

air

Com

p

bers

hip

in:

-W

IPO

(si

nce

1995

)-

the

Pari

etiti

on o

f7

Febr

uary

200

2

Law

on th

eM

anag

emen

t of

Phar

mac

eutic

als

Mem

s C

onve

ntio

n (s

ince

1998

)

2002

or

befo

re

Prom

-L

awon

Pat

ents

, Util

ity M

odel

s an

d In

dust

rial

Des

igns

of22

Jan

uary

2003

Cop

yrig

ht &

Rel

ated

Rig

hts.

Mem

- G

entio

n

latio

nsfo

r L

aws

on M

arks

,T

rade

Nam

e an

d A

cts

of U

nfai

r C

ompe

titio

n

Cap

acity

bui

ldin

g fo

r ke

yIP

per

sonn

el in

the

fiel

dof

trad

emar

ks

2003

ulga

tion

of:

-L

aw o

n

bers

hip

in:

-th

e B

erne

Con

vent

ion

enev

aPh

onog

ram

Con

v-

Bru

ssel

sSa

telli

teC

onve

ntio

n-

the

Pate

nt C

oope

ratio

n T

reat

y

Impl

emen

tatio

nof

the

Sub-

Dec

ree

and

impl

emen

ting

regu

Rev

iew

of a

ll re

leva

nt te

xts

byW

orki

ng P

arty

Prio

r to

dat

eof

acce

ssio

n

112

Act

ion

Dea

dlin

ePr

omul

gatio

n of

-L

aw o

nG

eogr

aphi

cal I

ndic

at-

Civ

ilC

Impl

emen

tatio

nof

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-Dec

ree

and

impl

emen

ting

regu

la

Cap

acity

bui

ldin

g fo

and

Indu

str

Not

ions

ode

tions

for

Law

s on

Cop

yrig

hts

&R

elat

ed R

ight

s; P

aten

ts,U

tility

Mod

els

and

Indu

stri

alD

esig

ns.

r ke

yIP

per

sonn

el in

the

fiel

dof

cop

yrig

hts;

Pate

nts,

Util

ity M

odel

sia

l Des

igns

.

late

rth

an1

Janu

ary

2005

Prom

sclo

sed

Info

rmat

ion

and

Tra

deSe

cret

t Var

iety

Pro

tect

ion.

-C

ivil

Proc

edur

e C

ode

n of

New

Var

ietie

s of

Pla

nts

Impl

r :

ion

and

Tra

de S

ecre

t.

Cap

acity

bui

ldin

g fo

r ke

yIP

per

sonn

el in

the

fiel

dsof

Geo

grap

hica

lInd

icat

ions

, and

Prot

ectio

n of

Und

iscl

osed

Inf

orm

atio

nan

d T

rade

Secr

et

Not

late

r th

an1

Janu

ary

2006

ulga

tion

of:

-L

awon

Lay

out D

esig

n of

Inte

grat

ed C

ircu

its.

-L

aws

on P

rote

ctio

nof

Und

i-

Law

on

Plan

- C

rim

inal

Cod

e

Mem

bers

hip

in th

eIn

tern

atio

nal C

onve

ntio

nfo

r th

e Pr

otec

tio

emen

tatio

nof

Sub

-Dec

ree

and

impl

emen

ting

regu

latio

nsfo

-L

aw o

n G

eogr

aphi

cal I

ndic

atio

ns-

Law

on

Prot

ectio

n of

Und

iscl

osed

Inf

orm

at

113

Act

ion

Dea

dlin

eIm

plem

enta

tion

of S

ub-D

ecre

e an

d im

plem

entin

g re

gula

ti

-L

awon

Lay

out D

esig

n of

Inte

grat

ed C

irL

aw o

n Pl

ant V

arie

ty P

rote

ct

Cap

acity

bui

ldin

g fo

r ke

yIP

per

sonn

el in

the

fiel

dsof

trad

emar

ks;

copy

righ

ts;

eut

ility

mod

els,

and

indu

stri

alde

sign

;ge

ogra

phic

al in

dica

tions

;pr

otec

tion

iscl

oin

form

atio

prot

ectio

n.

Est

ablis

hmen

t of

any

nece

ssar

y ad

ditio

nal l

egis

latio

n an

dre

gula

tions

topr

ovid

alba

sis

for

enfo

rcem

ent m

echa

nism

s.

No

l1

Janu

ons

for:

cuits

-io

n.

pat

nts,

of u

ndse

dn

and

trad

e se

cret

;la

yout

des

ign

of in

tegr

ated

cir

cuits

; an

dpl

ant v

arie

ty

e a

leg

ater

than

ary

2007

Full

erty

impl

emen

tatio

n of

the

Agr

eem

ento

n T

rade

-Rel

ated

Asp

ects

of

Inte

llect

ualP

rop

Rig

hts

No

late

r th

an1

Janu

ary

2007

114

Atta

chm

ent

O C

onfo

rmity

Age

nda

for

Ena

ctin

g L

aws

for

WT

Law

ent(

s)St

atus

of

Dra

ftl D

ate

(Pa

rlia

men

t)A

gree

mE

xpec

ted

App

rova

YE

AR

200

11.

enti

ener

alen

t.20

01R

atif

icat

ion

of th

e IC

SID

Con

von

GA

dopt

edby

the

CM

; Ado

pted

by th

ePa

rlia

m2.

forc

emen

t of

Fore

ign

Gen

eral

opte

dby

the

Cou

ncil

of M

inis

ters

(C

M);

Ado

pted

by th

ePa

rlia

men

t.20

01R

atif

icat

ion

ofth

e N

ew Y

ork

Con

vent

ion

(En

Arb

itral

Aw

ards

)

Ad

3.en

eral

ePa

rlia

men

t.Se

ptem

ber

2001

Lan

d L

awG

App

rove

dby

the

CM

; Ado

pted

by th

4.G

ener

alob

er20

01.

amen

tary

app

rova

lR

oyal

Dec

ree

on C

oope

rativ

esA

dopt

edby

the

CM

and

issu

edon

Oct

No

parl

i5.

Law

on T

rC

ompe

titio

nA

dopt

edby

the

CM

inR

atif

icat

ion

by th

ePa

rlia

mad

emar

ks a

nd A

cts

ofU

nfai

rT

RIP

SO

ctob

er20

01; A

wai

ting

for

ent.

Dec

embe

r 20

01

YE

AR

200

26.

Sub-

Dec

ree

on I

nqui

ry P

oint

s fo

r(1

Serv

ices

,(2)

SPS

, and

(3)

TB

Tic

alB

arri

ers

to

itary

and

ytos

anita

ryM

easu

res

Ado

ptio

n by

CM

exp

ecte

d Ju

ne20

02.

No

Parl

iam

enta

ry a

ppro

val

)T

echn

Tra

deSa

nPh

7.en

eral

gust

2002

Aug

ust 2

002

Fore

stry

Law

GA

dopt

edby

the

Parl

iam

ent i

n A

u8.

GA

TS

to th

e Pa

rlia

men

t in

20 J

une

2002

Post

al S

ervi

ces

Law

A

dopt

ed a

t the

CM

and

sub

mitt

edD

ecem

ber

2001

.9.

Law

oM

odel

s, a

ndIn

dust

rial

Des

igns

nPr

otec

tion

of P

aten

t, U

tility

T

RIP

SA

dopt

edby

the

Parl

iam

ent i

n N

ovem

ber

2002

.D

ecem

ber

2002

10.

Acc

ount

ing

Law

G

Ado

pted

by th

e Pa

rlia

men

t.en

eral

Nov

embe

r20

02Y

EA

R 2

003

11.

Law

on C

opyr

ight

s an

dR

elat

egh

tsA

dopt

edby

the

Parl

iam

dR

iT

RIP

Sen

t in

Janu

ary

2003

.Fe

brua

ry 2

003

12.

Am

endm

ent o

f th

e L

awon

Ien

tG

Ado

pted

by th

e Pa

rlia

men

t in

Febr

uary

2003

nves

tmen

eral

.Fe

brua

ry 2

003

13.

Sub-

Dec

ree

on A

nim

al Q

uaA

dopt

edby

CM

in F

ebru

ary

2003

.N

opa

rli

rant

ine

SPS

amen

tary

app

rova

l 14

.Su

b-D

ecre

e on

Pla

nt Q

uara

Ado

pted

by C

Min

Febr

uary

2003

.N

oPa

rlia

mnt

ine

SPS

enta

ry a

ppro

val

15.

Law

on B

usin

ess

Ent

erpr

ises

Gen

eral

Ado

pted

by C

M in

Apr

il 26

,200

2 an

d to

the

Parl

iam

ent i

nJu

ne 2

002.

Nov

embe

r 20

03

16.

Tou

rism

and

Ent

erta

inm

ent L

aw

GA

TS

Subm

issi

on to

the

CM

is e

xpec

ted

in M

arch

200

3 an

d to

the

Parl

iam

ent i

n A

pril

2003

.N

ovem

ber

2003

115

Law

Agr

eem

(s)

Stat

us o

f D

raft

Exp

ecte

d A

ppro

val

ent

Dat

e (

Parl

iam

ent)

17.

Neg

otia

ble

and

Paym

ent T

rans

actio

n L

awSu

bmis

sion

toC

M in

Mar

ch20

03 a

nd to

thA

pril

2003

.G

ener

ale

Parl

iam

ent i

nD

ecem

ber

2003

18.

Cus

tom

s C

Cus

tom

s V

altio

nR

ules

oG

Ada

pted

by

the

CM

inD

ecem

ber

2002

and

sub

mPa

rlia

men

t in

Janu

aod

eua

fO

rigi

nA

TT

199

4

itted

to th

ery

2003

.D

ecem

ber

2003

19.

Lan

d T

raff

ic L

aw(H

ighw

ayC

ode)

Gen

eral

Wor

ks a

ndon

to C

Mis

expe

cted

in20

01an

d to

Dec

embe

r 20

03

Dra

ft c

ompl

eted

by th

e M

inis

try

of P

ublic

Tra

nspo

rts;

Subm

issi

the

Parl

iam

ent i

n Ja

nuar

y 20

02.

20.

Wat

er R

esou

rces

Man

agem

ent L

aw

Gen

eral

sour

ces

and

expe

cted

inA

pril

Dec

embe

r 20

03

Bei

ngdr

afte

dby

the

Min

istr

y of

Wat

er R

eM

eteo

rolo

gy; s

ubm

issi

on to

the

CM

is20

03 a

nd to

the

Parl

iam

ent i

n M

ay 2

003.

21.

Wat

erSu

pply

Law

G

ener

alM

ines

, and

he C

Mis

exp

ecte

d in

Mar

ch20

03D

ecem

ber

2003

B

eing

draf

ted

by th

e M

inis

try

of I

ndus

try,

Ene

rgy;

sub

mis

sion

to t

and

to th

e Pa

rlia

men

t in

Apr

il 20

03.

Y00

4E

AR

222

.L

awon

Exp

ort P

roce

ssin

g Z

ones

GA

TT

1994

inis

try

ofIn

dust

ry,M

ines

and

arch

200

3 an

dJa

nuar

y 20

04(E

PZs)

Dra

ft c

ompl

eted

by th

e M

Ene

rgy;

Sub

mis

sion

to C

M is

expe

cted

in M

toth

e Pa

rlia

men

tin

Sept

embe

r 20

03.

23.

Com

mer

cial

Arb

Subm

issi

on to

CM

is e

xpec

ted

in F

ebru

ary

Parl

iam

ent i

n M

arch

2003

.itr

atio

n L

aw

Gen

eral

2003

and

to th

e Ja

nuar

y 20

04

24.

Civ

ilA

viat

ioG

Dra

ftco

mpl

eted

by

the

Stat

e Se

cret

aria

t fo

Subm

itted

toC

M in

Jun

e 20

02 a

nd to

thD

ecem

ber

2002

.

n L

aw

ener

alr

Civ

ilA

viat

ion;

e Pa

rlia

men

t in

Janu

ary

2004

25.

Inso

lven

cy L

aw

Gen

eral

CM

is e

xpec

ted

in M

arch

2003

and

to th

eJa

nuar

y 20

04Su

bmis

sion

toPa

rlia

men

t in

Apr

il 20

03.

26.

Secu

red

Tra

nsac

tions

Law

Gen

eral

03 a

nd to

the

Febr

uary

200

4Su

bmis

sion

toC

M is

exp

ecte

d in

Oct

ober

20Pa

rlia

men

t in

Dec

embe

r 20

03.

27.

Com

mer

cial

Con

trac

tD

raft

com

plet

edby

the

Min

istr

y of

Com

mer

cto

CM

isex

pect

ed in

Nov

embe

r20

03 a

nd to

in D

ecem

ber

2003

.

s L

awG

ener

ale;

Sub

mis

sion

the

Parl

iam

ent

Febr

uary

200

4

28.

Com

mer

cial

Lea

sin

Dra

ft c

ompl

eted

by th

e M

inis

try

of C

omm

to C

M is

exp

ecte

d in

Dec

embe

r20

03 a

ndg

Law

G

ener

aler

ce;S

ubm

issi

onto

the

Parl

iam

ent

in J

anua

ry 2

004.

June

200

4

29.

Tel

ecom

mun

icat

ions

Law

GA

TS

Dra

ft u

nder

rev

iew

by th

e M

inis

try

ofPo

st a

ndT

elec

omm

unic

atio

ns; S

ubm

issi

on to

CM

is e

xpec

ted

in

Oct

ober

200

3an

d to

the

Parl

iam

ent i

n D

ecem

ber

2003

.

June

200

4

116

Law

ent

Dat

e (

Parl

iam

ent)

Agr

eem

(s)

Stat

us o

f D

raft

Exp

ecte

dA

ppro

val

30.

Fish

erie

sB

eing

draf

ted

by th

e M

inis

try

of A

gric

ultu

re,

Fish

erie

s;Su

bmis

sion

toC

Mis

exp

ecte

d in

an

d to

the

Parl

iam

ent i

n Ja

n

Law

SP

SFo

rest

ry a

ndD

ecem

ber

2003

ua

ry 2

004.

June

200

4

3on

Lay

out D

esig

ns o

fIn

tegr

ated

Cir

cuit

TR

IPS

ines

, and

is e

xpec

ted

in

Febr

uary

200

4.

July

200

41.

Law

TA

requ

este

dby

the

Min

istr

y of

Ind

ustr

y,M

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rgy

to p

repa

redr

aft;

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issi

onto

CM

Sept

embe

r 20

03 a

nd to

the

Parl

iam

ent i

n32

.L

awon

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ntV

arie

ty P

rote

ctio

nT

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es, a

ndM

is e

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ted

in

embe

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embe

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ted

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e M

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of I

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try,

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nerg

y to

pre

pare

draf

t; Su

bmis

sion

toC

Mar

ch20

03 a

nd to

the

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iam

ent i

n Se

pt33

.L

awon

Saf

egua

rd M

easu

res

Safe

guar

dser

ce to

prep

are

epte

mbe

r 20

03 O

ctob

er20

04T

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ques

ted

by th

e M

inis

try

of C

omm

draf

t; Su

bmis

sion

to C

M is

exp

ecte

d in

San

d to

the

Parl

iam

ent i

n A

pril

2004

.34

.L

awon

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i-du

mpi

ng M

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ount

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of

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ce to

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to C

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tem

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men

t in

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.

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ober

200

4d

onA

nti-

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Sub

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este

dby

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i

35.

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on

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grap

hica

l Ind

icat

Incl

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g A

ppel

latio

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TA

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este

dby

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me

draf

t; Su

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sion

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the

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iam

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ne 2

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ions

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and

to

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36.

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on

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IPS

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bmis

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to th

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men

t in

f U

ndis

clos

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form

atio

nrc

eto

prep

are

tobe

r 20

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nd M

arch

200

4.

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r 20

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37.

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onR

ules

of

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mer

cdr

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uth

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rlia

men

t in

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004.

les

of O

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topr

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ene

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and

toD

ecem

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38.

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Est

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rtG

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ecem

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and

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the

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alce

and

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issi

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rlia

men

t in

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4.

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39.

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eG

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ustic

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in J

une

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and

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rlia

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Dec

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117

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e (

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ode

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e Pa

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ber

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4

41.

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min

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roce

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s C

ode

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ne20

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the

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iam

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nD

ecem

ber

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B

eing

unde

rre

view

by th

e M

inis

try

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ust

to June

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4.42

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rim

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ptem

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e Pa

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men

tN

ovem

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ewby

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ch20

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AR

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543

on L

ayou

t Des

igns

of

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ines

, and

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in

2004

.

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June

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d to

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n A

ugus

t44

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,Min

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ly20

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45.

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sin

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ompl

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d in

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and

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ePa

Aug

ust 2

004.

gL

awG

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mer

ce; S

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onrl

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05

46.

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chan

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awB

eing

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ublic

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nspo

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sub

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to th

e C

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exp

ect

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and

to th

e Pa

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me

GA

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ks a

nded

in N

ovem

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nt in

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47.

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on

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rmat

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TR

IPS

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me

draf

t; Su

bmis

sion

to C

M is

expe

cted

inO

ctto

the

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iam

enti

n N

ovem

b

rce

topr

epar

eob

er 2

004

and

er 2

004.

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ch 2

005

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onA

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dum

ping

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bsid

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dby

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d on

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mer

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118

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pect

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in N

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ode

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ures

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il 20

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52.

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plet

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mer

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xin

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in D

ecem

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and

toM

arch

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4.54

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ivil

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ober

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t in

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try

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ustic

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Dec

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55.

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on S

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y of

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ce to

prep

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r 20

04 J

uly

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and

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t in

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.

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57.

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nanc

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and

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en

Oct

ober

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5.

Janu

ary

2006

Gen

eral

Bei

ngdr

afte

dby

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Min

istr

y of

Eco

nosu

bmis

sion

to th

e C

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exp

ecte

d in

JuPa

rlia

men

ti

Tab

le 1

(b):

Lis

t of

Stat

e-ow

ned

ente

rpri

ses

(as

per

Mar

ch20

03)

No.

Min

istr

y o

f en

terp

rise

Nam

eI.

STA

TE

-OW

NE

DE

NT

ER

PRIS

ES

1.M

inis

try

of A

gric

ultu

re, F

ores

try,

and

Fish

erie

s C

ompa

ny;

any;

Mem

ut R

ubbe

r Pl

anta

tion

Com

pany

;C

ham

kar

And

aung

Rub

ber

Plan

tatio

n C

ompa

ny;

Snuo

lrub

ber

Plan

tatio

n C

ompa

ny;

Pem

Cha

ng R

ubbe

rpl

anta

tion

Com

pany

;

Chu

p R

ubbe

rPl

anta

tion

Kre

k R

ubbe

r Pl

anta

tion

Com

p

119

120

Com

pany

; s

Com

pany

B

oeun

g K

et R

ubbe

r Pl

anta

tion

Agr

icul

tura

l Inp

ut2

Min

istr

y of

Pub

lic W

orks

and

Tra

nor

t Si

hano

uk V

Phno

m P

enh

Port

; K

ampu

chea

Shi

ppin

g A

genc

y an

d B

roke

r (K

AM

SAB

Lab

orat

ory

of C

onst

Roy

al R

ailw

Nea

k L

oPr

ek K

dam

Fer

ry

. sp

ille

Port

;

);

ruct

ion;

ay

of

Cam

bodi

a;

eung

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ry;

3Ph

nom

Pen

h M

unic

ipal

ity

Phno

m P

enh

Wat

er S

. up

ply

4.nd

Ene

rgm

bodi

a (E

DC

) M

inis

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of I

ndus

try,

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es a

y E

lect

rici

ty o

f C

a5.

Min

istr

y of

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nom

y an

d Fi

nanc

e R

ural

Dev

elop

men

t Ban

k 6.

M

inis

try

of C

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G

reen

Tra

de C

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II.

JO

INT

-VE

NT

UR

E E

NT

ER

PRIS

ES

(51

per

cent

Sta

te p

artic

ipat

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C

amin

tel C

ompa

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Cam

bodi

a Ph

arm

aceu

tical

Ent

erpr

ises

PREPARATION FOR WTO ACCESSION:

THE CASE OF ETHIOPIA

Mamo Esmelealem Mihretu LLM, Trade and Investment Law (Pretoria/Amsterdam)

wayewi@yahoo.com

19 January 2005

By:

121

This study documents Ethiopia’s preparation for WTO accession. Liberaliintegration into the world trading system were the main directions of Ethiopiatrade policy, pursuant to which Ethiopia applied for WTO membership. In EDiagnostic Trade Integration Study (DTIS) tried to identify the key constracountry’s integration into the multilateral trade system and into the global eclooking at both the supply and demand factors that influence the present levwith the rest of the world. Key government organs, representatives of the privcivil society and bilateral development partners were involved in overseeingprocess. It identified key prioriti

agriculture, manufacturing and tourism.

When it comes to the accession process, it was understood at the outset thatgenerated by this process is complex and includes submitting highly technical dto the WTO Secretariat and Working Party for Ethiopia’s accession and cbilateral and multilateral negotiations; major revisions to national legisimplementing institutions, establishing appropriate organizational andstructures within the government and securing donor support; andstudies, training activities, and consultations with stakeholders. Therefore, the Ethiogovernment decided to prepare a “WTO Accession Roadmap” that structure thand indicate approximate timing, priorities, and options regarding key issues.

The Ethiopian Roadmap to WTO accession identified two important orgissues. First it was clear from the beginning that the process of accession wilsignificant workload for the government. With highly skilled staff small in nalready stretched to limit by other bilateral trade negotiations, it seems obforeign advisory services will need to be used to a significant extent so that theprocess can be carried forward expeditiously. At the same time, it was the cleintention of the government that the government itself remains in charge of maaccession process. While other acceding countries have delegated lead role to foreign

Executive Summary

zation and’s foreignthiopia, a

ints to theonomy byel of tradeate sector,the DTIS

es as related to trade policies, legal and regulatoryenvironment, institutions, and trade facilitation as well as economic sectors such as

the tasks ocumentsonducting

lation and reporting

managing analytical pian

ese tasks,

anizationall present a umber and vious thataccession

arly statednaging the

advisors financed by bilateral donors, this approach was politically unacceptable for the Ethiopian government as it will lead to conflict of interest and lack of ownership of theaccession process. Accordingly, the Roadmap suggested a significant supporting role forForeign advisory services in those areas where adequate domestic expertise does not yet

122

exist, with a view to developing such expertise as the WTO accession nego

The second organizational issue is the location of the unit that does thegroundwork for WTO accession, i.e. prepares documents, coordinates the contrelevant ministries, manages training activities and consultations with stakehoThe Ethiopian government opted to leave the existing administrative structureWTO department is placed under the Ministry of Trade and Industry intact alRoadmap discusses the possibilities of creating a specialized governmnegotiations under the leadership of a minister-level official.

Key to successful WTO accession and membership is the existence of clear ancommunication with all of the stakeholders involved in the WTO. These partirelevant ministries, domestic businesses, donors and others. The Ethiopian roWTO accession therefore advincluding parliament, regional officials, the business community, civil society,possible negotiating positions.

A large part of the workload related to WTO accession consists in bringinlegislation (laws, regulations, administrative practices) and the institutional strits implementation into accordance with WTO rules, which are part of thUndertaking” and therefore not negotiable. Donor assistance can enable Eshoulder the significant administrative costs of the accession process and to imany WTO rules. The need to coordinate donor activities is also recognized asforeign consultants with overlapping mandates giving conflicting recommwould entail

tiationsprogress.

technicalribution oflders, etc.where the

though theent unit for trade

d continuales includeadmap to

ised the government to consultant with relevant partiesregarding

g nationaluctures fore “Singlethiopia tomplementtoo manyendations

much waste of time and money .The Ethiopian WTO Roadmap outlinedpossible areas of donor support in some detail, ranging from physical infrastructure through foreign advisory services(continuous and case by case),analytical and impact studies, training and capacity building and comprehensive legislative and institutional modernization.

123

1. Introduction

Liberalization and integration into the world trading system were the main diEthiopia’s foreign trade policy, pursuant to which Ethiopia applied for WTO min 2003. Presently, Ethiopia’s WTO accession process is in an opening stagenegotiations on trade in goods and services are not yet started, and considerremains to be done to bring Ethiopia’s legislative and regulatory system into cwith the WTO principles and requirements. The overall objective of this panalyze Ethiopia’s WTO accession process with the aim to: a) show the evEthiopia’s trade policies and related legislative and institutional reforms asWTO accession b) highlight the main challenging issues and documentpreparation for WTO accession c) make an assessment of the current staccession process. For these purposes, section 2 reviews trade policy impleEthiopia over the last 10 years as well as the institutional framework. Sectionthe process and the current status of Ethiopia’s accession to the WTO.examines Ethiopia’s preparation for WTO accession while section 5 looks into the possible implication of WTO membthe main conclusions based on the analysis m

2. Trade Integration in Perspective

Ethiopia began to emerge from an economically damaging period in 1991,military regime known as the Derg was overthrown after 17 years of rule (19In 1992, the new Government launched an economic reform programme amoving towards a market economy. This New Economic Policy took the creaenabling environment for both domestic and foreign private investment asobjectives. The series o

rections ofembership: bilateralable workonformityaper is toolution of related toEthiopia’sate of the mented in3 analyzesSection 4

ership for Ethiopian economy. Section 6 summarizesade in the previous sections.

when the74–1991).nd begantion of anone of its

f reforms since then have shifted the policy regime of the 1980s and did go a long way to create enabling environment for private sector investment.Progress in a liberalizing direction has been slow but it has been steady, and the private sector in Ethiopia (both foreign and domestic) agrees that the pace has picked up sharply over the past year or two107.

107 UNCTAD(2004) ,An Investment Guide to Ethiopia:Opportunities and Conditions p.1.

124

Ethiopia at a glance

Official name Federal Democratic Republic of Ethiopia

Political system Federal state with multi-party democracy

Surface area 1,133,380 sq. km

Population 70 million

Population density 62 per sq. km

GDP per capita $100 (at purchasing power parity $800)

Currency Birr

Exchange rates (February 2004) $1 = Birr 8.65

€1 = Birr 10.07

Official language Amharic is the working language of the Federal Government.English is widely used in business, in colleges.

Principal religions Christian (61.7 %), Muslim (32.8 %),

Source: World Development Indicators Database, and UNCTAD.

Ethiopia is unique in several respects.

It began its development efforts in earnest slightly more than a decade ago, folend of the Derg regime in 1991. It started this quest from a very low per capbase and with nearly all the indicators of human welfare from health, education to nutrition at low levels.

lowing theita income

The country is also predominantly peasant agriculture. This sector accounts for 40% of the Gross Domestic Product (GDP), 63% of exports, and 80% of employment. Coffee in particular is critical to the Ethiopian Economy.

125

GDP by Sector in 2002/2003

Source: OECD The g

Federal Democratic Republic of Ethiopia (FDRE). It is to be aAgriculture Lead Industrialization Strategy (ADLI).In other words, increasing agriculture productivity lies at the heart of poverty reduction given the importance of agrthe economy in national output, employment and exports.

overnment believes that the country can’t proceed to transform its economywithout raising agricultural productivity and modernizing the economy from a peasant subsistence agriculture to a commercial agriculture. This is indeed one of the goals of the

chieved through

iculture inigure alsofacturing

for about 12% of GDP. The service sector comprised of social services, trade hotels and restaurants, finance, real estate, and transport and communication accounts for about 45%of GDP.

2.1 Development Goals and Strategies of the Government of Ethiopia

For some countries, economic growth is the primary policy goal, and poverty reduction is to be achieved through measures complementary to growth. This is not the approach of

108As the above findicates, the industrial sector, which comprises small and medium-scale manuindustries, handicrafts, mining and quarrying, construction, electricity and water accounts

108 DTIS(2003),Ethiopia:Trade and Transformation Challenges-Diagnostic Trade and IntegrationStudy,P.12

126

the Ethiopian government. Poverty reduction is the core objective of thegovernment. Economic growth

109

The fundamental development objective ofm which enables the economy develop rapidly and poor people to beic ries from economic growth

Ethiopianis the principal, but not the only, means to this

objective .

the FDRE is to build a free-market economicsyste the mainbenef ia

The bro d PovertyRedu o

source oftion where the bulk of the poor live.

populace.e primary

y);n industry

l productsncreased support to export oriented manufacturing sectors particularly

ent;oing effort

o implementation of

ion-makingeness and service

delivery;ation of

k/provide-

¶ Agricultural research, water harvesting and small scale irrigation

110.

ad thrust of Ethiopia’s strategy during the Sustainable Development ancti n Program (SDPRP) period consists of111:¶ Overriding and Intentional focus on agriculture as the sector is the

livelihood for 85 % of the popula¶ The government gives overriding primacy to the welfare of rural

Agriculture is also believed to be a potential source to generatsurplus to fuel the growth of other sectors of the economy (industr

¶ Strengthening private sector growth and development especially ias means of achieving off-farm employment and output growth (including investment in necessary infrastructure);

¶ Rapid export growth through production of high value agriculturaand iintensified processing of high quality skins/leather and textile garm

¶ Undertake major investment in education and strengthen the on gon capacity building to overcome critical constraints tdevelopment programs;

¶ Deepen and strengthen the decentralization process to shift deciscloser to the grass root population, to improve responsiv

¶ Improvements in governance to move forward in the transformsociety, improve empowerment of the poor & set frameworenabling environment for private sector growth and development;

109 The Federal Democratic Republic of Ethiopia:Poverty Reduction Strategy Paper,P.,36110 Ibid.111 Ibid.

127

¶ Focus on increased water resource utilization to ensure food securit

A noteworthy chReduction Program (SDPRP) is therefore the clear attemdevelopment and rapid exporExport growth is perceived as one instrument of a broader development strIndustrial Policy also emphasizes the export-led industrialization whereindustrial sub sector; the export industry will play a leading role.

y;

aracteristic of Ethiopia’s Sustainable Development and Poverty pt to integrate private sector

t growth into a more comprehensive development program.ategy. Thewithin the

TO membership on January 2003113,her words,country isolicy step.stic trade

he DTIS isintegration

additional step forward fully consistenting of thenomy and e reforms

implemented resulted in a significant cut in import tariff rates, a reduction of the tariff dispersion and a decrease in the level of applied rates. At present, the country’s trade protection system includes no quotas, no seasonal tariffs and no tariff contingent, and

112

2.2 Ethiopia’s Trade Policy

Ethiopia had never been a signatory party of the GATT, and obtained the WTO observer status in October 1997. The country applied for Wand has just completed the Memorandum on the foreign trade regime. In otEthiopia’s accession process to the WTO is still in an opening phase, and thedeveloping various analyses in order to prepare itself to this important trade pAmong these studies, an important one was finalised in 2003: the diagnointegration study (DTIS).114 As we shall see later in this paper, the purpose of tnot limited to WTO accession but to identify key constraints to the country’sinto the multilateral trade system and the global economy.

Ethiopia’s application for WTO membership is anwith a policy that started approximately ten years ago. Indeed, since the beginn1990s, Ethiopia has been making significant progress toward opening up its ecohas notably improved its trade policy regime115. More specifically, the trad

112 MoTI,Industrial Development Strategy(Unofficial English Translation).P.32113 The General Council established the Working Party on February 2003.114The DTIS is a preliminary step in the Integrated Framework (IF) process. The IF was established in October 1997, and aims at facilitating the co-ordination of trade-related technical assistance to LDCs andpromoting an integrated approach to assist these countries in enhancing their trade opportunities.115 Subramanian A. et al. (2002), Trade and Trade Policies in Eastern and Southern Africa, IMF,Washington.

128

quantitative restrictions have been almost entirely eliminated. Currently, they aonly to used clothes and for security and safety reasons.

Among the other major improvements are the significant reductions in theitems included in the negative list used to determine import eligibility fexchange access, as well as the conversion of most specific tariffs into ad valoBy now, specific rates are used only for less than 3% of total tariff lines. Conthe current Ethiopia tariff structure is roughly fully consolidated. In other wolarge majority of import duties and taxes haLikewise, as a result of the tariff reform, the range of tariff rates narrowed240% at the beginning of the 1990s to 0% - 80% in 1995. The current tariffintroduced in 2003, consists of six rates: 0%, 5%, 10%, 15%, 20% and the higDuring the same period, the tariff bands (the number of official tariff rates) wfrom 23 to 6. It is important to note that the current rates are very close to thosbe used for the common external tariff of COMESA’s Customs Union (CU),maximum rate will be 30%.

re applied

number of or foreignrem rates.sequently,

rds, a veryve been set up in the external tariff.

from 0% - structure,

hest 35%.as reducede that willwhere the

s to whichlinked to

f processing undergone by the products in the country. The lowest tariff levels are mainly applied to capital goods, while the highest are reserved to consumergoods. A COMESA study illustrates this point, showing that the average tariff rate for

aterials, intermediate goods and consumers carry an 117 rotection

minal and [nominal]n level of.0 percent

respectively" .

116.

As is often the case, the range of the rates in relation to the types of productthey are applied follows an ascending tariff system (tariff escalation), which isthe amount o

capital goods is 12%, while raw maverage rate of 15%, 15.5% and 28% respectively . Therefore, the effective pfor some goods is above the nominal protection. The DTIS compared noeffective protection in Ethiopia, stating that a "weighted-average rate ofprotection of 22.2 percent in 1995 was associated with an effective protectio36.2 percent. The comparable figures for 2001 were 14.7 percent and 26

118

116 COMESA (2003), Preparation for the COMESA Customs Union, December, 2003.117 Ibid.118 DTIS (2003), Ethiopia: Trade and Transformation Challenges - Diagnostic Trade and Integration Study,Annex 1: The Synthesis.

129

2.3 Trade Structure Ethiopia’s 1999-2001 average total export value to the world was US$ 367 million,having grown at 5.25% annually since the early 1990s.In the mean time, the country’s 1999-2001 average total import value was US$ 887 million, having grown at 0.29%annually since the early 1990s.Ethiopia’s dominant export product group is coffee and live animals which accounts for 65.57% of the total export with an annual change of 6.75%.The second major export product group is non-oil raw materials such as hide and skins, oil seeds,etc., accounting for 17.87% of the total export. On the other hand, Ethiopia imports various products such as motor vehicles, capital goods, etc.119

Source: UNCTAD and National Bank of Ethiopia

119. World Bank Group, Country Analytical Briefs: October 2004

130

131

Source: UNCTAD and National Bank of Ethiopia

The EU is the leading export market as well as supplier for Ethiopia. Coffee is the leading product group exported to the EU, followed by leather. In the mean time, the EU supplies a wide range of products to Ethiopia. Next to EU, Asia is the second largest trading partner for Ethiopia. The country’s export to Asia accounts for more than 20% of the country’s total export and has been growing steadily at 5.29% annually. In particular, Japan imports Ethiopia’s coffee in large amounts. On the other hand, Ethiopia importsfrom Asia includes automotive related goods such as iron and steel products, motorvehicles and rubber tires.

Current Account (Percentage of GDP)

Source: OECD

Source: UNCTAD

As can be seen from the above chart, Ethiopia’s trade balance is structurally ne2002, total merchandise exports, with a value of around $400 million, weretimes smaller than merchandise imports, totalling $1.6 billion. Moreover, threcorded in 2002 was higher than in 1

At the bilateral level, Ethiopia also recorded trade deficits with practicallypartners. In 2002, among its roughly 140 trading partners, Ethiopia registered a trade surplus with only 20 of them.its relations with a limited number of countries. In 2002, five countries (thUnited States, Saudi Arabia, China and the United Arab Emirates) accounted fthe trade deficit.

The analysis of Ethiopia’s trade balance byexporter of almost exclusively two categories, namely agricultural goods atextiles and garments, while importing broadly every category of products.Ethiopia recorded surpluses in agricultural and food products as well as in leathand garments, but showed deficits in all the other main product groups. In

gative. Inabout foure trade deficit

995, when the exports/imports ratio was 1: 2.5.120

all of its

Ethiopia’s structural trade deficit is broadly explained by e EU, theor 63% of

product is simple, being the country an nd leather,

In 1995,er, textiles2002, the

picture is broadly identical except one major change: the country shows a deficit in textiles and garments.121

Unsurprisingly, the most significant import categories are also the major sources of trade deficits. This means that, in descending order, machinery and equipment, chemicals

120 National Study on the Impact and Sustaniability of the EPA for Ethiopia., P.27121 Ibid.

132

products, transport equipment, raw materials, minerals and fuel are all in deficirespect to Ethiopia’s trade with all partners.

t, with

d Status

ade policynment has degree of

ting

Ethi . Theissue ebates inEthi pros and cons opponentsargu domestic market to foreign

stand still e WTO as interest in

,it is difficult to say that the decision to start the accessioneffects areroups that

informal

atibility of the WTO

Agreements. Similarly, ten committees as per the different agreements of the WTO were set up. The study group and the committees submitted their findings to the Ministry of Trade and Industry which chaired the Steering Committee. The study concluded:

122

3. Accession of Ethiopia to the WTO: An assessment of Process an3.1 Decision to Join the WTO

Ethiopia’s decision to join the WTO is in line with its attempt to anchor its trreform process. Though Ethiopia is not a member to the WTO, the Goverundertaken the fundamental socio-economic policy change towards a greateropenness for reasons completely outside the WTO framework with the aim of integraEthiopia into the global markets in goods and services.

opia has gone a long way before finally decided to apply for WTO membershipof Ethiopia’s membership of WTO has been the focus of economic d

opia for quite some time. Some efforts have been exerted to examine theof Ethiopia’s membership to the WTO. In the course of these debates,

e that the immediate implication is the opening of thegoods, which will render many existing industries idle, bring most of them to aand eventually increase unemployment. Still, there are people who often see tha machine for endless and pointless liberalization and inclined little to take anGATT-WTO.Howevernegotiation has attracted sufficient public attention probably because its directnot yet known or felt. Nor does Ethiopia have strong industrial and financial gare eager to see Ethiopia joining the WTO and used both formal andmechanisms to influence government policy in this direction.

In 2000, the Ethiopian Government commissioned a study to assess the compEthiopia’s economic policies and accompanying laws and regulations vis-à-vis

122 Ibid

133

“….Ethiopia has in place an export-led economic policy and will benef

bring much pressure on the economic policy of thcommittee recommends that Ethiopia shou

top of this, in order to create awareness amont the multilateral trading system and the WTObeen organized in 1998 and 1999 in co

it from wider market access opportunities. Most of the rules and regulations are consistent with WTO agreements and complying with these agreements will not

e country. Therefore, theld join the WTO”123.

On g different stakeholders in Ethiopiaabou framework, two national workshops have llaboration with WTO and UNCTAD secretariats respectively.

As a re than five years, Ethiopia had tried to get well acquainted and be familiarized with the mult though it isdiffi thiopia's request for accessionwas circulated on 13 January 2003 and the General Council established a Working Party on 1 f the accession process, the Government of Ethiopia is now in the process of finalising its Memorandum on the Foreign Trade Regime, which is

[Finalised and to be submitted soon.]

tings

TBD: Documents on Agriculture, Services, SPS, TRIPS, Legislative Action Plan

TBD: Market Access Negotiations on Goods and Services

TBD: Accession Protocol

124

n observer in the WTO for moWTO Agreements and the working of the

ilateral trading system as well as building a negotiating capacity. Alcult to assess the impact of the various studies, the E

0 February 2003. As part o

due for submission to the WTO in the next few months. The Working Party has not yet met.

Ethiopia’s WTO Accession Process is Just Beginning January 2003: Application received-WT/ACC/ETH/1

February 2003: Working Party Established-WT/GC/M/78

TBD: Memorandum of Foreign Trade Regime.

TBD: Question and Replies

TBD: Working Party Mee

123 A summary of Studies Conducted to consider Ethiopia’s Accession to the WTO, June 2000.,p.12124 Introduction to the draft Ethiopian Memo., of Foreign Trade.

134

TBD: WTO Membership

Ethiopia’s decision to request WTO membership therefore is recent and capatrade area is still embryonic.

3.2 Rationale for JoinWTO membership becomes an objective for different countries for several reEthiopia, the overarching aim of trade integration to the global economy is toopportunities to transform the economy from a largely peasant agricultural ecomodern economy. For Ethiopia, a country with large and diverse resourcepotential, greater participation in world trade would provide additional opporaddress the challenging issues of economic growth and poverty reduction.

city in the

ing the WTOasons. Forexploit itsnomy to abase and

tunities to

ng secure

ation andrld marketbut also toalleviationowth andthe poor

tus from a

sustainedgricultural

export sector will significantly contribute to reducing the poverty situation in rural households. Similarly, better performance in the country's agro-processed and manufacture exports will reduce the incidence of poverty among the urban population through creating better employment opportunities and increasing the market for the actual and expected increase in agricultural production.126

125

Commercial BenefitsThe first important reason of joining the WTO for Ethiopia is increasi,transparent ,and predictable market access. As Ethiopia undertakes improvements in its trade regime, trade facilitinstitutional reform, it can increase the gains to these efforts more if the woopens greater opportunities to Ethiopia. This is important not only to export toimport at better prices than before. Market access issues are linked to povertyin a number of ways; greater market access allows a higher level of export grtherefore income growth. And, certain commodities that generate income forwill provide an additional impetus to poverty reduction, in addition to the imperise in income all around. The Ethiopian Government recognizes the importance of exports for rapid andeconomic growth, which is pro-poor. As the country's exports rely heavily on aproducts that originate mainly from smallholder peasant farming, developments in the

125 DTIS as above ,p.10 126 .PRSP.,p.108

135

However, most major trading nations in practice not only grant MFN trenonmember least developed countries like Ethiopia, but also move beyonddiscriminate in

access in shortmarkets, yet it loses shares in export markets due to low international compand supply-side. Although access to market on MFN basis is in practice anonmembers, it has always been subject to the prevailing diplomatic and politicThis uncertainty forces acceding countries into costly and unbalancednegotiations, which they could not afford and in which they would sedisadvantaged. For example, Ethiopia had to conclude 96 bilateral trade and traagreements mostly wNo doubt, WTO membership will transform a trade policy environment characunilateralism and discretion into one of rule based, secure MFN treatment

atment to that and

their favour under various trade preference schemes. Realistically, therefore the immediate benefits of WTO membership in terms of improving market

term is less evident. Ethiopia in principle have free access to major etitivenessvailable toal winds.127

bilateralverely bede related

ith WTO member countries to give and secure MFN treatment.128

terized byInstead of’s Disputecies. This thiopia toof market

arity about

ip is seen by Ethiopian government as credible means which in turn will help the country attract

ents, and ons to foreign and

domestic investors. The Ethiopian government considers fast accession to WTO important to enhance credibility and overcome perceptions of high risk of policy reversals and uncertainty.

Overall, participation in the multilateral, rule-based system far outweighs relying onbilateral and regional agreements. Although membership does not directly solve problems that arise out of poor domestic supply constraints, it improves the stability of

129.having to rely on bilateral negotiations, Ethiopia will have access to the WTOSettlement Mechanism to resolve potential conflicts over trade related polirepresents a significant improvement for Ethiopia. Therefore one reason for Eaccede to the WTO is to ensure the predictability, security and transparencyaccess. Indeed for business, WTO membership means greater certainty and cltrading conditions.

Economic Benefits

Secondly pursuing WTO membershof gaining enhanced international reputation, solid investment by translating concessions into international legal commitmthereby providing powerful guarantees of governments’ policy directi

127 .Mamo Esmelealem, Accession of LDCs to the WTO:The Terms and the Process(2004).P.,128 .Draft Memorandum For Foreign Trade Regime,p.75.129 M. Esmelealem, above,p.4

136

market access, helps improve good governance and played a role in stredomestic policies that support market economy and ensure transparency. WTO helps by opening up Ethiopia’s own market to greater competition and expanding copossibilities; by expanding export opportunities for efficient producers; and prframework of rules guaranteeing the first two benefits, and thus promotininvestment and development.

4. Preparation for Negotiations

4.1 Studies by State and Non-state actors

The major study that is conducted in relation to Ethiopia’s integration isTrade Integration Study (DTIS) under the Integrated Framework (IF) process.

ngthening

nsumptionoviding ag private

Diagnostic0

the Worldthe trade

t from the mplementsn a more

between trade and poverty reduction, and c) cific recommendations on systemic and sectoral issues such asof exports, improved market access, removal of trade constraints, reform

outputs invelopmententified in

teral tradend factors a program

ability to increase its participation in

13

The study, among other things, is also intended to help Ethiopia’s accession toTrade Organization by getting a detailed and well documented picture ofregime, the legal and institutional features of the regime and to enlist suppordonor community to help with the process. The DTIS prepared for Ethiopia cothe SDPRP by a) treating trade, private sector and investment issues icomprehensive manner, b) showing linkageproviding spediversificationof trade support institutions and facilitation, improvement of productivity andagriculture, livestock and meat, and manufacturing industry, as well as on deof tourism. In other words, it gives policy and strategy content to trade issues idthe Poverty Reduction Strategy Papers (PRSPs).

It identifies the key constraints to the country’s integration into the multilasystem and into the global economy by looking at both the supply and demathat influence the present level of trade with the rest of the world. It suggestsof technical assistance to strengthen Ethiopia’s

130 The Integrated Framework (IF) was established in 1997 by a high-level meeting of the World TradeOrganisation in order to facilitate the coordination of trade-related technical assistance (TRTA) to leastdeveloped countries (LDCs) and to promote an integrated approach to such assistance to ensure integration of trade with national development strategies. The six agencies participating in the IF are the IMF, ITC,UNCTAD, UNDP, the WTO, and the World Bank and they are supported by major bilateral developmentpartners.

137

world trade by enhancing its competitiveness and consequently deriving largfrom trade than at present. The technical assistance is to support the recommenactions identified by the earlier version of the DTIS that was extensively discusDTIS validation workshop in November 2003 that was further reviewed and rthe Technical Group constituted to guide the DTIS.

a) DTIS Process.

Two committees have been set up to oversee and provide continuous supportduring the IF/DTIS process, namely

others, officials oDevelopment which was responsible for the preparation of the PRSP, Ministry of Agriculture, key bilateral development partners, the heads of the three IFrepresented in Ethiopia

er benefitsdations forsed at theefined by

and advice, a) the National Steering Committee, and b) the

National Technical Committee. The National Steering Committee is comprised of, among f the Ministry of Trade & Industry, Ministry of Finance and Economic

agenciesChambersf Trade &

providesprised of

mbers of sented in

for IF. He ing a close link between the

two committees. The World Bank, UNDP, and the EU have been actively supporting the IF proc of their staff in the IF/DTIS TC,with the

b) Find

The DTIS has identified a number of constraints and issues that affect the performance of the trade sector in Ethiopia. They are related to trade policies, legal and regulatoryenvironment, institutions, trade facilitation as well as economic sectors such as

131, the President of the Ethiopian and the Addis Ababaof Commerce and other business community representatives. The Minister oIndustry is the Chair of the National Steering Committee.

The Technical Committee oversees technical issues of the DTIS process andtechnical advice to the National Steering Committee. The committee is comtechnical experts from relevant government ministries, agencies and major sectors engaged in international trade and trade facilitation, including the chacommerce, as well as officers of major bilateral and multilateral agencies repreEthiopia. The Head of the Foreign Trade Coordination Department of the Ministry ofTrade & Industry is the Chair of the Technical Committee and the Focal Pointis also a member of the National Steering Committee, provid

ess in Ethiopia through the regular participationEU playing the role of a facilitator.

ings of DTIS

131World Bank,UNDP and IMF.

138

agricultu mentsin trade tutions, and trade facilitation will serve th necessarybut not su ization ofEthiopia. O f Ethiopiahosted the “DTIS Validation Workshop”. Representatives from public and private sector,

iew of thehiopia.

recommendations to address

them under each thematic area with the following specific objectives:

a) Creating a conducive incentive structure for trade pian’s exports

c) Poverty reduction through trade, particularly export growth

trade and

services and thus removing “at the border” rder” constraints

ncing the

rmance of

The discussions at the Workshop indicated that issues and constraints identified in the

mendations made and Trade related technical assistance (TRTA)

proposed under each thematic area, are overall valid and acceptable.

re, manufacturing industry and tourism. The DTIS concludes that improvepolicies, legal and regulatory environment, instie goal of greater integration into the world economy. As such, they are

fficient to address the issues of poverty reduction and industrialn November 10-11, 2003, the Ministry of Trade and Industry o

civil society organisations, and the donor community contributed to the revDTIS and discussed the next steps of the Integrated Framework for TRTA in Et

The DTIS identified issues and constraints and proposed

b) Improving market access for Ethio

d) Increasing Foreign Direct Investment (FDI) e) Creating a conducive legal and regulatory framework for

investmentf) Improving trade facilitation

and “behind the bog) Building the capacity of trade support institutionsh) Increasing agricultural productivity and diversifying and enha

volume of exports from such sub-sectors as horticulture, livestock and meat, sugar, leather and textiles as well as enhancing the perfothe tourism sector.

DTIS, as well as recom

139

c) Prioritisation of Action Plans & Recommendations

to be taken to address issues and constraints identified in the DTIS, i.e., pr

deration is given to those recommendations:

1. That are specific and c2. That are not wide-ranging or too ambiguous to take action on, 3. That are in line with issues/constraints that are widely accepted areadily implemented,4. That are complementary to, or have added value, to government policies and

5. For which there is an implementing instituti6. With relatively higher leverage in terms of impact on trade facilintegration.

commended Priorities

conducting a general review of all the DTIS recommendations, the

orities under Trade Reform & Incentive Structure 1. Revamp present privatisation program to bring about a greater priv

participation in trade and industrial activities, addressing the problem

to capital of the private sector.

2. Build capacity of MoTI (Ministry of Trade and Industry) and otheragencies to operate the duty rebate scheme and bonded warehouse syefficiently and effectively in order that exporters have a

The TC employed the following criteria to prioritise DTIS recommendations and actions

iority

consi

lear,

nd can be

strategies,onal capacity, and

itation and

d) Re

After Technical

Committee prioritised the action plans and corresponding TA’s using the above criteria.

I. Priate sector

of access

relevantstem more

ccess to raw materials and inputs at world market prices.

II. Priorities under Market Access – “Beyond the Border Issues”

140

1. Enhance negotiating capacity of institutions to overcome tariff- andbarriers imposed in botexport bundle. 2.Take measures for the diversification of Ethiopia’s export bundle,relatively small and concentrated to mainly agricultural products andfaces negative growth in world markets, through bilateral and magreements such as

riorities under Foreign Direct Investment & Trade 1.Ensure that the legal and regulatory framework is conducive to attrastrengthen the institutional capacity of the Ethiopian Investment Comthat it can deliver efficient and effective services in accordance withinvestment code, while at the same time reviewing areas of improvemaking changes as necessary; and also create awareness amongst investhe legal and regulatory framework through familiarization workshbased information, brochures, investment f2. Consider fast accession to WTO to enhance credibility andperceptions of high3. Review the present land lease system to make it conducive to FDIit more affordable, accessible and by enhancing tenure security.

license as well as investments permits; andthereon in a sustained manner.

5. Provide better access to irrigation schemes, electricity, and water,telecommunication finfrastructure as well as by building new infrastructure as a basic requitrade and investment growth; and also promote Public-Private Partninfrastructure development.

. Priorities under Leg

non-tariffh developing and developed countries on Ethiopian

which iswhich also

ultilateralCOMESA and the implementation of EBA and and

negotiation of EPA.

III. Pct FDI andmission so

the latestment and tors aboutops, web-

ora, exhibitions, etc. overcome

risk of policy reversals and uncertainty. by making

4. Implement the new simplified procedures for trade registration, business continue improving service delivery

road, andacilities through more efficient utilisation of existing

rement forerships in

IV al and Regulatory Structure and Trade and Investment1. Develop a legal framework to create a stock exchange, or capital market, topool finance for investment and for buying and selling shares to address the current setback the privatization effort has faced due to the absence of a viable capital market, particularly the absence of an entry and exit mechanism through an established share market.

141

2. Implement the competition law by creating the necessary inrrangements to ensure that bot state and p vate enterpr ses are engaged in

trade practices and that there is a level playing field for all participaand make improvements to the law as appropriate.3. Enforce the right to pledge leased land for collateral purposes, partsecure loan from banks.4.Improve the export credit guarantee scheme through the separation orisks, namas by minimizing delays in effecting payment.

V. Priorities under Institutions and Institutional Support 1. Strengthen the institutional capacity of MoTI in order that it candischarge its apex responsibility of a) formulation of all trade relatethrough the involvement of the private sector, and b) coordinationissues.

2. Undertake legislative reforms to conform to WTO requirements awithin MoTI additional staff with adequate management as well asexpertise in trade policy and related issues.

3. Involve M Tengaged in trade matters.

4. Strengthen the chambers of commerce so that they provide efficient andeffective advocacy and trade support services. 5. Establish an internationally recognised conformity assessmsystem to enhance trade competitiveness in terms of quality and perf

6.Improve access to information on international trade policy andevelopment through investment in ICT and strengthen the incapacity of trade support institutions such as MoTI and chambers ofin the gathering and

stitutionala h ri i fair

nts in trade,

icularly to

f the twoely the non-performance of the exporter and that of the buyer as well

effectivelyd policies,

of trade

nd employtechnical

o I in the recruitment and supervision of diplomatic personnel

entormance.

d marketstitutionalcommerce

dissemination of trade related information to all stakeholders.

e) Implementation of DTIS Recommendations /Action PlansThe prime responsibility for coordinating the implementation of the DTIS recommendations lies with MoTI. However, there are capacity limitations at MoTI in the area of qualified human resources. There is an immediate need to build the capacity of MoTI in the areas of trade policy formulation, analysis, and monitoring and evaluation,

142

particularly, now that it has to oversee the trade reform measures to be undaccordance with the DTIS recommendations.

There is a need to coordinate donor support to the IF/DTIS process, in view onumber of areas of interventions and technical assistance recommended in theAgain, MoTI was entrusted with the task of soliciting as well as coordinasupport to the IF process.

4.2 Organisation of negotiating effort within the Ethiopian government

TO accession presents significant challenges to any developing couninistrative capacity for conducting negotiations and implementing commitssarily limited. The challenge becomes all the more e

ountries like Ethiopia. WTO members have to implement the “Single Undeplex set of ground rules for trade in goods, trade in services, and the pro

related intellectual property rights. It will indeed be difficult to fill thebetween the legal framework in Ethiopia and the requirements of th

ertaking”.

ertaken in

f the large DTIS.

ting donor

W try where adm ments are nece normous for least developedc rtaking”-acom tection oftrade significantgaps e “SingleUnd

Ther basis of adedi domestictrade tions to a succ d physicalreso t adequater organisedand he tablingof th

From portant in the a

132

e is no question that WTO negotiations require the services on a full timecated group of professional civil servants with expertise in international and

matters. The success of the Government in bringing accession negotiaessful and timely conclusion will depend importantly on the human anurces that it brings on the issue.133It is essential to a successful effort tha

esources are made available and equally important that they be deployed in ancoherent manner throughout the upcoming negotiation process; following te Memorandum on Foreign trade Regime of Ethiopia.

the start the Ethiopian government considers the following elements as imccession process.134

132 A Roadmap for Ethiopia’s WTO Accession (and Other Impending Trade Negotiations).,p.6133 Ibid.,p.7134 Interview with WTO Department Heads at MoTI and MoFA.

143

1 acceleratetify, coordinate, and manage

numerous procedural steps along the path to full membership.rnment of e regime.vestment

ails identification and revision of all laws, regulati entially beimpacte

3. Institutional Strengthening: WTO membership is predicated on a government’sabili t develop, review,and e particular.Enhanc of theMinistry sed by the WTO, i overed bythe personnel.

4. Relationship Building and Information Dissemination: Key to successfulWTO accession and membership is the existence of clear and continual communication with all of the stakeholders involved in the WTO. These partiesinclude relevant ministries, multilateral organizations, donors and foreign and domestic businesses. It is critical, therefore, that the government maintain a strong relationship and an open channel of communication with the WTO and with WTOmember countries. It is also equally as critical that all of the major constituencies within Ethiopia be educated on the benefits of WTO membership and that theyare committed to becoming a member of the WTO system.

To guide the accession process in an organised fashion, the Ethiopian government inconjunction with World Bank commissioned a report to prepare a Roadmap forEthiopia’s WTO Accession within the framework of the latter’s Private Sector Development Project. The resulting report presents:

- a series of options for the Government to consider in organizing itself for the conduct of the negotiations

- an approximate timetable for the WTO Accession negotiations - a preliminary list of capacity –building and other technical assistance

projects (training, analytical support ,technical support,

. Process Management: WTO accession is a process driven activity. Tothis process, it is critically important to iden

2. Policy Reform: At the most basic level, the challenge to the GoveEthiopia in its efforts to join the WTO is to upgrade the Ethiopian tradWTO membership requires compliance with dozens of trade and inrelated laws and regulations. This ent

ons, administrative practices and other measures that will potd by WTO accession.

ty o employ a wide variety of governmental structures toex cute trade policy in general and with respect to the WTO in

ing and strengthening the technical and institutional capacityof Trade and Industry is important so that all topics encompas

ncluding services, goods, customs, agriculture, and others are c

144

administrative capacitywill be required to prepare th

Organization Chart for Ministry of Trade Model

building ,organizational arrangements) thate Ethiopian Government for the

accession negotiations ahead.

A. Options Presented for the Location of the Trade Negotiations Unit within theGovernment.

1. Ministry of Trade Model

This model most closely approximates the existing structure in Ethiopia for the conduct of the WTO accession negotiations. Under this approach, the Ministry of Trade and Industry (MoTI) has carriage of the WTO accession file, including responsibility for the

Council of Ministers

Steering Committee on TradeNegotiations: MoTI, MoFA,MoI, MoFED, MOARD, etc

Minster of Trade and Industry Chief Negotiator

Head of WTO Department in MoTIDeputy Chief Negotiator

Deputy Chief Nego(Geneva)

tiator

Technical Commitees for trade ingoods,services,TRIPs

Foreign Advisors(Possibly based inWTO Dep., of MoTI

145

development of policy, conduct of the negotiations and reporting to the CMinisters on negotiating outcomes

ouncil of

cture that it is also a

e fact that e done to

to this structure however can be significant. As currently constituted, the Ministry of Trade and Industry(MoTI) does not have all the necessary expertise or the

t will haveghout thel, becauseade at anyee for the desired.

2. Trade Negotiations Office

Under this option, the Ethiopian government is advised to create a separate Trade Negotiations Office, which would be staffed by experts from across the EthiopianGovernment. Such an office could be housed in separate premises from existing ministries and would be financed by a special appropriation from the national budget, which would continue for the duration of the WTO accession negotiations. The office would be overseen by a Chief Negotiator who would be appointed by the Prime Minister with a specific mandate to lead the negotiations on WTO accession for the EthiopianGovernment. While the reporting lines for the Chief Negotiator could vary, it would be essential under this model for there to be a Council of Ministers-level Steering Committee .This Steering Committee would be responsible for providing policy guidance to the Chief Negotiator as he pursues his mandate and would also be the principal body for reporting on progress in the accession negotiations to the rest of Council of Ministers and the Prime Minster.

135.

The advantage to this in Ethiopia model lie chiefly in that it is a familiar strudoes not require any significant change to existing government structures andrelatively simple reporting framework for the government. Also, the implementation of the results of the negotiations by the Ministry of Trade will be facilitated by ththe Ministry itself negotiated the agreements and thus best knows what must bimplement them in day-to-day practice after accession.

The disadvantages

physical infrastructure necessary to carry out the complex WTO negotiations. Ito rely on other government ministries for technical assistance throunegotiations. Such assistance may not always be available at a desired leveother ministries might have different priorities from those of the Ministry of Trgiven time. While there is currently an inter-minsterial Steering Committnegotiations, such committees have not always functioned in other countries as

135 Roadmap,p.10

146

This model for the conduct of WTO accession negotiations avoids any of the problemsinherent in the Ministry of Trade Model and may better facilitate the development of indigenous Ethiopian trade policy expertise. A principal advantage of a centeralised trade office lies in the pooling of available talent and resources in one location where the skillsof officers involved can be concentrated on the WTO negotiation effort. This approach would permit the government to select the best qualified officials for the WTO accessionnegotiations from across the government, rather than having to rely on a few ministriesfor the bulk of its expertise.136

136 Road Map as above 13.

147

Organization Chart for Ethiopian Trade Negotiations Office Model

Cabinet

Steering Committee on Tradenegotiations:MoTI, MoFA, MoI, etc

Chief Negotiator

Trade Negotiation CoordinatingCommittee: high officials from allaffected ministries

Deputy ChiefNegotiator -Geneva

Deputy Chief Negotiator, Addis AbabaHead of Trade Negotiations Office

Technical Committee for goods, TRIPS,Services

Foreign Advisors

148

A centeralisd office on the other hand will ensure that the official‘s time is de

To the extent that foreign donor assistance might be av

than a broad spectrum of government ministries

votedexclusively to the WTO accession rather than to competing internal Ministry concerns.

ailable, it is likely that a donor might be more attracted to providing resources for a single, well-organised entity rather

n processTrade inTechnical

inistry ofinistry of

Standardmembers

ambers of invited in

d providesittee is comprised of

e Foreign& Industry and now under the

new structure the head of the WTO Department is the Chair of the Technical Committee and the Focal Point for the accession process. He is also a member of the National Steering Committee, providing a close link between the two committees.

The present structure of the Ministry of Trade and Industry closely resembles the first model suggested by the road map to WTO accession. In fact, the roadmap is based on the existing organizational form of the Ministry of Trade and Industry.

137.

B. Existing Negotiating Structure of the Ethiopian government

The Ministry of Trade and Industry is the focal point for Ethiopia’s WTO accession negotiation efforts. Two committees have been set up to oversee the accessiogenerally and to guide the preparation of the Memorandum of Foreignparticular. These are a) the National Steering Committee, and b) the NationalCommittee.

The National Steering Committee is comprised of higher officials of the MTrade & Industry, Ministry of Finance and Economic Development, MAgriculture, Ministry of Revenue, Ministry of Infrastructure, Ministry of Health, Ministry of Information, the National Bank of Ethiopia, Ethiopian Customs Authority, TourismCommission, Investment Commission, Environment Agency, Quality andAuthority, and the Ethiopian Parliament. Asked if business representatives areof the Committee, the Head of the WTO Department answered that the ChCommerce in Ethiopia are not members of the Committee. However, they areevery meeting of the National Steering Committee.

The Technical Committee oversees technical issues of the accession process antechnical advice to the National Steering Committee. The commtechnical experts from relevant government ministries, agencies and major sectors engaged in international trade and trade facilitation. Formerly the Head of thTrade Coordination Department of the Ministry of Trade

137.Road map to WTO accession, as above, P 13

149

5.3 Foreign Advisory Services

In light of the experiences of other WTO acceinvolved in the accession process in a wide variety of ways. These range from veryminimal involvement, targeted towards the resolution of narrow technical issuesrole coordinating and managing the accession process.

While minimal involvement of foreign advisors would be desirable ifadministrative capacity and experience were freely available within the governclear that there is a pronounced need for capacity building within thegovernment to permit officials to engage ina need for foreign advisory services to play a stronger, supporting role for at least the fphase of the negotiations for most issues, and likely until the end of the negotthe most technical issues such as agricultural subsidies and financial services,to Roadmap for Ethiopia’s Accession to the WTO.

The United States Government for example offered to include Ethiopia in a fuprogram known as the “Doha Project for WTO Accession and Participation”manage, and implement their WTO accession process. The offer includesvarious activities, ranging from the small-scale kind oassistance is provided by short term technical experts visiting Ethiopia, to lprograms .On the other hand a full scale WTO Project where the Foreign Advaccession process has key coordinating role is neither workable nor politically accepto the Ethiopian government. Doing so would give rise to risk of undermownership of the accession process by the Ethiopian government.

Accordingly the roadmap recommends a significant supporting role for foreigservices where the g

such expertise as the WTO accession negotiations

ssion countries, foreign advisors may be

, to a key

sufficientment, it is Ethiopian

the WTO negotiating process. This indicates irst

iations foraccording

lly-fundedto design,a host of

f programs, where intermittentarge scaleisor in the

tableining the

n advisoryovernment would utilize the services of foreign advisors for those

areas where adequate domestic expertise does not yet exist, with a view to developingprogress. Foreign advisors would

accompany all aspects of the work of the Technical Committees during the initial information –provision phase, while reducing their involvement during the subsequent negotiation phase as domestic skills and capacity increase and experience with WTO issues develop over time.

150

5.4 Involvement of the Private Sector in the Accession Negotiation

The role of the private sector for sustained, pro-poor economic developmenclearly set out in the Government's legal, institutional development policy, strprogrammes. Because of the fact that the private sector is at its infancy stageto get out of real and perceived handicaps, the Ethiopian government recogstrong institutions of dialogue and consultation will be productive. Moreovsector institutions giving support and services to the private sector are stilearning and development stage. This makes the establishment ofconsultation forums an essential component of the government’s PrivaDevelopment (PSD) program. The efforts already underway will be nurturedadvanced co-operation and partnership between the private sector and the Gove

Since Ethiopia’s accession is in its opening phase, the involvement of the non ssuch as the private sector and scholars is still minimal. The Private Sector istructured enough to influence the accession negotiations. The government in pwith the donor agencies is trying to have analytical and impact studies ustarting from this year that will inform the government’s negotiating poexpressed through the initial tariff offer and the initial offer for trade in servprivate sector needs to be effectively mobilized so that its views, which oftewith the official view, can be harmonized and integrated into the strateggovernment.Accordingly the suggested roadmap to Ethiopia’s accession to the WTO adgovernment to consult with relevant stakeholders, including parliamentofficials, the business community, and civil society, regarding its possible npositions. Such consultations may enable the

t has beenategy andstrugglingnizes thater, publicll in their

public-privatete Sectorfor more

rnment.138

tate actorss not well artnershipndertakensitions as ices. Then conflict

ies of the

vises the , regionalegotiating

government to obtain, through the reactionsof stakeholders, a fuller view of the possible impact of WTO accession on the Ethiopianeconomy and society; at the same time the government may want to manage the consultations carefully to avoid any disruptions to the accession process from untimelyand possibly ill-informed public debates. Consultations should continue as appropriate while bilateral and multilateral negotiations evolve.

138 . PRSP.,P.108

151

At present the National Public Private Partnership Forum139, together with resectoral fora, offers an important venue for structured and open policy dialoguthe two sectors in Ethiopia. During its first year of operation, the PPP Faddressed important issues relating to the creation of a more enabling environmprivate sector.

gional ande betweenorum has ent for the

ession willdevelopment will be

required for the institutions of the Forum both in the public and private sectors.

Accession Planning

s, at bothlicy in all

multilateralregional

ations.

toring and

ection andrent trade

pia. Priority measures are needed in strengthening of MoTI’s institutionaland senior

advisory services.

Strengthening of the institutional capacity of private sector and civil society organizations is needed, so that they can provide efficient and effective advocacy.141The problem of

140 The concern of the business community regarding WTO accno doubt will be raised in this Forum. However, significant capacity

4.5 Challenges in the

4.5.1 Trade policy Expertise

In Ethiopia, as in most LDCs, the public and private sectors lack the capacitiethe institutional and the human levels, to cope with the complexities of trade poits multiple phases and consequences, as well as with the intricacies of thetrading system and of the obligations stemming from the bilateral andagreements. WTO membership will considerably add to these burdensome oblig

Current weaknesses in trade policy analysis, formulation, negotiation, moniimplementation are hampering the country’s trade performance and implementation of trade reform. The absence of an effective institutional framework for data collanalysis of trade policy matters further undermines the development of a cohepolicy in Ethiocapacity, by providing the Ministry with additional staff, training of juniorofficers, and trade support infrastructure, such as computer facilities and external

139 In July 2002, the Ethiopian Prime Minister endorsed the request for stronger partnership andconstructive dialogue expressed both by representatives of the Government and by the Private Sector (PS),and underscored the need for institutionalising these consultations through a formal structure within MoTI.The Ethiopian National Public Private Partnership Forum was established towards the end of 2002 and heldquarterly meetings since its inception.

140 Government of Federal Democratic Republic of Ethiopia and United Nations DevelopmentProgramme,Support and Facilitation for Private Sector Development.,p.3141. National Study on Impact and Sustainability of the EPAs for Ethiopia,p.10

152

limited analytical, policy making and negotiating experience is also presengovernment institutions-not just MoTI. These problems already arise in thepreparing the Memorandum on Foreign Trade Regime while collectinginformation on the foreign trade regime and legal and institutional frameinfrastructure for collection of reliable and accurate statistics is not well devepreparation of the Memorandum took nearly two years now and there were disaover what point to include. An indep

4.5.2 Coordination with various Ministries and Relevant Agencies

One of the most challenging and time-consuming tasks during the accessioncoordinating at the intra-governmental level. WTO accession will require eand input from many ministries, including Trade and Industry, Finance andDevelopment, Foreign Affairs, Agriculture and Rural Development, Informatand Energy, Labour and Social Affairs, Infrastructure, and

Ethiopian Science and Technology Commission.

4.6 Existing Initiatives to assist the Ethiopian Government in its endeavour to acWTO

Trade-related technical assistance has been made available to Ethioporganisations such as WTO, UNCTAD, ITC, IMF, World Bank, UND

y bilateral donors such as the EU and USAI

he trade-related technical assistance programmEU – Capacity building for ACP StEU – Pesticides Initiative Programme

t in other phase ofdetailed

work. Theloped. The greements

endent Ethiopian academic has commented on it and his comments has been duly incorporated.

process isngagementEconomic

ion, Minescapacity Building, and other

government institutions such as the National Bank of Ethiopia, Standards Authority, and

cede to the

ia by internationalP and WIPO and

b D.

T es currently in progress include: ¶ ates in support of the EPA negotiations ¶ (PIP)¶ EU – Investment Facility and Pro Invest Programme¶ SIDA – Support of the Chambers of Commerce¶ UNCTAD – Trade Negotiations Training ¶ USAID – Legal support for WTO accession

153

¶¶ rld Bank – Preparation of a Road map for Ethiopia’s WTO Accession (August

2004)

ion Trade

project toral offers,roject will plications

akeholdersthiopia to terally. It

te sector (including Chambers ofa stronger

Ethiopia stayed in Addis Ababa from 23-31January 2004 to assist the Ethiopian Authorities in preparing their Memorandum on the

the WTO

physicalequipmentppropriateon processs, without

portant reference toolavailable in the area of WTO law in the form of the WTO website, is indispensable bothfor communication with other officials and research on the many different topic in whichthey have to be expert. As for library and reference materials, there is currently nocomprehensive collection of WTO and related international trade materials.

World Bank – Private Sector Support Wo

The EU and COMESA are also considering a comprehensive Euro 5 MillCapacity Building Programme, which include activities targeted at supporting a Road Map for accession to the WTO.In February 2005, the government in partnership with the EU will implement aundertake impact studies, to prepare replies to working parties queries, sectonegotiation offers, and improve negotiating capacities. It is expected that this pcontribute to a deeper understanding of Ethiopia’s trade and WTO accession imnot only within the WTO Technical Committee in particular, but across stmore broadly. It will create an enhanced ability within the Government of Emaster the accession process and to negotiate its terms bilaterally and multilawill also hopefully build awareness in the privaCommerce, Industry Associations and larges businesses) so that they can playbusiness advocacy and policy forming role.

UNCTAD’s technical advisory mission to

Foreign Trade Regime for submission to the WTO and also to sensitize onagreements and on the process of WTO accession.

However, donor measures can still be used in the provision of basicinfrastructure for Government ministries in terms of computer and other officethat will permit officials to perform their functions as well as to undertake atraining. Most government bodies in Ethiopia that are involved in the accessiare seriously deficient in basic computer equipment. In addition ,internet acceswhich government officials are deprived of the single most im

154

5. Possible Implication of WTO membership for Ethiopian Economy

As part of the accession process, Ethiopia will conduct negotiations on conmarket access for imported goods and services, as well as on possible transitiand special and differential treatment in implementing certain provisions ofSingle Undertaking. In practice, many accession countries have been asked,agreed to make concessions and commitments that go beyond those of coincumbent WTO members. An OECD paper observes that “although eachprocess is specific, reflecting the particular economic and trade structurecountry, the emerging common pattern includes the following set of requiralmost total binding of tariffs at considering low levels; ii) national treatment,in the fiscal area, for good and services; iii) fair and transparent customs valuunbiased import licensing ;v) elimination of distorting export mechancommitment to protection of intellectual property rights; vii) negotiated marketsome specific sectors; vii) transparent testing procedures for standards and certification,

investment barriers, x) to a lesser extent possible the participation inagreements”.

5.1 General

ditions of on periodsthe WTOand havemparableaccession

s of eachements: i) including

ations; iv)isms, vi) access in

viii)transparent testing procedures for standards and certification; ix) limitation of plurilateral

erstandingliberalize

While the topics need full-scale analytical studies, we can at least outline some of the key issues that are

p in the negotiations based on preliminary understanding of Ethiopia’s current trade-related policies and previous accession experience of other countries.

While Ethiopia has significantly reduced its import tariff in recent years, the current level and dispersion of tariff rates are still substantial. However, during coming years, the most far-reaching change in import tariffs may result not from WTO accession, but from

142

There fore as Ethiopia embarks on the negotiations, it will need a through undof the economic and social implications of a wide variety of measures toimports of goods or services that Working Party may ask it to undertake.

likely to come u

5.2 Trade in Goods

142 OECD,Designing New Trade Policies in the Transition Economies,Paris,1997.Similar claims inUNCTAD,WTO Accession and Development Policies(2000).

155

Ethiopia’s proposed participation in the COMESA free trade area and theEconomic Partnership Agreement with the European Union. Under both schemfor most categories of imports (“substantially all trade” according to ArticleGATT(1994)) from the members of the respective agreement (COMESA counEU) would eventually be set to zero; tariffs on imports from other sources wouunchanged. While tariff reductions could be phased in over a lengthy transitithe loss of protectionprotected Ethiopian firms.

On issue of agriculture, as a least developed country, Ethiopia will be expectbut not to reduce, its agricultural support.

proposedes, tariffsXXIV of

tries or theld remain

on period,could require significant adjustments on the part of hitherto

ed to bind,–Related

the futuremight be

ether anyningful policies for food security, which might be instituted in the impossible to implement through unrestricted (green box) forms of

144

l services,erved for

servicesthiopia to

ign directgests thatconclude

e areas ofunication

services. 146On the other hand, the service sector is the most sensitive sector for the government of Ethiopia and it will likely be the most challenging part and the sticking point of the negotiation. Detailed studies will be required to assess the economic and social impact of such requested liberalization in each key sector, and to inform the

143The draft Memorandum on TradePolicies states that Ethiopia may wish to introduce price support measures infor food security purposes ,without specifying the type of support thatconsidered. More analysis is needed in this context to determine wheconomically meafuture, would besupport for agriculture.

5.3 Trade in Services

Many Ethiopian service sectors –including key producer services like financiatransport, and telecommunications-are either government monopolies or resEthiopian nationals.145Annex 1 gives illustrative list in this regard. Innegotiations, Working Party members are likely to request commitments from Eliberalize imports of many such services, especially by permitting foreinvestment by service suppliers. The experience of recent accessions sugsignificant concessions by Ethiopia on services imports may be necessary toaccession negotiations. Nepal,Cambodia,Vanuatu made substantial offers in thfinancial, professional, distribution, education and environmental and telecomm

143 Article 15 of the Agreement on Agriculture144 Road Map to Ethiopia’s accession to the WTO,p.145 Draft Memorandum on Trade –Related Policies, Section VI.3146 UNCTAD ,The Least Developed Countries Report,2004,p.59

156

government’s negotiating position regarding the timing and sequencing of any agreed

Ethiopia does not have a full and comprehensive legislation granting protintellectual property rights (IPRs). Various existing laws

reforms.

5.4 Intellectual Property Protection

ection foraspects of

which are recognized by the Federal Constitution adopted in 1994. Accordingly, Ethiopia

esigns was997. Thepril 2004,lthough a

ted, the Directive issued by the Ministry of Trade andmarks and

T roperty inthe c tual Property Office. The Office was established in A i¶ oitation of

¶ in patentand encourage its utilization;

¶ to study, analyse and recommend policies and legislation on intellectual property

mong thegeneral public.

At present in addition to the non-consolidated legislation, the implementation of the lawsis weak because of a lack of resources. However, recent developments towards

deal with someintellectual property, but they are not fully updated. However, since the middle of the 1990s the government has made efforts to improve protection and enforcement of IPRs,

joined the World Intellectual Property Organization (WIPO) in 1998147.

The Proclamation Concerning Inventions, Minor Inventions and Industrial Denacted in May 1995 and the implementing regulations were issued in 1copyright and neighbouring rights law, which was passed very recently, on Aput in place the legal basis for the protection of literary and artistic works. Atrademark law is not yet adopIndustry in 1986 is used as a basis for the deposit of trademarks and servicethe issuance of certificates of deposit.

he organizational structure responsible for the administration of intellectual pountry is the Ethiopian Intellec

pr l 2003 and pursues the following objectives:to facilitate the provision of adequate legal protection for and explintellectual property in the country; to collect, organize and disseminate technological information containeddocuments

to the government; and ¶ to promote knowledge and understanding of intellectual property a

147 The country is also a party to the Nairobi Treaty on the Protection of the Olympic symbol which wasadopted in 1981.

157

strengthening the national IPR system could act in the opposite way and haveinfluence on the promotion of local tech

Most WTO rules for intellectual property rights protection are part ofUndertaking and therefore not subject to negotiation. Given the huge challengeup intellectual property rights protection almost from scratch, it is conceiEthiopia may find some sympathy on the part of Working Party members if it werequest longer than usual transition periodsprotection.

Ethiopia is also planning to manufacture generic medicines for the treHIV/AIDS in conjunction with South Africa. The Doha Declaration on tAgreement and Public Health states that least developed countries (such asneed not apply intellectual property protection for pharmaceuticals before 2this provision would appear to take care of Ethithat Cambodia was pressured during its accession negotiations

5.5 Implementation of Customs Valuation, SPS, and TRIPS Agreement

Although more detailed analysis is needed to establish the gaps betweenlegislation and key components of the WTO Single Undertaking, as well asrequired for the effective implementation of any revised legislation, it is clear amajor efforts, and donor assistance, will be required to i

personnel at theofficers at headquarters in the application of new regulations, etc.

5.6 Technical Rules

a positivenological change and the transfer and

dissemination of foreign technology in the country.148

the Singleof setting

vable thatre to

for phasing in Intellectual Property Right

atment of he TRIPSEthiopia)

016.Whileopia’s production plans, it is significant

into applying intellectualproperty protection on pharmaceuticals as early as 2007.

existingmeasures

lready thatmplement the Customs

Valuation, SPS, and TRIPS Agreements. This may include training for enforcementborders, establishment of effective procedures for appeals, training for

Ethiopia is a member or a signatory party of various international organization orconventions, as International Organization of Legal Metrology (IOLM), International Organization for Standardization (ISO) or Codex Alimentarius. Founding member of the African Regional Organization for Standardization (ARSO), the Quality and Standards

148 National Study on Impact and Sustainability of EPA for Ehiopia,as above,p.34

158

Authority of Ethiopia (QSAE) was established in 1970 and is responsible for eimport regulations. QSAE has adopted around 1200 standards including some mones

xports andandatory

rally consistent with international ones and do not

y a clearnorms and my means t, and thements for

On international markets, the challenges are not only to dards, but

norms and important

Such aformity to apacity toity amongystem are

wever, theycannot be ignored, despite Ethiopia’s budgetary difficulties. To this end, the country would need to identify and prioritise its requirements and, in order to reduce the costs borne by the Ethiopian budget, to secure financial and technical assistance from donors.

149. Ethiopian standards are geneact as technical barriers against imports150.In the light of the trend in Ethiopia's economic policy, characterized bwillingness to accelerate the country’s integration into the world economy,technical rules will become increasingly important. Indeed, a more open econoboth a stronger competition among competitors within the Ethiopia markenecessity for Ethiopian producers to be able to meet the international requireproduct quality and processes.comply with regulations based on health, safety, environmental or social stanalso to acquire consumer confidence. Currently, one of the major weaknesses in Ethiopia’s capacities in relation totechnical rules is linked to the conformity assessment aspect. For example, andeficit comes from the lack of internationally recognised testing laboratories.situation obviously hampers any formal recognition of Ethiopian products coninternational market requirements151, and reduces the national producers’ ccompete in the world market. The promotion of awareness of product qualnational producers as well as improvements in the conformity assessment shighly specialized, knowledge-intensive activities and, thus, very costly. Ho

149 http://www.qsae.org/web_en/Standards_info/Standards_gen_info.htm#12. The National Study onImpact and Sustainability of the EPAs for Ethiopia also provides a useful discussion in this regard.150 U.S. Foreign Commercial Service & U.S. Department of State (2004), as above.151 Quality and Standards Authority of Ethiopia (2002), Introducing Quality Management System andSupporting the Establishment of Accredited Certifications Centers and the Improvement of MandatoryCertification System, Project Proposal, Addis Ababa.

159

6.Conclusion

The fundamental development objective of the Ethiopian government is to bmarket economic system which enables the economy develop rapidly and poobe the main beneficiary from economic growth. Accession to the WTO is conan important element in the pursuit of this national development objective.WTO accession process is just beginning. The government will soon be subMemorandum of Foreign Trade Regime. To guide the accession process in anfashion, the government together with the World Bank prepared a “WTORoadmap” that presented a

other technical assistance projects.

Nonetheless, there are still enormous challenges in the accession planning. Inthe public and private sectors lack the capacities at both the institutional alevels to cope with the complexities of trade policy analysis, formulimplementation. WTO membership will considerably add to these buobligations. World Bank, the US, the EU, and various UN agencies are

uild a freer people to sidered asEthiopia’smitting its organizedAccession

n organizational form to conduct the negotiations, an approximate timetable for WTO Accession negotiations, a list of capacity-building and

Ethiopia,nd humanation andrdensome

offering specifickinds of support to Ethiopia for WTO accession process. However, there is still a substantial need for technical assistance in dealing with the process of WTO accession and the legal and regulatory harmonization challenges posed by WTO membership.

160

Acronyms

ACP African, Caribbean and PacificADLI Agricultural Development-Led IndustriaCET Common External Tariff COMES Common MarketCSP Country StrategyCSR Civil Service ReformCU Customs UnionDTIS Diagnostic TradeEBA Everything but Arms EC European CommunityEPA Economic Partnership Agreement ESA Eastern and SouthernET Ethiopian Tourism Corporation / EU European UnionFDI Foreign Direct Investment FTA Free Trade AreaFDRE Federal DemocratiGATS General Agreement on Trade in Services GATT General Agreement on Tariffs and Trade GDP Gross Domestic ProduHS Harmonized SystemIF Integrated Framework for Trade-relatIMF International MonetIPR Intellectual Property RightISO International OrgITC International Trade CentreLDC Least Developed CountryMoFA Ministry of Foreign AffaMFN Most Favoured Nation MOARD Ministry of Agriculture and Rural DevelopmentMOFE Ministry of Finance and Economic DMOTI Ministry of Trade and IndustryNBE National Bank of Ethi

lisation

A for Eastern and Southern Africa Paper

Integration Study

AfricaC Ethiopian Telecommunication Corporation

c Republic of Ethiopia

ct

ed Technical Assistanceary Fund

sanization for Standardization

irs

D evelopment

opiaNDTPFNational Development and Trade Policy ForumOECD Organization for Economic Co-operation and DevelopmentQSAE Quality and Standards Authority of EthiopiaSDPRP Sustainable Development and Poverty Reduction ProgramSPS Sanitary and Phyto-Sanitary

161

TBT Technical Barriers to Trade TRIM Trade Related Investment MeasuresTRIPS Trade Related Intellectual Property RightsUNCT United Nations Conference on TraUNDP United Nations Development ProVAT Value Added Tax WIPO World Intellectual Pro

s

AD de and Developmentgramme

perty OrganizationWTO World Trade Organization

162

A Ro(2004).

COMESA (2003), Preparation for the COMESA Customs Union.

Integration Study

the period 2002 – 2007

Annual Progress Report

Hoekman, B. M., and Kostecki M.M. (2001), The Political Economy of tTrading System: The WTO and Beyond (Oxford: Oxford University Press)

Government of Federal Democratic Republic of Ethio

Development (2002)

MOTI, Industrial Development Strategy (unofficial English translation)

National Bank of Ethiopia (2003), 2002/2003 Annual Report

References:

Afro-Consult & Trading (2002), The Study of the Impact of COMESA/FTA.

admap for Ethiopia’s WTO Accession (and other Impending Trade Negotiation.

DTIS (2003), Ethiopia: Trade and Transformation Challenges - Diagnostic Trade and

Ethiopia - European Community, Country Strategy Paper and Indicative Programme for

The Federal Democratic Republic of Ethiopia: Poverty Reduction Strategy Paper,

he World

pia and United NationsDevelopment Programme, Study on Support and Facilitation for Private Sector

National Study on Impact and Sustainability of EPA for Ethiopia (2004)

OECD (2004), African Economic Outlook, Ethiopia 2004, OECD, Paris OECD(1997),Designing New Trade Policies in the Transition Economies,Paris

163

Subramanian A. et al. ( 2002), Trade and Trade Policies in Eastern and Southern AfricaIMF, Washington

,

TAD (2003), Good Governance in Investment Promotion: Ethiopia. Advisory

tions

.S. Department of State (2004), Ethiopia Country Commercial Guide FY 2004, Washington D.C.

l Briefs

World Bank (2004), Doing Business in 2004

D.C.UNCTAD (2000), Accession and Development PoliciesUNCReport

UNCTAD (2004), The Least Developed Countries Report 2004

UNCTAD (2004a), An Investment Guide to Ethiopia: Opportunities and Condi

U.S. Foreign Commercial Service and U

World Bank,(2004),Country Analytica

164

165

tic investors:

tional Grid System, and of more than 20 passengers

exclusively reserved for domestic investors

aised or fattened by the investor; ers, material

its by-products as well as wholesale trade by

smithing, workshops and tailoring services

vehicles;i-cab transport services;

motels, pensions, tea rooms, coffee shops, bars, night pecialized restaurants);

ber-making;

icket selling services. 3. Areas exclusively reserved for Ethiopian nationals (without prejudice to No. 2 above): • Banking, insurance, micro-credit and saving services; • Broadcasting services; • Domestic air transport services using aircraft with a seating capacity of up to 20 passengers; and • Forwarding and shipping agency services

Annex 1-Restrictions in Ethiopian Economy

The following areas are reserved for domes1. Areas exclusively reserved for the Government: • Postal services except courier services; • Transmission and supply of electrical energy through the Integrated na• Domestic air transport using aircraft with a capacity

Areas

A. Trade • Export of raw coffee, chat, oil seeds, pulses, hides and skins bought from the market, and live sheep, goats and cattle not r• Import (excluding LPG, bitumen and, upon approval from the Council of Ministinputs for export products); • Retail and brokerage; and • Wholesale (excluding supply of petroleum andforeign investors of their locally produced products). B. Other • Bakery products and pastries for the domestic market; • Barber shops, beauty saloons, and provision of(Except by garment factories); • Building maintenance and repair and maintenance of • Car-hire and tax• Commercial road transport and inland water transport; • Construction companies excluding those designated Grade 1; • Customs clearance; • Grinding mills; • Hotels (excluding star-designated hotels),clubs and restaurants (excluding international and s• Museums, theatres and cinema hall operations; • Printing industries; • Saw milling and tim• Tanning of hides and skins up to crust level; and • Travel agency, trade auxiliary and t

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l

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othe

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.¶

anal

ytic

al a

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pact

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incl

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nst

166

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endm

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as f

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(on

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onse

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in

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167

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egis

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04-2

005

Preparing for a WTO accession: country study on Jordan

, BLitt (Oxon)

EBA wll

MEBA@nets.com.jo

Jordan’s acceded to the World Trade Organization in 2000 after more than five years of

ay

provide valuable lessons to developing economies entering into or involved in the accession

ntry.

t reform that

included liberalizing the economy and starting its integration into the global market. Close to half

TO; and after

obtaining major diplomatic support form the United States and European countries as a result of

O Accession

year.

Priorities that the country saw as important for its WTO accession were to ease the transition for

protected sectors so that unemployment and poverty rates (both in double digits and rising since

the mid-80s) would not be exacerbated in the short run and could be alleviated in the medium-

term. These priorities had been identified by Jordan’s government in consultation with the

International Monetary Fund (IMF) and the World Bank (WB) in the early 90s, and published in

By Riad al Khouri

Director, M

Executive summary

preparation and negotiation that, though perhaps uneventful compared to other countries, m

process, and to agencies that finance or provide technical assistance (TA) for WTO e

Following a severe economic crisis in the late 1980s, Jordan began importan

a decade into such reform, in April 1994 Jordan requested accession to the W

the signature of a peace treaty with Israel in October of the same year, a WT

Working Party for Jordan was decided in 1995 and began its meetings the following

172

Jordan’s indicative Five Year Plan for 1992-6. Steps taken by the government to organize and

prepare for its participation in WTO accession negotiations started with the designation of the

Co-operation

shifted to the Ministry of Industry

and Trade (MoIT), where a small WTO secretariat was formed in 1995.

ess chambers

as well as a few individual companies, a handful of civil society organization (CSOs), and some

ent take

the MoIT as

al challenges

olving issues

is hurdle was

surmounted through a determined reform effort by Jordan in patents, copyright, and other areas

cess of trade

ity with some

y both Jordan

amiliarity on

both sides of issues that concern small acceding states. At the same time, that period was

characterized by important flows of TA to Jordan, especially from such bilateral entities as the

United States Agency for International Development (USAID) but also international

organizations including the IMF and the WB among others, as well as multilateral regional

bodies. The type, extent, and usefulness of such substantial TA received from bilateral donors

office of the secretary general of the Ministry of Planning and International

(MoPIC) as a focal point of the process. However, this soon

After that, gradual but accelerating involvement of non-state actors - including busin

local and international consultants - in the WTO accession process helped the governm

the issue more seriously and commit resources to a strengthened technical team in

well as devote more time at cabinet level to accession issues. One of the princip

faced when negotiating with existing WTO members included problems in res

concerning intellectual property rights (IPR) with the United States. However, th

of IPR. Jordan’s dealing with the WTO secretariat proved relatively difficult at the beginning of

the accession process, partly because of the country’s lack of expertise in the pro

negotiation, but also due to – a few Jordanians claim - the organization’s unfamiliar

of the issues involved. However, the late 90s witnessed a mutual learning process b

and the WTO, so that, by the time of the country’s accession, there was enhanced f

173

and international organizations was a major element in supporting Jordan’s accession process and

making the country better able to deal with the issues at hand. This TA available in the late 90s

to prepare for

mmitments made during the WTO accession negotiations, both before and

after the country acceded.

important strategic role to play, illustrates the interaction between economic diplomacy and

ip’s

ussein, meant

ntry hoped to

s not directly

wever, under

the de facto rule of Crown Prince Hassan during the King’s illness in the second half of 1998,

TO

ticular benefit

being of special importance for the country

was the possibility of increasing foreign direct investment (FDI). However, that FDI is still a

obably weigh

even more heavily on Jordan had it remained outside the WTO.

Five years after accession, the benefits of WTO membership for Jordan are only now starting to

be understood clearly at a popular level. Greater participation of non-state actors from the

beginning would have accelerated this process, but the state’s paternalism is not entirely to

and into the following decade also served Jordan well in helping the government

implementation of co

The case of Jordan, as a small lower middle-income developing economy that nevertheless has an

political factors, as reflected in the country’s WTO accession process. The Jordanian leadersh

pre-occupation in the 90s with regional politics, especially under the late King H

that the decision to join the WTO and the economic rationale of what the cou

achieve by becoming a member were overshadowed by strategic consideration

related to bread and butter issues facing the country’s businesses and consumers. Ho

and with the ascension in early 1999 of King Abdullah II, Jordan’s decision to join the W

began to be seen as an important part of the country’s development strategy. A par

of joining the WTO that then came to be identified as

trickle and continues to be hampered by regional instability is a factor that would pr

174

blame, as the anti-WTO arguments that CSOs sometimes advanced were in some cases spurious

and propagandistic.

On the basis of Jordan's experience, the following recommendations can be made:

onal priorities

dia

Developing countries entering or in the accession process should push to form nati

for the WTO accession effort through open public debate, in parliament and the me . That both

groups in Jordan were and often remain timid and unprofessional could have been remedied by

strong grass roots efforts by the national leadership. That was not wholeheartedly undertaken by

Jordan before 1998, but must be attempted by acceding states. At the same time, it is crucial to

familiarize parliamentarians and journalists with WTO issues.

These countries must develop necessary government skills to participate in and complete

accession negotiations partly by seeking the advice of similar economies and neighboring states

that have gone through the WTO entry process. The feeling among cynics in Amma

90s was that Jordan started it negotiations unprepared: otherwise, why was the tec

WTO entry left for thirty months to a staff of two people? Now, after serious e

strengthening on the technical side in the late 90s,

n in the mid-

hnical side of

xpansion and

Jordan has managed to export its WTO

accession expertise to other Arab states, to the mutual benefit of provider and recipient. (An issue

of relevance to Arab countries acceding would be adopting Arabic as an official WTO language,

but this is an expensive step that could perhaps be pushed later.)

Agencies that finance or provide TA on WTO accession must involve expertise of local CSOs,

academics, and consultants, irrespective of whether governments can or want to do so. This,

175

which did not happen sufficiently in Jordan’s accession, is not only usually cost-effective, but

also helps support for the process percolate into the national system and assists in capacity-

building that serves the country well after accession.

Beware of large overlapping TA programs, which are wasteful and can also cro

expertise. It is difficult to say no to TA, but in all cases it should be looked at critic

foreign aid was provided to Jordan after the Middle East peace process started to unravel in late

have been USAID consultants negotiating with American counterparts on behalf of Jordanians.

The good news was that by and large the

and recipients should not be over-eager to receive it.

wd out local

ally. Massive

1995. The reductio ad absurdum of the avalanche of foreign assistance that then hit Jordan would

advice provided by outsiders to Jordan during the

negotiation process was sound, but aid, like most other things, can involve diminishing returns,

Finally, do not overestimate the WTO secretariat. The experience of Jordan appears to suggest

uch of a learning curve as counterparts in

applicant countries. This is not to diminish the role of TA from the WTO itself, which in Jordan’s

case was extremely important. However, applicant countries should remember that each

that staff members of the organization are on as m

accession is unique and has a lot to teach the WTO itself.

176

Contents

und

negotiations

actors

Technical assistance

commitments

mmendations

Bibliography

Notes

Backgro

Priorities

Preparing for

Non-state

Challenges

Implementation of

Conclusion

Reco

177

Background

d remittances

l in workers’

ch as Jordan,

ited scale of

economic reform thus began in the country at the end of the 80s, parallel to other changes that

152

t reform that

Close to half

fter obtaining

major diplomatic support form the United States and European countries as a result of the

orking

theless has an

tion between

economic diplomacy and political factors, as reflected in the country’s WTO accession process.

The Jordanian leadership’s pre-occupation in the 90s with regional politics, especially under the

late King Hussein, meant that the decision to join the WTO and the economic rationale of what

Since inception as a state in the 1920s, Jordan has relied on external assistance an

from abroad. However, after the drop in aid that began in the 80s and the fal

transfers later in the decade, there was a realization that, for a small country su

integration into the world market could offer the best prospect to overcome the lim

the domestic economy and help increase productivity through specialization. More or less serious

included the re-emergence of civil society activities in Jordan.

Following a severe economic crisis in the late 1980s, Jordan began importan

included liberalizing the economy and starting its integration into the global market.

a decade into such reform, in April 1994 Jordan requested accession to the WTO; a

signature of a peace treaty with Israel in October of the same year, a WTO Accession W

Party for Jordan was decided in 1995 and began its meetings the following year.

The case of Jordan, as a small lower middle-income developing economy that never

important strategic role to play in the Middle East region, illustrates the interac

152 al Khouri R “Civil Society and Its Role in the Process of Lawmaking in Jordan,” November 2004, the Jordan Institute of Public Policy and Dialog, Amman

178

the country hoped to achieve by becoming a member were overshadowed by strategic

considerations not directly related to bread and butter issues facing the country’s businesses and

ng’s illness in

h II, Jordan’s

development

d as being of

still a trickle and continues to be hampered by regional instability is a factor that would probably

plication of a

s economic adjustment has been

undertaken in collaboration with the IMF and the WB, and has led to trade liberalization.

riented trade

strategy to rectify the current imbalance in its foreign exchange position.”153 IMF and WB

support was conditional on the government undertaking specific reforms in the trade regime and

tax system, including gradual reduction of the maximum customs tariff, abolition of import

consumers. However, under the de facto rule of Crown Prince Hassan during the Ki

the second half of 1998, and with the ascension in early 1999 of King Abdulla

decision to join the WTO began to be seen as an important part of the country’s

strategy. A particular benefit of joining the WTO that then came to be identifie

special importance for the country was the possibility of increasing FDI. However, that FDI is

weigh even more heavily on Jordan had it remained outside the WTO.

Jordan in the late 1980s went through a severe economic crisis, followed by the ap

comprehensive structural adjustment program (SAP) as well as other reform, which have

continued in one form or another for over fifteen years. Thi

Structural reform has accelerated since King Abdullah came to the throne.

In the late 80s Jordan was seen as needing to “move towards a more outward o

153 United States Agency for International Development (USAID) Jordan “Statement of Work, Export Trade and Productive Investment Project” unpublished, Amman, November,

1989

179

licensing, and removal of non-tariff barriers facing imports in order to create a more competitive

trade sector.

international

xternal sector

agency began

s of

exporters with Customs were so difficult to handle that directives emanating from sources other

t in the

rk conducive

of Jordanian

ieving broad

based, sustainable economic growth, and place a greater reliance on complementary domestic

arkets that support more open trade policies.”156 Several other aid and lending

institutions also became active in this regard in Jordan in the late 80s and early 90s, chiefly the

German Agency for Technical Assistance (GTZ), Germany’s official aid implementation

organization.

Donor country aid agencies often play a similar role in Jordan to that of

organizations. The constellation of stakeholders that proposed reform in the e

included foreign bilateral aid and lending agencies, spearheaded by USAID. That

in 1989 to tackle the problems of Customs.154 It was remarked at the time “the problem

than the Prime Ministry and unsupported by widespread lobbying and pressure were felt to be

inadequate by themselves in confronting the bureaucracy and others with a vested interes

present system.”155 USAID also focused on the achievement of a policy framewo

to private sector growth, and improving the production and marketing capabilities

enterprises to “use international trade as a key instrument in the process of ach

competitive m

154 al Khouri, R “The Regulatory and Policy Framework for Exports in Jordan: a Survey and Proposal for Change” USAID Private Services Development project, unpublished,

Amman 1990

155 For details of the process of Customs reform in Jordan see al Khouri “Governance Case Study of Jordanian Customs,” WB 2004

156 USAID op cit

180

Priorities

e to ease the

ble digits and

eviated in the

sultation with

B in the early 90s, and published in Jordan’s indicative Five Year

Plan for the first half of the 1990s.

an for 1997-

ith in WTO

ubject to the

e Engineers’

Associations join the negotiation committees for Jordan accession to the WTO was specifically

y’s accession.

try’s postal services were also seen as needing special attention within the WTO

negotiations.158 Finally, the transport sector was identified as an area where Jordan’s accession to

the WTO required reconsideration of legislation governing this sector as well as developing and

renewing it.

Priorities that the country saw as most important for its WTO accession wer

transition for protected sectors so that unemployment and poverty rates (both in dou

rising since the mid-80s) would not be exacerbated in the short run and could be all

medium-term. These priorities had been identified by Jordan’s government in con

the IMF and the World Bank W

Later and more specifically, the country’s Social and Economic Development Pl

2003 identified a few sectors as priority areas that would have to be dealt w

negotiations. One of these was construction, which was seen as particularly s

challenge of Jordan’s accession to the WTO. Having the Contractors’ and th

mooted as a way to deal with this issue. Agriculture, declining in Jordan since the early 1970s,

was another sector singled out for special consideration in the context of the countr

The coun

157

157 Hashemite Kingdom of Jordan Ministry of Planning The Social and Economic Development Plan of 1997-2003

158 As mentioned in the author’s interview with Amin Kawar, Director of the Jordanian Post, 2005

181

In fact, many other sectors were given special attention in the negotiations, while in some cases

the above topics were not especially touched upon. The suspicion is therefore that the sectoral

. On the other

loyment and poverty were constantly

kept uppermost in the minds of policymakers and negotiators alike.

Preparing for negotiations

TO accession

e MoPIC as a

try and Trade

the minister

the drafting

process for amendments or new laws were officials of the ministries concerned, former senior

gether with

d-90s lacked

WTO. Those

following the debate on international trade liberalization and inter alia the WTO can be classified

into three major groups. The first comprises government officials who are responsible for

following up of the process of joining the WTO. This group is technocratic and normally does

not pronounce on pros and cons of joining. The second group comprises academics that are

concerned about the international trade development. Their contribution in the public debate is

priorities were not particularly pressing, and that plans for the negotiations changed

hand, the strategic priorities of needing to combat unemp

Steps taken by the government to organize and prepare for its participation in W

negotiations started with the designation of the office of the secretary general of th

focal point of the process. However, this was soon shifted to the Ministry of Indus

(MoIT), where a small WTO secretariat was formed in 1995. This was entrusted by

to prepare a first draft for internal discussion within the ministry. Others involved in

officials with the relevant competence in the subject of trade negotiations, to

independent experts.

However, such expertise was limited. Jordan, with a few exceptions, in the mi

experts in both the private and public sectors concerning technical issues of the

182

limited and their research findings are not linked to the policy makers. They focus more on the

theoretical aspects of the international trade liberalization. Their findings concerning Jordan’s

e those who

d those who

uch stronger

n Jordan. The

liver upon request and may seek assistant from

abroad in their undertaking.

be associated

utions, which

e some short-

acturing and

services. The government, they argue, must help alleviating the expected negative implications.

In the long run efficiency and productivity will be improved and so public welfare. If Jordan

ze and exploit

as a result of

joining the WTO. Furthermore confidence about reforms would be boosted when it is enhanced

by international commitments. The main worry in Jordan is that the country is small and

exposing manufacturing sector to foreign competition could hurt Jordanian industry and create

de-industrialization trend. This could result in higher unemployment and probably social unrest.

accession (before and after) are far from conclusive. Within this group there ar

oppose ideologically the idea of free trade and the neoclassical paradigm an

propagate the idea of free trade. However, proponents of free trade can make a m

case as a result of the failure of protectionist policies to achieve their desired goals i

third group comprises private consultants who de

Proponents based their arguments on the rationale that joining the WTO should

with local transparency and good governance and strengthening the existing instit

they did not then and do not so far witness in Jordan on a wide scale. There might b

term negative implications as a result of joining the WTO concerning manuf

develops its competitive advantage then it can overcome the limitation of small si

economies of scale.

Jordan would gain in terms of credibility before foreign investors and private sector

183

The personnel involved in drafting were aware of the concerns of the groups likely to be affected

by the proposed changes in the laws. In particular, as mentioned above, the need to fight

orking on the

re in the mid-1990s

saw a co-incidental jump in joblessness and the percentage of poor people in the country.

sequences

for the various stakeholders commissioned to domestic and international consultants produced

159

the one hand

s would come

responsibility

alone for entering into important agreements. However, a broad range of stakeholders were not

al manner. On the other

hand, it should be kept in mind that these efforts were undertaken parallel to work started in the

ing on in the

.

Alongside the secretariat set up in the MoIT to handle WTO issues, an advisory committee that

included non-government and state officials was formed from representatives of the MoIT, the

unemployment and poverty were constantly kept uppermost in the minds of those w

topic of WTO accession, particularly since the start of the accession procedu

Studies to assess the impact of the changes occasioned by WTO admission and the con

several recommendations.

The government then organized informal meetings between government officials on

and various actual or potential stakeholders on the other. Awareness that big change

as a result of WTO accession mean that the government was unwilling to bear the

necessarily consulted at the early stages of the accession process in a form

late 80s aimed at liberalizing the trade sector. There were thus several activities go

country during the mid-90s that involved promoting a more open trade environment

159 Among the major studies produced during this period was that for USAID by Coopers and Lybrand on “The

Economic Impact of GATT/WTO membership on Jordan: an Assessment” July 1995.

184

Ministry of Finance (MoF)/Customs department, Central Bank of Jordan (CBJ), the Ministry of

Agriculture, the Amman Chamber of Industry (ACI),160 and the Federation of Chambers of

tee before the

morandum of

ess campaign

started and public seminars were conducted to explain what it meant for Jordan to join the WTO.

However, since the process of joining took more than five years, various changes that took place

of such a

irst CMA, the

r, people saw

making WTO

l Zone (QIZ)

model, introduced into Jordan in the late 90s. QIZ, a form of diagonal cumulation among Israel,

.161 Jordan’s interest then and now in QIZ

and other bilateral or regional trade arrangements does not of course contradict or in any way

negate the drive to WTO membership. However, the public was confused by these developments,

which also tended to make WTO accession appear less important.

Commerce. The secretary general of the MoPIC was the chairman of this commit

secretary general of the MoIT chaired it. This committee prepared a first country me

accession (CMA). After the cabinet approved the CMA, a domestic public awaren

in the country as a whole and in the economy in particular meant that the impact

campaign was limited. In other words, had accession taken place quickly after the f

public would have been less confused and more ready to accept admission. Howeve

negotiations seemingly drag on with new factors entering the economic scene and

membership appear less significant. This was the case with the Qualifying Industria

Jordan, and the US, quickly led to a massive boom in exports that overshadowed anything the

country has seen in the external sector for over a decade

160 Until the late 90s, the ACI was effectively the sole and national chamber of industry

161 The government’s interest in QIZ was clear, and focused on the employment effect, which also served to

empower rural women in some areas. Mohammad Halaiqah, Jordan’ chief WTO negotiator and later minister of

Industry and Trade as well as deputy premier for economic affairs, confirmed this in an interview with the author in

2004, but nevertheless emphasized the crucial importance of WTO accession.

185

Another source of confusion was rivalry among different government bodies over the process of

d in economic

inistry is the

elf out at the

ividual level

Jordanian

governments have on average short lives. In the 90s there were for example rumors that the

government was considering canceling the MoPIC and replacing it with a department in the MoF.

iament in this

ved by some

members of parliament (MPs) as imposed from abroad. A vigorous and well-informed parliament

would have provided valuable support to and oversight of the executive branch in preparing for

dinated to the

om members.

However most of the economic reform laws are advanced to parliament by the government. The

Lower House of Parliament, the House of Representatives, in particular did not play a major

effective role in the period before or just after the launch of WTO negotiations. The Upper House

of Parliament, the Senate, which has equal status with the lower House on the level of legislation

and the proposal of bills, fared somewhat better in this regard due to the generally higher level of

WTO admission. The MoPIC, MoF, and MoIT are the ministries typically involve

issues. The balance of power among them sometimes leads to conflict as to which m

most important in the economic sphere in Jordan. This kind of rivalry plays its

institutional level, where each ministry tries to show its significance, and at the ind

between rival ministers who want to hold on to their posts especially since

This indicates the level of insecurity under which some ministers functioned.

Another weakness in Jordan’s preparation for negotiations was that the role of parl

process was not significant, as the whole WTO admission process was percei

WTO access. In fact, in this as in other areas, Jordan’s parliament is somehow subor

executive.

In theory parliament can initiate a law if it gathers more than 10 signatures fr

186

awareness and expertise among its member, particularly in the economic sphere. However, the

Senate’s members are entirely appointed by the king and it thus appears to the general public as

an elitist institution in the negative sense.

ut reflected

g members of

nts, but this

sometimes transcended the geographic boundaries of lower house constituencies, as for example

ions of WTO

mid and later

ost countries;

however few Jordanian parliamentary discussants of WTO pose viable alternatives to what

ission. It was

he absence of

t ideology or

cs are mostly

at is based on ideology being the Islamists. However,

these blocs are important for MPS, given the limited capacity of support institutions to empower

independent lawmakers, a lack of adequate resources for MPs in general, and a shortage of

technical capacity provided by parliament to them.

In any case, Parliamentary debates on WTO issues in Jordan were not technical b

ideological differences and the narrow interests of various constituencies, includin

parliament themselves. Of course, parliamentarians need to represent their constitue

in the case of the deputy who was also the chairman of the private sector Contractors’ Syndicate.

However, overall concerns about the macro-economic or social and other implicat

membership were difficult to pinpoint throughout parliamentary discussions in the

90s. Of course, skepticism about international organizations and treaties exists in m

Jordanian governments proposed in the mid-90s regarding preparing for WTO adm

common in Jordan then and remains the case for MPs to gather in blocs due to t

viable political parties. An interesting feature of these blocs is that their basis is no

political thinking but rather special interests, whether personal or sectoral. The blo

of a temporary nature, with the only bloc th

187

In the mid-90s and today, perceptions in Jordan about the WTO are largely impressionistic, with

mixed views about the ramifications of joining the organization. There is confusion between

person is not

e meaning of

ership is not a matter of

choice but rather a compulsory commitment and they consider this as part of the SAP.

In a survey in the year 2000 by the Center for Strategic Studies at the University of Jordan162,

ic

ive economic

cted a limited

ents “did not

ive impact, a

substantial segment of Jordanians is unaware of the implications. When the question was

the free

O reconsider

d thing if it is

tion the interests of the poor and of small manufacturers. This group

likes to judge the decision on joining the WTO on its own merits and not on hypothetical

scenarios. They also perceive joining the WTO as a positive step since it means joining a world

trend and not being left isolated.

globalization generally and the question of membership. In general, the average

concerned about the WTO. Indeed in many cases only few know about it and th

joining. Those who know about the WTO are aware that Jordanian memb

responding to an open-ended question on whether joining the WTO would have great econom

benefits for Jordan, 33% of respondents answered yes, 34% expected limited posit

impacts on the economy, and 8% saw no implication. On the other hand 4% expe

negative impact, 5% expected severe negative implications, and 17% of respond

know.” This shows that while a majority perceives that the WTO has a posit

simplified as to what concerns people, that is when the question was posed in terms of

trade and competition, perceptions changed and many who oppose joining the WT

their prejudices against the organization. Many argue that it is not necessarily a ba

going to take into considera

163

162 Cited in al Khouri R and I Saif “Jordan WTO Country Report” F Ebert Foundation, 2003

163 Percentages do not add up to 100 due to rounding

188

Non-state actors

and that have

ustry, and the

associations,

TO was

limited at the outset. Since 1995 Jordan, was attempting to conform to WTO requirements, and

ent regarding

eld for CSOs

been calls for

in Jordan are

limited, and therefore their ability to engage in legislative lobbying is severely circumscribed.165

t on workers'

embership of

which is over 120,000. The more important of such are Engineers, Contractors, and Auditors. In

contrast to the ineffectiveness of workers' unions, it is important to refer to the considerable

influence exercised by the syndicates, which goes beyond protecting the interests of their

Several non-state entities representing the private business and professional sectors

a certain influence on government policy are the chambers of commerce and of ind

Professional Unions. The role of interest groups such as trade unions and business

as well as civil society organizations (CSOs) generally in the country's debate on the W

the country's membership was even delayed due to its slow pace in implementing legal and

policy reforms. Before and after accession, Jordanian trade unions have been quiesc

the WTO, but business chambers are becoming more vocal. Some seminars were h

and government to exchange views before and after joining,164 and there have

more such exchanges. This is because the technical and human resources of CSOs

Trade unions are quiescent, with rare exceptions; individual trade unions as well as the General

Confederation of Trade Unions have not shown, for many years, any major impac

fortunes in general. There are also professional syndicates in Jordan, the total m

164 Including among others events conducted in Amman in the 90s by the Naumann Foundation

165 al Khouri R and I Saif op cit

189

members to exercising some influence on political life, partly compensating for the

ineffectiveness of political parties.

ess chambers

international

ore seriously

thened technical team in the MoIT as well as devote more time

at cabinet level to accession issues.

and remained

equently, political activity was and remained spilling over into professional

associations, while various types of charitable organizations increased their political involvement,

any

tion have not

ecause of the

prevalence of security-oriented decision-making in politics and economics by elites closely

linked to the monarchy. Normally discussions that involve civil society organizations are not

formal and would take place in order to mobilize public support and facilitate the implementation

The gradual but accelerating involvement of these non-state actors - including busin

as well as a few individual companies, a handful of CSOs, and some local and

consultants - in the WTO accession process helped the government take the issue m

and commit resources to a streng

Though political parties were active in Jordan in the 1950s, they were later banned

so until 1989. Cons

as did labor unions.166

After 1989, there was an increase in the number of CSOs in the country, though not m

focused on overtly economy-based issues. Jordanian democratization and liberaliza

led to business or consumer grassroots movements of any great influence, partly b

166 For a typology of Jordanian CSOs (including the share of charity, service delivery, advocacy and interest groups and the share of chambers and unions) developments regarding

consumer groups, environmentalists or the like who are taking up issues related to the implications of economic reform, and interest groups such as business associations, see

Hourani H et al Directory of Civil Society Organizations in Jordan Al Urdun al Jadid Research Center, 2003, Sindbad Publishing House, Amman

190

of new laws. From the government's point of view, the involvement of civil society organizations

in the process of law making may help avoid negative political repercussions that might

accompany associate the introduction of new laws.

e the drafting

individuals or

such consultations take place. The second stage is when the law is drafted and made public.

or such tasks

d. CSOs may

how certain

ns and its subscribers could be affected. Parallel to this, CSOs could hold seminars in

order to mobilize the local media and influential columnists to support their demands and

cludes small

ial resources.

s professional

unions and the Chambers of commerce and Industry, is larger and more organized. This type has

a clear mandate and interest group, which is represented by a large number of influential and

active members. These organizations have adequate resources to conduct studies and can provide

funding for public awareness campaigns. Government is far more sensitive to these groups than

other groups of civil society organizations due to the vested interest that exists between members

CSOs are engaged in two stages of the process of lawmaking. The first one is befor

of the newly proposed law whereby members of the CSO may be consulted by

institutions who are involved in drafting new laws. However, this is not always the case. Often no

Affected CSOs would study the proposed law and discuss it inside their own institutions.

Research and legal departments within these institutions are normally responsible f

and would provide their recommendations as far as the proposed laws are concerne

also commission an external consultant to study the proposed law and indicate

organizatio

suggestions.

There are two kinds of civil society organizations in Jordan. The first in

organizations and CSOs that have a narrow focus and have limited access to financ

This type of organization includes charities, co-operatives, etc. The second, such a

191

of these organizations and the government. Furthermore, large CSOs can initiate contacts with

influential ministries and international organizations if they have a case to make. The first group

gainst certain

to MPs. They

ns that could

gements that

rly identified

stakeholders who can exert some form of collective action. It has become customary that the

In the case of

ew occasions

overnment accuses these organizations of speaking for themselves and not for the public at

large. This is the case when the consumers' associations slam the government for any increase in

prices.

g their funds

mbership and through the delivery of services since they reflect the opinion of the

majority of their members. While in the case of smaller CSOs, the government, through some

these small

organizations.

Though business chambers are becoming more vocal CSOs are worried that commitments on

liberalization and national treatment in the agreement lock Jordan into policies that might damage

development. The biases in the process in favor of developed countries and the disadvantage at

normally adopts informal and some times ad hoc conduits to campaign in favor or a

legislations. They rely on the media or send letters to the prime minister's office or

do not acquire resources to conduct thorough research to support public campaig

influence the course of debate. In the second group there are some institutional arran

can be traced. Furthermore this type of CSO represents influential and clea

government consults these organizations regarding new economic and business laws and

legislations. In many cases some of these individuals are members of the Senate.

smaller and less influential CSOs the stakeholders are clearly identified and on a f

the g

The government has little leverage to influence the position of large CSOs securin

through me

financial mechanisms, can extend help in return for the acquiescence of

192

which Jordan has been placed in WTO negotiations have frustrated Jordanian CSOs, which feel

that there should be rules on corporate responsibility to frame the power of transnational

corporations.

n neglected in

on represents

the development of civil society is important in better understanding successes and failures of

ncluding the

e time in the

21st century.

es not necessarily mean that civil society played an important role in the

economic reform process, whatever the role of civil society organizations (CSOs) might have

ps contrasted

se or character. Civil society thus includes business, professional,

and labor groups, as well as private voluntary organizations. Meanwhile, the Jordanian state’s

influence on civil society is as important (if not more so) than society’s influence on the state,167

including the process of lawmaking.

The role of civil society in the socio-political dimension of economic reform is ofte

reflections on development policies, restructuring, and liberalization. This dimensi

an aspect of the transition that influences reform. In the case of Jordan in 1989-2004, looking at

market oriented reforms, stabilization, and structural adjustment. This is especially true since the

re-emergence of civil society and the efforts to reform Jordan’s economy, i

introduction of many new laws or changes in old ones, more or less began at the sam

late 80s, and progressed with some interaction throughout the 90s and into the

However, that do

been in other respects.

In Jordan’s legal and political system, the term “civil society” is used to label grou

to the state, regardless of purpo

167 Khouri R “Jordan: a Constitutional Tribal Monarchy in Transformation” WB 2003

193

How do CSOs in Jordan affect policymaking or policy deliberations? The short answer is not

very much, though the minor impact they have today is the result of a giant step forward after

bers are also

the political

which CSOs

rs, including

ce of civil society lobbying in parliament on

economic issues.

nd structural

However, the

Governments

o supervise civil

society more closely. Jordan thus allows the development of relatively abundant CSOs, but has

in controlling opposition.

on process in

The issue of economic data and its application illustrates CSO difficulties. The vast majority of

Jordanian CSOs have scant or no resources devoted to an information and database unit that

reveals economic data affecting their members. The only exceptions to this are the older

chambers of commerce and of industry. In the case of the former, the Amman Chamber of

Commerce in particular has tried with some success to build a database and engage in a limited

economic reform and democratization were launched in the late 80s. Few CSO mem

sitting in parliament or otherwise involved in political life through a party, while

parties of Jordan are often built around family and clan affiliations. The extent to

influence the process of policy and lawmaking is thus limited due to various facto

weak organizational structures, and a near-absen

It is only in recent years - with increasing emphasis on economic liberalization a

adjustment - that the state has begun to withdraw from some areas of public life.

regime continues to see civil society as a natural (if somewhat weak) rival.

systematically co-opt existing CSOs, even creating artificial ones, in order t

also helped create captive organizations that actually aid the regime

Interest groups, not CSOs, continue shaping and influencing the economic decisi

Jordan, helping to decide the time and pace of reform and shaping its outcome.

194

amount of research, but this has not yet been of great help to member firms.168 The problem is

partly due to the indifferent attitude of some chamber members. As with membership of other

s an attitude among such Jordanians that militates against the effective

use of research and statistics.

nevertheless

there is greater awareness of the need for economic data of use to members, in contrast to the

er, these newer organizations do not have the

financial resources of the Chambers, and have only made limited progress in this regard, given

e members of

the old merchant class, new commercial elites have emerged with even stronger connections with

the state

sector and the

government hampers various types of new business. So long as many of the relatively new, post-

1989 CSOs have strong links with the state, change will remain shaped by the interests of

competing elite groups and individuals.170 The continuing dependency of the citizen on the state

CSOs, there is sometime

The case of the newer CSOs is somewhat more encouraging in this respect, but

problematic. For example, as regards some of the business associations formed in the 1990s,

attitudes of some in the older CSOs. 169Howev

the resources available.

However, CSOs had and still have little to do with such activity. In addition to th

high state officials. Despite progress in implementation of economic reform, the role of

in Jordan is still strong, and a strong network of corrupt links between the private

168 Author’s Interview with Abdullah Attieh, Head of research, Amman Chamber of Commerce. 2004

169 Author’s interview with Bassem Farraj, president of the Jordan Europe Business Association (JEBA), 2004; this information on JEBA is confirmed by the author, a co-founder

of the association (1995) and its vice-president 1995-7: in the mid-1990s there was an interest, which remains, in the association’s provision of economic information of help to

JEBA members. However, such activity was never undertaken on a systematic or widespread basis.

170 This is the opinion of Jordanian journalists and political figures interviewed by the author in 2005, including Rami Khouri, executive editor of the Beirut Daily Star newspaper

195

also mirrors the increased reliance of Jordan on international institutions and Western

governments.

enry or power

be a lack of

and scope of

c life, slowly

asserting the dominance of formal transparent rules based on law over tribal and personal

connections, and giving CSOs a small window within which to move into lobbying and

hing reforms,

ffected the design of reform,

tending to make it Western-oriented in spirit and presentation. In any case, reform was top-down,

wanted these

considerable,

ild consensus

through CSOs or a need to compromise with them to be able to implement reform, which

nevertheless was done very gradually in order to placate elements of the bureaucracy. In sum, the

legitimacy of the reform and the power of the reformers to push it through were not in question,

and the political and institutional processes by which affected groups influenced decisions about

the reform were not significant or problematic.

This has left little scope for CSOs to develop significant credibility among the citiz

within the establishment. In issues pertaining to the legal system, there tends to

disclosure and uneven enforcement of existing laws and regulations. Yet, the pace

economic reforms since mid 90s have started to transform aspects of economi

influencing lawmaking.

The interplay of powerful outside forces allied to upper echelons of the regime pus

with some bureaucrats and grass roots opposition against change, a

initiated by government, and only secondarily reacting to pressures from CSOs.

On the other hand, various foreign stakeholders with an interest in Jordan’s stability

reforms, and the support at high levels in Jordan that they were able to marshal was

especially under King Abdullah II. There was thus no serious need or effort to bu

196

Businesses in Jordan consistently complained that too much discretionary power is vested in

r other CSOs,

awmakers for

role of CSOs

n of the tariff

and not primarily by CSOs. The role of CSOs in precipitating change in this process through

lawmaking has been modest. However, state policy was not necessarily to approach CSOs and

e policies and

troduction of

which was vital to make up for the drop in state revenue caused by tariff cuts undertaken in the

en

Association staged resistance to the government when the latter imposed the GST Law in 1995.

Although the government managed to pass the law, it had to adopt some unusual tactics, such as

paid publication of studies that supported this law in daily newspapers in order to counter the

Customs authorities. Whether or not these charges were made through Chambers o

and whether these bodies made a serious attempt to become involved in lobbying l

change, has not been the subject of detailed research, but the impression is that the

in this process was and remains small. In any case, by the late 80s, “rationalizatio

structure to promote efficiency in resource use” 171 was being proposed by international donors,

work through them to lobby for change in laws.172

The meager testimony to the capability of civil society to influence and impact th

actions of the regime included resistance in the mid-90s to the GST Law, the in

run-up to joining the WTO.173 Chambers of Industry and Trade and the Jordanian Businessm

171 USAID op cit

172 By contrast, USAID continued to apply more participatory methodologies in its work on Customs. For example, in the mid-90s, USAID work on reforming the Temporary

Admission and Duty Drawback system of Customs relied heavily on focus groups. Of course this also provides insights into the strength of USAID in Jordan, and the weaknesses

of the process of participation and the lack of normal interface of executive – civil society, as that was something that had to be promoted by a foreign aid agency.

173 Hourani op cit p 16

197

opposition to the law.174 That such activity in the end did not amount to a great deal is perhaps

less important than the example set, namely that a handful of Jordanian CSOs were at least

part from that

and lawmaking in Jordan was limited, and

pressure to change laws and reform came from other directions.

Challenges

bers included

concerning intellectual property rights (IPR) with the United States.

However, this hurdle was surmounted through a determined reform effort by Jordan in patents,

aking in the

e of the major

e many other

CSOs, JIPA has been active in emphasizing the role of WTO-compliance (specifically regarding

TRIPS) in attracting foreign investment to Jordan, creating an environment conducive to long-

term economic growth. That JIPA is perhaps the exception that proves the rule regarding CSO

capable of speaking out on an economic reform issue that was before parliament A

one example, the interest of CSOs in economic policy

One of the principal challenges faced when negotiating with existing WTO mem

problems in resolving issues

copyright, and other areas of IPR.

This provides an interesting example of the work of CSOs in policy- and lawm

country. The Jordan Intellectual Property Association (JIPA) is a CSO that is awar

impacts of WTO membership on the Jordanian economy through TRIPS.175 Unlik

174 The then minister of finance approached various Jordanian economic and business columnists at the time and asked them to write on the topic in return for a fee that was vastly

larger than the meager amount normally paid for such work.

175 In the opinion of JIPA president Murad Bushnaq, and Vice-president Bassam Hajjawi, interviewed by the author in 2004

198

relative inactivity in the economic sphere is due to various factors. One of them is that JIPA is

largely made up of lawyers, who also tend to be from the higher socio-economic class of

re freely, but

as the World

l and decisive

ains that this

sisters. At the same time, JIPA’s aims are roughly those of the government in Jordan, which

made for a harmonious partnership of local and international officialdom with JIPA.

ht legislation,

future of IPR

that deal with pirated products fear the new Law will force them out of the market under WTO

rules, and local manufacturers of legitimate cultural goods complain that the three-times amended

legislation has not yet provided protection adequate enough to prompt them to consider placing

their products in the local market.

e signing of

the TRIPS. This has resulted in the removal of Jordan from the US watch list of countries failing

to ensure intellectual property protection, and has led to recognition of Jordan as a leader in the

region in the protection of IPRs. A major reason cited for Microsoft’s entry into Jordan is its

reforms in intellectual property and copyright laws. The Business Software Alliance, an

Jordanians. Their skill and connections allow them to talk to parliamentarians mo

they have also succeeded in soliciting the help of such international organizations

Intellectual Property Organization (WIPO). That is not to say that JIPA did powerfu

lobbying to make changes in Jordanian copyright and other laws, but the fact rem

particular CSOs role has been greater than that of most of its less well-connected or qualified

After Jordan acceded to the WTO and embarked on a campaign to enforce copyrig

illegal copying has dwindled. Given the increasingly optimistic language about the

protection in Jordan and in the midst of government attempts to modernize legislation, businesses

The legislative changes Jordan adopted to gain acceptance into the WTO included th

199

international organization committed to advancing world trade for legitimate business software

by advocating strong copyright protection for software, has also recognized the country’s

success. 176

al Intellectual

nt and 71 per

cent in 1995 and 1998 respectively. However, the situation in other cultural industries may not be

developing as positively, with book, music and audiovisual piracy levels probably still quite high.

on in Jordan.

rams Treaty

an and the US

in late 2001. These two Treaties establish several critical elements for the protection of

copyrighted works in a digital network environment, including a creators’ exclusive right to make

izations and others, ranging from the WB to the Motion Picture Association of

America, remain vocal in their demands for a stricter IPR regime, better copyright protection for

most products (with the possible exception of computer software) is becoming more of a priority

for the government.

On the other hand, this is an improvement from the 1990s, when the Internation

Property Alliance reported computer software piracy levels for Jordan of 75 per ce

At the same time, further improvements are foreseen in relation to IPR protecti

Ratification of the WIPO Copyright Treaty and WIPO Performances and Phonog

within two years is a stipulation of the Free Trade Agreement signed between Jord

their creative works available online.

As foreign organ

176 Hindi R “ar-Ra’i speaks to vice-president of Business Software Alliance” ar-Ra’i Arabic daily, Amman, March 5, 2003

200

ul adhesion,

s is the basis

menting such

ordanian public and private sectors, both

as to their duties and the problems associated with IPR protection.

plements the

many in the

country with

and access to

, in turn, help

to promote IPRs and other factors such as investment and greater bureaucratic discipline. Without

IPR protection, Jordan cannot have a healthy domestic publishing industry where authors are

r attract good

ng without an IPR regime with a

high level of protection. Where IPRs are protected, piracy rates have come down while income

tem, and thus

Those Jordanians who have benefited from weak judicial systems may begin to realize that their

incomes are being adversely affected by the weakness, and this may begin to build a broader

Partly as a result of the learning process involved in WTO application and successf

Jordanians now appear to have the political will to protect IPRs. Protection of IPR

for attracting investment and for the transfer of technology into the kingdom. Imple

an approach will require major efforts in educating the J

The challenge of promoting IPR protection will change in coming years as Jordan im

TRIPS agreement. Though fewer Jordanians say that IPR laws are unnecessary,

private sector are still not aware of WTO/TRIPS, and what it implies for them. As a

weak IPR protection, Jordan will lose ground in the competition for investment

technology. Properly enforced legislation could improve this situation. That would

compensated for their works, and cannot have an effective local music industry o

software developers. The latter in particular cannot make a livi

and creativity have gone up. Where creative people are not supported by the IPR sys

cannot produce and disseminate their creative expression, Jordan loses out.

201

consensus that there is a need to fix the judicial system. There is no tradition of good judicial

machinery, of the rule of law and criminal prosecution, other than through political or tribal

PR protection

ally. They are

vernment or otherwise being politically active, and they do

not have the funds to organize themselves.

The story of JIPA gives a good contrast to an otherwise lame Jordanian civil society. In this case,

ped the state

ry where the

te support of the

cause of JIPA should not be seen as a “victory” for a CSO “fighting” the powers that be. Rather,

ic issue.

bers to Jordan

ere handled relatively easily. Though some of the questions asked

at the working party stage were repetitive or barbed or simply showed the questioner’s ignorance

cials from the

Apart from TRIPS, the process of negotiation focused on agricultural products and the period of

concession that small developing countries like Jordan should take before fully opening up its

mechanisms. Correspondingly, in Jordan people such as musicians who depend on I

have been hurt so badly by the lack of it that they tend to be marginalized economic

not accustomed to lobbying their go

lobbying the government was done by well-connected experts who actually hel

accomplish what it was being asked to do under WTO rules. Thus, in a count

government is more or less authoritarian and does what it wants anyway, sta

this is an example of co-operation between the public and civil sectors on an econom

Apart from the TRIPS issue with the US, requests and questions from WTO mem

during the accession process w

of the applicant country, the educational value of the process, not least for the offi

applicant country, was significant.177

177 According to Tamam El-Ghul, head of the WTO department in the MoIT in an interview with the author, 2005

202

market. In 2003 the agricultural sector accounted for around 4% of GDP and 5% of total

employment. Given a limited industrial base, Jordan hopes to increase its agricultural exports to

tiation of the

ges in policy

was initially

nsuring at the

most important measures are elimination of production subsidies on food and fodder and the

e alignment

rporation179.

ls still exist,

n completely

eliminated180. Several bilateral agreements require pre-import licenses, which state and specify

the Ministry of Agriculture. Changes in administered prices have contributed to strengthening the

agricultural sector and improving its market flexibility. However some other problems have not

yet been handled with appropriate regulations for entering the most sophisticated European and

some developed countries in which it feels that it has a competitive edge. Nego

agriculture chapter, as required for WTO accession, called for profound chan

objectives and for the removal of several distorting measures. The pace of reforms

cautious but resolute, to make the economy more responsive to market signals, e

same time adequate popular support for change and to minimize social friction178. Among the

increase of prices of irrigation water close to more realistic values of scarcity and th

to near-market conditions of rural credits financed by the Agricultural Credit Co

However, government intervention still remains vigilant. Procurement price contro

but farmers are free to sell to private agents. Agricultural export and import are subject to

licenses, while customs duties exemptions on some products have not bee

the types, quantities, and season calendar for fresh fruits and vegetables, which are authorized by

178 The AMIR final report on implementation of law on agricultural products underlines that till 2001 there were impediments to implement an agricultural structural reform due

to: “ numerous and deliberate violations of WTO principle by high-ranking staff member of the Ministry; lack of co-operation in the Ministry, and from the ministry of Health with

TAU (Trade Agreement Unit); breakdown in co-operation spirit between TAU and IOAD (International Organization Affairs Department) of MoIT; rejection of draft agricultural

law for 2001 by parliament.” However, with one year of delay, in December 2002 the new strategy for the agricultural sector was approved.

179 Central Bank of Jordan, Annual Report 2002

180 AMIR Program (2002)

203

American markets: quality controls on production and on irrigation water, and infrastructure to

support and market the exports.

ively open to

orities and the

ition with the

inputs, durum wheat, barley, meat imported by meat preparations factories, wheat or muslin

er

and butter, all

s are charged

30% is

etables, olive oil, cut flowers, shrimps, prawns, oysters and other

luxury products. The highest protection is therefore granted to the main Jordanian exportables as

inning of the

cess of trade

claim - the organization’s unfamiliarity with some

of the issues involved. However, the late 90s witnessed a mutual learning process by both Jordan

and the WTO, so that, by the time of the country’s accession, there was enhanced familiarity on

both sides of issues that concern small acceding states.

204

Technical Assistance

racterized by

United States

ons including

e, extent, and

was a major element in supporting Jordan’s accession process and making the country better able

Western Asia

related to the

to channel such assistance provided by third

parties, and otherwise co-ordinating with member countries, including Jordan, in this respect.

181

rted Jordan in

trade is that

technical regulations applied to protect the health and ensure the safety of consumers. Standards

are formulated and set by the Jordanian Institute of Standards and Metrology (JISM), while

verification of compliance is the responsibility of agencies affiliated to different ministries and,

At the same time as Jordan was negotiating to enter the WTO, that period was cha

important flows of TA to the country, especially from such bilateral entities as the

Agency for International Development (USAID) but also international organizati

the IMF and the WB among others, as well as multilateral regional bodies. The typ

usefulness of such substantial TA received from bilateral donors and international organizations

to deal with the issues at hand.

Along with the above organizations, the UN Economic and Social Commission for

(ESCWA) became increasingly active across the region in the late 1990s in areas

WTO. This included extending direct TA, helping

This was especially the case in such areas as standardization,

A major positive effect of TA resulted from the help of GTZ and other who suppo

the area of standards and specifications. A potential non-tariff barrier (NTB) to

imported goods are required to meet national or internationally recognized standards and

181 See for example the report on the ESCWA Expert Group Meeting on Standardization in the Arab Countries, Amman, 2-5 February 1999

205

for imported goods, by the Control Department of the same Institute in the Ministry of Industry

and Trade. Importers are usually required to deposit three samples for inspection, prior to import.

organization

oluntary ones

t. JISM is an

he health and

private sector

in enhancing the quality and competitiveness of Jordanian products. JISM does this through

international

pave the way

xports to international markets by signing global and multilateral mutual

recognition agreements to get international recognition of the Jordanian conformity assessment

systems and results.

stoms duties,

mplementary

e, promoting

the domestic

industries in particular. In this regard, a new Customs Law was promulgated in 1998 aiming at

developing and updating customs procedures to satisfy WTO requirements. This Law was

amended several times, most recently in 2000 where the top rate of customs tariff on imported

goods was reduced from 35% to 30%.

That the formulation and the enforcement of standards are carried out by the same

now makes their administration easy. Mandatory standards are to be replaced by v

or by technical regulations consistent with the provisions of WTO TBT Agreemen

independent institution established to play a leading proactive role in protecting t

safety of Jordanian citizens and the environment and to act as a major partner to the

development of national standards and guidelines on conformity assessment practices that are

harmonized with international ones, and through active participation in the work of

standards and conformity assessment procedures to facilitate trade with Jordan and

for Jordanian e

TA was also forthcoming from GTZ and USAID, among others, in the area of cu

where the Jordanian government adopted a number of measures in the last decade co

to those taken before, with the aim of supporting the liberalization of foreign trad

investments, and upgrading the competitiveness of the economy in general and

206

With TA from the WB and bilateral donors, since 1996 Jordan has embarked on a program to

develop the export sector, including modification of import and export procedures, which were

finally amended in March 2000 to make them compatible with WTO.

as adopted a

the economy

Law (25 of

2000) provides the legal framework of the divestiture program. Main objectives of the

n

uctivity, and

re and public

he 90s Jordan

beralizing the

economy. The government adopted a national privatization program as one of the centerpieces of

ore

1996 and an

managing the

privatization

main factors

which negatively affect its efficiency and costs: the high cost of transport by lorry to and from

Aqaba as well as to and from neighboring countries, the ailing status of the railway system (few

lines and in bad condition), and the need to upgrade the Aqaba ports. These inefficiencies are

transferred to freight costs, which in Jordan still are some two to three times higher than in

countries with similar location (Tunisia and Turkey). A second problem is the quality of services:

207

e.g. the cases of containers in the port of Aqaba, which remains non-competitive compared to

other ports of the region, given the gradual reorientation of Jordanian exports as well as the

al reform and

ship, and road

ignificant entry restrictions. Port and road

transport liberalization and air transport privatization are critical.

Customs Procedures in Jordan have been significantly simplified in the last few years, in part due

nistration. To

and USAID),

on system in

electronically

ntering from

neighboring Arab countries or Israel a different procedure is applied. Controls have been

y

Agreement

nt of Article VII of the GATT 1994), according to which the invoice, i.e. the amount

paid or payable between buyer and seller, defines the “transaction value”. These improvements

ordan remain

frustrating.

This TA available in the late 90s and into the following decade also served Jordan well in helping

the government to prepare for implementation of commitments made during the WTO accession

negotiations, both before and after the country acceded.

changing composition towards more value added products, mandate that structur

further investments should continue. Third, air transport is restricted by state owner

transport, which accounts for 65% of all imports, has s

to the need to improve the co-ordination and programming capacity of the Admi

this end, Jordan has adopted ASYCUDA (with TA in this regard coming from GTZ

the information system of customs administrations and procedures. The declarati

Jordan was computerized in 1998, so in principle a Customs Declaration processed

by the agent must accompany the imported products. Only for products e

simplified and inspections can be avoided when the documentation is declared sufficient. Finall

with Law 16/2000 Jordan accepted the terms of GATT Customs Valuation

(agreeme

reduced substantially the costs to users. Nevertheless, customs procedures in J

208

Implementation of commitments

etitiveness, in

ade recently

mitments to

t years. In particular, the

maximum tariff rate will be reduced to 20% by 2010 under the WTO agreement.

ed to 20% by

n technology

or reduced to

2003 fell to

13.2%, from 21.3% in 2000. The overall degree of protection granted to the Jordanian economy

ff schedule is

rates, though

10 and 30%,

ced over the

present decade to meet the WTO commitments. Import licenses were the most important NTBs to

trade till 1997. Since then there have been several reforms in this area as well that are in line with

the commitments requested by the WTO accession. Till 1997 import licenses were regulated

through a particular regime that allowed for more discretion than the quota system, since the

latter had never taken root in Jordan. In the framework of trade liberalization reform this

To further boost Jordan’s attractiveness to investors and strengthen export comp

2003 the government cancelled customs duties on 492 imported capital goods, and m

did the same for production requirements. Jordan Acceded to the WTO with com

gradually reduce tariff and non-tariff barriers over the next eigh

Under the terms of Jordan's membership of the WTO, custom tariffs must be reduc

2010. In addition, different staging is provided for chemicals and informatio

products in several tariff lines. In 2005 all these duties will completely be abolished

5.5-6.5%. Accordingly the weighted average most favored country (MFN) rate in

has declined significantly, now among the lowest in the MENA region, to encourage deeper and

less vulnerable trade integration with the rest of the world. Currently, Jordan’s tari

fairly transparent at the Harmonized System section level with relatively few tariff

it varies in the 6411 tariff lines. The schedule has five ad valorem rates: 0, 0.5, 5,

with a mean unweighted average rate of 13%. The rates will be gradually redu

209

approach was changed in 1997 by Regulation 1/1997, which brought the first change in how

licenses were granted, followed by Import Export Law .20/2000 and Law .21/2001, subsequently

hich established that the import licenses were no

longer necessary except for limited categories of goods

rt and export

uption in the

country that discourages foreign investors. Generally speaking the license is automatic and is for

ublic safety,

morality and

tions. Thus, the approval to import certain goods is

required from authorized bodies (Ministry of Agriculture, Ministry of Health, etc) before the

importers are able to apply for an import license.

those goods

originating in signature countries. The Line Authority – part of the MoIT – has the authority to

revoke licenses but the decision may be appealed before the High Court of Justice in 6 days182.

Import firms must be registered with the MoIT, which grants a one-year import card for a

amended by the Temporary Law 18 of 2003, w

The aim of this new automatic licensing system, which greatly simplified impo

procedures, was not only to facilitate trade but also to attempt to eradicate the corr

the most part a mere formality. Nevertheless, according to Import Export Law of 2000 and

subsequent laws, the license is necessary when justified by the protection of p

environment, public health, natural resources, national security, public order, and

for goods subject to quantitative restric

Licenses are also still required under bilateral agreements and protocols for

182 According to the MoIT's Import Instruction 1 for 1999 the import of some products is subject to restrictions and requires prior permission from the MoIT. The Government

bans the import of plastic waste, passenger cars that use fuel other than gasoline, motor vehicles used for transport of goods that are more than ten years old. Import restrictions on

live animals; plants and plant material; arms, ammunition and explosives; narcotics and drugs; human remains; pharmaceutical and chemical products; medicines and vaccines;

motorcycles (restricted to Government firms only).

210

nominal fee. If not registered, the importer must pay a penalty equal to 5% of the value of goods.

A license, however, is required for goods entering the country under Temporary Entry status,

bonded goods, and goods entering under the Investment Promotion Law.

items, which

accession to

s of the WTO regarding the ceasing of

particular privileges granted to the above state enterprises.

mptions from

eliminated by

like fertilizer,

s and foreign

debt repayment schemes. Foreign inputs used in the production of exports are exempt from

re on a reimbursable or drawback basis. These

provisions, however, have been postponed till end-2007 because the WTO has recognized Jordan

the transition

However, this long and difficult process requires strong public intervention to establish a

regulatory system able to guarantee competition and at the same time protect service users. The

most important efforts and achievements have been in the telecoms sector and financial sector.

The public sector continues to play an important role, notably in imports of certain

may be undertaken only by specific state-owned organizations. However, following

the WTO Jordan has observed almost all the provision

In accordance with the WTO commitments, the export subsidies – full or partial exe

import duties and income tax – that were granted to all exporters should have been

end-2002. However there are exceptions, which include important export sectors

phosphate, and potash, in addition to exports governed by specific trade protocol

custom duties and all additional import fees a

as a developing country member and as such it has the right to an extension of

period before it must eliminate export subsidies.183

183 WTO decision G/SCM/95/Jor/ Suppl.1 of 30 July 2003 and Decision G/SCM/114/JOR of 5 July 2004

211

Jordan has made considerable progress in reforming the telecommunication sector. The key steps

ordan was the

r countries in

ments of the

s committed under the WTO

agreement, starting from the extension of the number of GSM licenses by 2005.

result of the

ssion. In the

ice passed no

some directly

the

king to issue provisional laws covering matters that cannot be delayed. Such provisional laws

placed before parliament at the beginning of its

next session. That has happened starting in late 2003, with the result that little changes have

in the economic laws in question, and no harm has been done to Jordan’s WTO

commitment process.

Conclusion

Jordan’s acceded to the WTO after more than five years of preparation and negotiation that,

though perhaps uneventful compared to other countries, may provide valuable lessons to

were taken under Law 13/1995 with the establishment of a regulator of the sector. J

first Arab country to allow foreign participation in the fixed line services, while othe

the region have preferred to open only the mobile telecoms. The 2002 amend

telecommunication law accepted the principle of more competition a

One anomaly in the case of Jordan’s WTO commitments could have arisen as a

parliamentary vacuum that existed in the country for a period shortly after acce

absence of parliament, which was the case in 2001-3, the government then in off

less than 140 temporary laws, of which several were of an economic nature, and

related to WTO commitments. The constitution empowers the cabinet with the approval of

shall have the force of law provided that they are

occurred

212

developing economies entering into or involved in the accession process, and to agencies that

finance or provide TA for WTO entry.

not stop at a

h necessitates

onflict and its

both the microeconomic level aiming at improving the efficiency of markets and the global

competitiveness of industries, as well as at the social level aiming at alleviating unemployment

my, a shift in

been a gradual, unilateral removal of trade barriers since 1996.

Government efforts addressed trade-related legislative adjustments in customs and taxes, patent,

policy through accepting and

implementing the non-discriminatory principle of the WTO. Trade reforms have been

d legislative

adjustments in customs and taxes, patent, copyright and trademark protection.

WTO accession provides a framework for trade liberalization and for the credibility of the

country. Following two unilateral tariff reductions, in 1996 and 1998, the maximum import tariff

has been cut from 50% to 40%. Finally the tariff reform of March 2000 reduced the maximum

Naturally, there is still ample room for further reform and the process should

particular time. One important impetus is the turbulent regional environment, whic

a continuous review of Jordan’s policy framework. A fresh example is the Iraqi c

repercussions. A second and important driver for continuous reform is the unfinished agenda at

and poverty in Jordan.

Jordan focused on trade liberalization to integrate the country into the world econo

trade policy. Thus, there has

copyright and trademark protection.

The past decade was characterized by a successful shift in trade

implemented gradually since 1996. State efforts addressed unilateral trade-relate

213

MFN rate from 40% to 30% and committed to binding most of its tariffs at a 20% ceiling by

2010.

imported and

law 6/1994.

e rate ranged

ucts imported

into the country are now subject to 13% value-added tax, except for those qualified for a higher

year 2004 to offset the

decline of customs duties brought about by the further liberalization of the trade regime. Other

4.

itive gains to

Jordan, particularly in the economic fundamentals. Such gains were important for boosting

, but progress made in these areas is still not enough to offset the

negative impact of other unfavorable factors, such as the impact of regional volatility and

The reform process should aim at enabling Jordan to become a self-reliant and self-sustaining

economy to reduce its vulnerability to external shocks. On the fiscal front, revenue generation

In addition to customs duties, a general sales tax (GST) is levied on a number of

locally produced goods and services. Law 18/2000 amended the General Sales Tax

Till 2000 GST were levied at the standard rate of 10%, while for automobiles th

between 62% and 141%. On 1 January 2001 VAT succeeded the GST and all prod

rate or supplementary sales tax. The basic rate was raised to 16% in fiscal

additional fees, para-tariffs and surtaxes were consolidated into the tariffs in 199718

The structural reforms undertaken so far by the government have led to clear pos

growth, giving a greater role for the private sector and creating a more diversified product and

market composition of exports

neighborhood spillovers, the heavy dependence on traditional products and markets, and the

weakness in global competitiveness.

184 Duties and Taxes Consolidation Law 7/1997

214

should be based on invigorating sustainable and private sector-led growth to ensure local and

sustainable public funding. The national privatization program has a pivotal role in this direction.

nd connected with available

government revenues with a view of avoiding the need for external borrowing.

are and the

they aware of the Singapore agenda or issues concerning labor standards or environment. The

arginal

and decisions. Had the accession process been better prepared and

presented to the public from the beginning, perceptions in Jordan of the WTO would no doubt be

Few experts express their concern about the liberalization of the services sectors that was

y. Very little

ges posed by

competition

ernment thus

Experts are unsure whether the private sector is ready for the

complete liberalization of trade and services. This is so because they observe that the private

sector in Jordan is still lobbying for more protection using the same old rhetoric about the

limitations of small developing country.

Furthermore, government expenditures should be rationalized a

Generally, the public does not know what the implications of joining the WTO

difference between the various rounds of talks from Uruguay to Doha and Cancun. Neither are

WTO is viewed as a club of the rich more than as a forum for the poor, who have a m

impact on WTO rulings

different and probably better.

launched in Doha round despite the fact that Jordan is a service-oriented econom

efforts have been pursued in this regard to prepare the services sector to new challen

Doha round. The imposition of rules such as labor regulations and investment and

laws represent a form of foreign intervention and adherence to transnational gov

undermining domestic authority.

215

In the run up to the 5th WTO Ministerial (Cancun), the Jordanian government continued to favor

gradual liberalization while fighting unemployment and poverty. The Doha Conference outcome

pecially new

erceptions of

sparency. The

in decision-

negotiations that is larger and more intrusive than even that of the Uruguay Round. There is a

ervices. Non-

ent vis-à-vis

and national

treatment may cause problems in services such as Jordanian tourism, which is badly hit under

present regional circumstances. On the other hand, the country's fragmented financial sector,

nefit from the

government

procurement and trade facilitation) imply a heavy work program. If a decision is then taken to

begin negotiations, the workload will increase. Should negotiations lead to new agreements,

obligations on Jordan will be much heavier and the WTO's mandate would immensely expand.

Whether that happens will depend on Jordan deepening understanding of issues, whether it

came through a process in which views of developing states on important issues (es

topics and elements of a new round) were not reflected. This gave rise to p

manipulation, bias towards major developed countries, and concerns over tran

WTO process also raises the issue of the limited ability of Jordan to participate

making. The WTO heavy work program is a great burden, effectively an agenda for multilateral

lack of capacity of Jordan to negotiate these issues, given shortage of human resources.

The WTO's non-discrimination principle can be problematic when applied to s

discrimination in this context means that the strong foreigner is given equal treatm

weak local firms. As such, GATS can restrict policy space, and rules based on MFN

which the government has been trying to consolidate through merger etc, might be

increased competition that comes about under GATS.

Negotiations on Singapore Issues investment, competition policy, transparency in

216

considers it in its interest to have these proposed new agreements in the WTO, and whether it can

persuade developed countries to respect its position or stand up to pressures from them.

t states. The

s and Jordan.

firms are not

petition and

transparency is fairly recent, so engaging in international negotiations at this stage may be

n Free Trade

's clause on labor rights, but are also beginning to feature in debates on the WTO

along with questions of poverty eradication, sovereignty, gender equity, human rights, and the

environment.

ups of 'trade,

rce and small

me aspects of

y some rules (including anti-dumping and subsidies)

and dispute settlement; and reviews of the TRIPS and TRIMs agreements. With a large debt

burden, Jordan is concerned with the TDF issue, but here again the country’s limited negotiation

resources and technical expertise are drawbacks.185

Proposed investment rules are designed to limit governments not investors bu

implication of a WTO investment accord is asymmetry between developed state

Thus, balanced agreement within the WTO might be tricky, as obligations of

considered. In addition, Jordan's experience when it comes to regulations on com

premature for such a small country.

Social Standards Debate have most notably been recently raised in the US-Jorda

Agreement

The post-Doha work program also includes examination in two new working gro

debt, and finance (TDF) and 'trade and technology transfer'; discussions on ecomme

economies; new negotiations on market access for non-agricultural products and so

trade and environment; negotiations to clarif

185 al Khouri R and I Saif op cit

217

Jordan's application and eventual membership in the WTO led to and continues to result in

t changes in

are largely

ubt that WTO

6 and not the

WTO process and its heavy technical workload raise the issue of the limited ability of Jordanian

e issues now,

es to exercise

negotiations on investment

and other new issues are to begin. Some seminars have been held to give CSOs and the

187

policy issues,

Jordanian CSOs tend to rely instead on economic reporting and analysis in the country’s daily

newspapers for needed information in this regard. However, both sides, the media and civil

society, prefer contact with the government than with each other. In any case, the quality of

measures assuring a more liberal and open foreign trade regime, including significan

economic laws. Though the general perceptions in Jordan about the WTO

impressionistic with mixed views about the ramifications of joining, there is no do

accession was the prime mover in the reform of Jordanian laws in the late 90s,18

role of any CSO organizations. Civil society was not seriously involved in this change, and the

CSOs to participate in it.

CSOs are against the WTO having negotiations on investment and other Singapor

asking for transparency in the WTO process, with clear rules for developing countri

their right to participate in decision-making, especially on whether

government the opportunity to exchange views, but more such activity is needed.

As a result of lack of a framework and/or resources to undertake research on

186 According to many observers and stakeholders, including Maha al-Ali, a member of the Jordan WTO accession team and now head of the Foreign Trade Policy department of

the MoIT, interviewed by the author in 2005

187 al Khouri and Saif op cit

218

economic reporting and comment in key Jordanian newspapers is generally weak, though there

have been notable exceptions. Jordan’s mainly state-owed or government-influenced media in

conomic reporting and commentary

that was sometimes sycophantic and often unprofessionally produced.

or changes in

ss

lobbies react at different levels ranging from newspaper comment and opinion to presentations or

groups, e.g. Chambers of Commerce regarding the laws concerning

the above measures. However, for such activity to target or have an impact on parliamentarians

the country

have not sufficiently addressed the socio-political environment, which strongly influences

economic performance. This has led to a vicious circle where civil society remains weak and

makes reform

sonal ties still

determine access to market information etc, and Jordan remains characterized by the duality of

informal social patterns related to rentier economy and formal institutions pertaining to the

concept of a market economy. The interaction between these dualities is complex, and includes

relations between and among policy communities (loose connections based on family or other

concerns), and policy networks (based on co-ordinated positions and campaigns to impress the

general and newspapers in particular continue to publish e

Regarding changes in tax and tariff rates, the progress of important proposed laws

existing measures is reported in the news media, and the general public as well as busine

protests by specific interest

remains problematic.

Jordan’s economic reforms have been partial achievements. Structural reforms in

CSO intervention in economic policymaking is meager, all of which probably

slower, thus perpetuating civil society weakness etc.

Nevertheless, Jordan is moving in the direction of a market economy. However, per

219

policymaker). In any case, the groups that benefit most from such a situation are those that still

dominate the economy through the state. Given the prevalence of political patronage in the

hat such groups would act as the spearhead of new market-oriented

economic behavior in Jordan.

o the idea and

under powerful constraints that preclude the incorporation of demands from below to lawmakers

eally the emergence of civil society will occur when institutionalized

organized groups are in a position to exert effective pressure on ruling elites, but this has yet to

ion remains a

difficult one. Traditionally, a major complaint of businesses in Jordan has been the uncertainty

over-regulation creates

opportunities for corruption. However, Jordan has heeded the need for change in recent years by

increasing the

.

A main lesson learned from an examination of reform in Jordan over the past decade and a half is

that extensive foreign assistance is needed to implement such change. The US administration

country, it is unlikely t

Even after a decade and a half of reform and restructuring, the country is still new t

will require time in getting prepared for legislative reform. Civil society and reform are operating

for systemic change. Id

happen in Jordan.

At the same time, the process of writing new economic laws in the era of globalizat

and high cost of dealing with government administrations. The process of making, changing,

enforcing and applying laws is unfavorable to business, while

stepping up efforts to boost government performance. The main thrust has been on

bureaucracy's responsiveness, and the system has demonstrated limited transparency

220

alone allocated $456 million in assistance to the kingdom in its budget for 2005.188 This

relatively large amount, equal to roughly five% of the kingdom’s GDP, is more than matched by

r, the trend in

up, with the kingdom receiving far more foreign assistance now than it did a

decade or so ago.

largesse. However, this has gone mainly to the state, and more could be forthcoming to finance

ep in the right

ample, regular meetings with the country’s main export group, the Jordan

Exporters Association, have proved to be valuable to both sides in airing problems and helping to

Anticipating more WTO negotiations, some Jordanians want a study process to be initiated to

ulted in de-

The negotiating tactics in Doha seemed to be for developed countries to produce a draft proposal

at the last minute and force others to accept or come nearer to it. There should be a stipulation

total aid from other sources, notably the European Union states and Japan. Moreove

this respect is

Reform efforts in general in Jordan have benefited from substantial and increasing foreign

specific TA at the business association level. That Jordanian Customs and other state bodies are

now taking greater notice of business associations and other CSOs is certainly a st

direction. For ex

resolve disputes. 189

take account of their concerns that previous industrial tariff cuts had res

industrialization and closure of local firms.

188 “US allocates $456 million in aid to Jordan next year” ar-Ra’i 5 February 2004

189 Information obtained from Halim Aburahme, general manager of the JEA, interviewed by the author in 2004

221

that in future rounds no new texts will be put for adoption without delegations getting sufficient

time to study the matter and consult their government.

ent processes

a have made

form to make

is weak, to protect itself from the strong. The

Arab countries should be lobbied to support this position

ordan’s experience include the enormous time and work involved

in WTO accession, which however does allow the applicant an opportunity for a thorough review

of its economic policies as a whole.190

onal priorities

dia

Though developed countries and the WTO secretariat promised to ban non-transpar

and ensure greater participation of developing countries, procedures used at Doh

clear that the situation is even less satisfactory than ever and that there is need for re

the process an efficient forum for Jordan, which

The lessons to be learnt from J

Recommendations

Developing countries entering or in the accession process should push to form nati

for the WTO accession effort through open public debate, in parliament and the me . That both

nprofessional could have been remedied by

strong grass roots efforts by the national leadership

groups in Jordan were and often remain timid and u

. That was not wholeheartedly undertaken by

Jordan before 1998, but must be attempted by acceding states. At the same time, it is crucial to

familiarize parliamentarians and journalists with WTO issues.

190 According to Tamam El-Ghul (see note 26 above)

222

These countries must develop necessary government skills to participate in and complete

hboring statesaccession negotiations partly by seeking the advice of similar economies and neig

that have gone through the WTO entry process. The feeling among cynics in Amm

90s was that Jordan started it negotiations unprepared: otherwise, why was the tec

WTO entry left for thirty months to a staff of two people? Now, after serious e

strengthening on the technical side in the late 90s, Jordan has managed to export its W

but this is an expensive step that could perhaps be pushed later.)

Agencies that finance or provide TA on WTO accession must

an in the mid-

hnical side of

xpansion and

TO

accession expertise to other Arab states, to the mutual benefit of provider and recipient. (An issue

of relevance to Arab countries acceding would be adopting Arabic as an official WTO language,

f local CSOs,involve expertise o

academics, and consultants, irrespective of whether governments can or want to do so. This,

which did not happen sufficiently in Jordan’s accession, is not only usually cost-effective, but

also helps support for the process percolate into the national system and assists in capacity-

building that serves the country well after accession.

Beware of large overlapping TA programs, which are wasteful and can also cro

expertise. It is difficult to say no to TA, but in all cases it should be looked at critic

wd out local

ally. Massive

foreign aid was provided to Jordan after the Middle East peace process started to unravel in late

1995. The reductio ad absurdum of the avalanche of foreign assistance that then hit Jordan would

have been USAID consultants negotiating with American counterparts on behalf of Jordanians.

The good news was that by and large the advice provided by outsiders to Jordan during the

223

negotiation process was sound, but aid, like most other things, can involve diminishing returns,

and recipients should not be over-eager to receive it.

Finally, do not overestimate the WTO secretariat. The experience of Jordan appea

that staff members of the organization are on as much of a learning curve as c

applicant countries. This is not to diminish the role of TA from the WTO itself, whi

case was extremely important. However, applicant countries should rem

rs to suggest

ounterparts in

ch in Jordan’s

ember that each

accession is unique and has a lot to teach the WTO itself.

w starting to

tors from the

ot entirely to

ases spurious

and propagandistic. To remedy this, TA could be extended to CSOs

Five years after accession, the benefits of WTO membership for Jordan are only no

be understood clearly at a popular level.191 Greater participation of non-state ac

beginning would have accelerated this process, but the state’s paternalism is n

blame, as the anti-WTO arguments that CSOs sometimes advanced were in some c

. However, this is not easy, as

cess is also

aid policy could be the granting of

support to the research and documentation departments of business associations. Other

suggestions for entry points to support CSOs would be more practical training for journalists in

economic reporting192, and for civil society activists in lobbying.193

such organizations are often unequipped to handle serious assistance. The pro

expensive. In such a situation, possible entry points for

191 As confirmed by expert observers including Jawad Anani, former Jordanian minister of Industry and Trade and

deputy premier during part of Jordan’s WTO accession period

192 For more information on such training, see www.jemstone.net , the website of the Jemstone network, which has been active in media development in the region in general and

Jordan in particular for close to a decade.

193 As discussed by the author with Heba Shazli, director of the Middle East department of the Democratic National Institute, Washington DC, interviewed by the author in 2004.

224

Small countries could improve their bargaining positions if they unite and address their issues of

concerns collectively. Regional context initiatives were overshadowed by poli

among Arab countries. However, with the advent of globalization, Jordan like othe

the region be

Achievement of Market-friendly Initiatives and Results (AMIR) Program/USAID

accession a

Coopers and Lybrand on “The Economic Impact of GATT/WTO membership o

Assessment”

Hindi R “ar-Ra’i speak

Amman, March 5, 2003

ESCWA report on the Expert Group Mee

2-5 February 1999

Hourani, H

tical mistrust

r countries in

gan to appreciate the asymmetry of power and influence between them and the

developed world.

Bibliography

"WTO Post-

nd Compliance Overview for Jordan,” 2002

n Jordan: an

ad-Dustour Arabic daily, Amman, "Border regulations issued for IPR protection" 31 August 2000

s to vice-president of Business Software Alliance” ar-Ra’i Arabic daily,

ting on Standardization in the Arab Countries, Amman,

et al, Directory of Civil Society Organizations in Jordan Al Urdun al Jadid Research

Center, Sindbad Publishing House, Amman 2001

Jordan Times daily, Amman

al Khouri, R

225

“The Regulatory and Policy Framework for Exports in Jordan: a Survey and Proposal for

Change” for the USAID Private Services Development project, unpublished, Amman, March,

dan: a Survey

r Change” for the USAID Private Services Development project, unpublished,

stries in Selected Arab

Countries, the World Intellectual Property Organization, Geneva, 2004

s,” WB 2004

ert Foundation 2003

2004

United States Agency for International Development (USAID) Jordan “Statement of Work,

Export Trade and Productive Investment Project” unpublished, Amman 1989

1990

“The Regulatory and Policy Framework for Exports and Foreign Investment in Jor

and Proposal fo

Amman, July, 1990

“Copyright Industries in Jordan” in Performance of Copyright Indu

“Governance Case Study of Jordanian Custom

al Khouri, R and Saif, I “Jordan WTO Country Report” F Eb

ar-Ra’i Arabic daily, Amman

“US allocates $456 million in aid to Jordan next year” 5 February

226

by

J

________________________

MONGOLIA- PREPARING FOR A WTO ACCESSION NEGOTIATION

Horloo Oyuntsetseg, LLM/ International Public Law

anuary 2005

In 1993-1997 the author was involved in the accession process of Mongolia in hercapacity as Director of the Treaty and Law Department of the Ministry of Trade and Industry and later as a Counsellor of the Mission of Mongolia in Geneva.

The paper expresses the views of the author solely.

227

1.

ariffs andrld Traded country

.

ique case.learnt. It

should be noted that country-specific and/or comparative studies on accession of ry scarce.

rocess of Mongolia’s accession due account should be given economic

n Easternd its close

y started a economicn adoption

ased on democratic values. The former “People’s . Politicals freedom

nt foreignon into they. In earlyS, Japan,

nvestmentes like, Germany, France, UK. In 1991 it became a

Mongoliacustoms,

period of

USSR andr Mutual

he USSR,f the block of socialist countries Mongolia faced a severe economic

crisis. Inflow of soft loans, subsidies from the Soviet Union suddenly stopped. e at worlde of trade,

both exports and imports, resulted in critical shortage of basic consumer and industrial goods. Inflation reached triple-digit. During 1990-1992 GDP decreasedby more that 20%.

6. To address the grave economic situation the Mongolian Government in parallel to the political change started very decisive economic reforms towards a transition

INTRODUCTION

1. Mongolia applied for a membership in the General Agreement on TTrade (GATT) in 1991 and formally became a 130th member of the WoOrganisation (WTO) in January 1997. After Bulgaria it was the seconfrom the former centrally planned economies to join the multilateral trading systemFor many applicant countries accession to the WTO has been and still is a difficult,lengthy, sometimes a painful process. Nonetheless, each accession is a unMongolia’s accession also represents unique features of lessons to be

and implications on small developing economies like Mongolia are still ve

2. In examining the pto the factors of its timing and the patterns of the country’s political anddevelopments at that time.

3. Mikhail Gorbachev’s perestroika and the democracy movements iEurope in late 1980s had a significant influence on Russia’s neighbour anally – Mongolia. After seven decades of Soviet style ruling the countrdramatic shift towards its total change and far–reaching political andreforms. First multiparty free elections took place in 1990, followed by ain 1992 of a new Constitution bRepublic” was renamed “Mongolia”, the first ever President was electedreforms went beyond free elections. Civil liberties, human rights, religiouwere widely recognised and advocated.

4. Since 1990, Mongolia also pursued the development of an independepolicy. Developing relations and cooperation with new partners, integratiinternational community constituted an important part of its foreign polic1990s Mongolia concluded for the first time trade agreements with the UCanada, trade, cooperation, textile agreements with the EU, series of iagreements with leading economimember of the World Bank and the IMF, ADB. At the same time,adhered to the most of the international organizations and conventions onprotection of investments, intellectual property rights. It was indeed aopening the country to the outer world.

5. Prior to 1990, over 80% of Mongolia’s trade were with the former15% with other socialist countries of the so-called CMEA/Council foEconomic Assistance/ block. In the aftermath of the dissolution of tdisintegration o

Terms of trade with Russia and CMEA group changed to a dollar tradprices and international commercial practices. Sharp decline in the volum

228

from centrally-planned system to a marked-based economy. The reformslaying policy and legislative foundations for a new economic order. Implof reforms included phased liberalization of state-controlled prices, liberaforeign trade and investment regime, adoption of a free floating exchsetting–up a commercial banking system, launching a large-scale prprogramme. In 1990-1992 legal reforms introduced for the first time theof market economics, such as Banking Law establishing two-tier bankinLaw on Business Entities/Company Law/ endorsing creation of public acommercial entities, and abo

of local and foreign entrepreneurs.

7. Collapse of the guaranteed market, price and payment arrangements mwithin CMEA block also required a totally new approach in traDevelopment of an outward–orieintegration into the commonly recognised international trading rules wereas priority goals of the reform process.

technical issues as wellics of the process.

2. APPLICATION STAGE

9. Until late 1980s there was a rare mention of or expression of inteGATT affairs in the Government documents and communications betMission of Mongolia in Geneva and the headquarters.

10. In early 1988 the contacts in Geneva with the senior officials of tSecretariat, notably with the Director-General were initiated. The MGeneva started sending reports on activities of the GATT and on-goingRound/UR/ negotiations. The messages from Geneva clearly indiimportance of starting awareness-building on ground r

trade and economy. In a letter addressed to a Deputy Minister for Foreidated 13 December 1988 the Ambassador of Mongolia noted that “… iearly at this stage to apply for an accession to the GATT, but sooner orcountry would have to join it”. It was a challenging a statement.

11. Since then the Mission of Mongolia continued to maintain regular conthe Secretariat of the GATT. The contacts became more frequent folpeaceful democratic revolution and political changes in the countryMongolia started to express explicit interest in acceding to the Agreement

targeted toementationlization ofange rate,ivatizationbasic lawsg system,nd private

lishing state monopoly of foreign trade. Privatization Law and Law on Foreign Investment encouraged business interests and initiatives

aintainedde policy.

nted liberal trade strategy at the national level and identified

8. Alike many other accessions the accession process of Mongolia involved a lot of as economic and geopolitical factors that shaped the

dynam

rest in the ween the

he GATTission in Uruguay

cated theules and provisions of the

GATT, forecasting of possible implications of the results of the UR on country’sgn Affairst might be

later the

tacts withlowing the

in 1990..

12. The Office of the Special Adviser to the Director General played a leading role in advising and assisting Mongolia in initial steps of its application and negotiating process. In 1990, 1991 the first GATT missions visited Mongolia, during which the general seminars on GATT and UR negotiations were organised for governmentofficials and business representatives. The audience was hardly understanding the complex language and concept of the unknown system. The interpreters had

229

difficulties in translating the terms of international trade disciplines. Many of participants, especially business and industry showed little interest in the sthat time they did not realise that the GATT/WTO issues would soorelevant to the country, its economic reforms and rules of business. Tunderlines the importance of these missions as the first activitfamiliarised the government and non-government actors with the GATT.

13. Since 1989 Mongolia was invited to participate in the GATT TraCourses. The first trainee from the Ministry of Foreign Affairs/MFA/ w1990. Mongolia has been benefiting from this training for more thanaround 7-8 officials representing MFA, Ministry of Trade, Customs htrained. The first trainees were directly involved either in Genevaheadquarters in accession work, they made their due contribution. Tpolicy and other short-term courses of the GATT/WTO helped Mongolfirst capacities, accumulate knowledge on international trade policy. UnfLater trainees either did not stay long in the government services or werduties not directly related to the WTO. The issue of efficient use ofassistance in developing national expertise and human resources are oftenthe donor agencies. It is important that the national Government idenselects the right target group, departments, in particular those withresponsibility for the subject. It is not rare that after having invested sufinancial resources and time for training a Government failsaccumulate a pull of national experts to mobilise. In planning andtechnical assistance programmes for training national expertscommitments and responsibility of a beneficiary Government must be ens

14. The Missioapplication, in designing and recommending the policy and actions needed in the country’s accession process. No doubt that the Government in making aapply for accession gave a serious consideration to the recommendatiwatch in Geneva.

15. In 1988-1990 the Mission

es with a particular focus on importance of the integration of the coobal trade and economy. The assessment of the situaendations of the Mission in favour of accession to the GAT

marised, inter alia, as follows:

Á although Mongolia is a centrally-planned economy it is a dcountry by the UN definition. The Contracting Parties/CP/ shave a reason to object against a developing country with a very little

ubject. Atn be veryhe author

ies in Mongolia that

de Policyas sent in14 years,ave beenor at the

hese trade ia to buildortunatelye assigned technical raised by

tifies anda primary

bstantialto sustain or

executingstronger

ured.

n of Mongolia in Geneva had a key role in planning the timing of

decision toons of its

had several contacts with the GATT Director General and his Special Adviser and sent numerous communications to the MFA on GATT issu untry intothe gl tion andrecomm T can besum

evelopinghould not

share in the world trade,Á two big neighbours are still not CP to the GATT, Á GATT differs from the UN system institutions in many aspects. The

acceding country takes binding commitments, the accession processitself involves a big deal of preparatory work, as well as extensive bilateral negotiations with the interested CPs.

230

Á The UR negotiations will expand trading rules to new areas likeinvestment, intellectual propertyeconomic body with a global dimension.

Á It is important to make a timely decision on issues of a memglobal institutions like GATT to accelerate market reforms into develop and expand trade with the GATT CPs. Mongdecisive and courageous internal reforms of open economy..

Á Becoming an observer will help us to familiarise with the business of

particular in human resource development.

16. The messages of the Mission show the vision of global processes, oplaunched reforms and geopolitical consideration of the diplomats in theifor the country’s speedy accession to the GATT. The lack of adequate expertise andresources on GATT/WTO at the headquarters puts a huge burden and reson a diplomatic mission of an applicant country accredited to Geneva. Ofdiplomatic mission of such country that in fact identifies national straactions on accession or multilateral negotiations later being formally endocentral Government.

their permanent access to counselling should be an essential part ofassistance programmes.

17. After three years of intensive correspondence and deliberations betweand the headquarters in June 1991 the Government of Mongolia made dapply for acccession to the GATT. By the letter dated 17 June 1991 addreDirector General of the GATT the Mongolian Ambassador submittedapplication of the Government to accede to the GATT under Article Xrequested the application to be circulated to all CPc and be considered in awith the usual procedures. The response from the Director General cadays, advising Mongolia to hold consultations with the main CPs tosupport for application and inform the Secretariat of the results, on thwhich the application would be put on the agenda of the GATT

support and was assisting the Mission in handling and coordinating aspeedy procedures. Mr.A.Linden visited Mongolia as a special envoDirector General in 1993 during the crucial period of extensive ingathering stage and start of negotiating phase of the country’s accession.

18. Following the advice of the GATT Directestablished procedure the Ambassador of Mongolia in Geneva heldpositive consultations with Ambassadors of US, Brazil, Canada, EEC,Sweden, Swiss, Japan. With none of them Mongolia had substantial tradebut Japan, US, European Communities were starting their donor activities

services,rights. GATT will become a big

bership inMongolia,olia needs

theGATT, to develop technical cooperation in trade-capacity building, in

timism forr advocacy

ponsibilityten it is a

tegies andrsed by a

In this respect support in capacity-building of smalldelegations in Geneva of applicant or newly-acceded countries, setting network of

technical

en Genevaecision to

ssed to thean officialXXIII andccordanceme in ten get broade basis of

Council. The Officeof the Director General, and in particular his Special Adviser Mr.L.Linden gave full

ctions fory of theformation

or General and in accordance with theseries ofThailand,exchange,in support

of the country’s political and economic reforms.

19. On 8 July 1991 the Ambassador of Mongolia sent a letter to the GATT DirectorGeneral informing of the consultations held and requesting to make the necessary arrangements for inclusion of the application of Mongolia in the agenda of the nextCouncil meeting. The GATT Director General in document L/6886 of 17 July 1991

231

announced that the Mongolia’s application would be considered by theits meeting on 8-9 October 1991. It took just

20. The application of Mongolia was put as Agenda item I for Council meon 1 October 1991. The charge d’affairs of the Mission represented thethe meeting. The Governme

tin due to budget constraints.

Á The representative of Mongolia reiterated the wish of the Govaccede to the GATT,with the GATT principles, and briefed the Council on histortaking place in the country.

Á Japan expressed its Government’s support for Mongolia’s pain GATT which would promote the country’s trade and investm

Á The United States welcomed the country’s application and stressed the unprecedented pace of Mongolia’s reforms to transform froplanning to a market-oriented system /Minutes of Councildocument C/M/252 of 4 November 19

Á Support of these world leading economies was noted by the Goas their commitment to continued support and cooperationissues of country’s future development goals.

Á The Council established a WorkMongolia, and granted it an observer status.

Á In January 1995 the WP on accession of Mongolia to the Gwas transformed into a WTO accession WP.

21. Membership of the Working Party included some 25 countries likeAustria, Canada, Czech Republic, EC and its member states, Finland, HoHungary, India, Japan, Korea, Norway, Poland, Sweden, SwitzerlandAmbassador of Austria H.E.Mr.W.Lang was appointed Chairman of thchaired it until he was appointed to his next duties in Brussels in eaAmbassador Lang officially stayed Chairman of the WP until complework. In his absence the WP continued and successfully concluded its wo1996 under the interim chairmanship of the Director of the Accession Dthe WTO Secretariat. Apart from rendering its regular assistance in prerefining documentation for the meetings of the WP, in case of MoAccession Dmediating role in getting consensus and agreement in bilateral a

ular the Accession Division deserved special tribute for their hard word, extra burden and efforts, but this unusual chairmanshipat the final, crucial stages of the accession put a bit of ne

Council at a month to formalise the application

request of Mongolia for consideration by the Council.

eting held country at

nt could not send a capital-based official for this mee g

ernment to informed the familiarization of the Government

ic changes

rticipationent .

m central Meeting,

91/.vernment

on broader

ing Party/WP/ on accession of

ATT 1947

Australia,ng Kong,

, US. Thee WP and rly 1996.

tion of itsrk in Juneivision of

paring andngolia the

ivision, its Director and the Secretary of the WP played an importantnd multilateral talks.

The Secretariat and in particof the WP

rvousness, uncertainty on Mongolian side.

3. POLICY PRIORITIES THAT SHAPED DECISION TO APPLY

22. In making the decision to apply for accession to the GATT the Government of Mongolia was guided, inter alia, by the following policy priorities:

Á to break the legacy of political and economic isolation of the country,

232

Á to take advantage of earlier membership and multilateral mechfuture trade agenda with its two big neighbours that were fMongolia in this process. China’s accession activstalled after Tiananmen Square uprise, Russia didn’t even app

Á to incorporate its interests in the results of the ongoing and future rule-setting negotiations,

Á to accelerate open, market economy reforms, including liberatrade and encouragement of foreign investment, technology,

Á to reduce the dependence on a few markets where centralsystem

Á to enjoy preferential treatment unilaterally offered by

Á to develop trade, cooperation, partnership with leading world ec

23. One can often find and hdeveloping countries do not have any developed policy in place, they cannot negotiate their terms of accession.

look low profile guests. Some countries indeed might have not had wellbusiness plans while applying for accession.

25. One should also notice inflow of applications in 1990s mostly from coof former Soviet Union, including Baltic states, and countries likeBulgaria, Albania, Slovenia, Croatia, FYR of Macedonia. No doubt that tcold war, collapse of th

priorities. By joining influential world institutions like IMF, WB, GATT/primarily sought political and economic support for their independdemocratisation of society.

26. Mongolia was not an exception. In first place it saw political advbecoming a member of the club. Economic assessments were developcourse of the process. Accession process for Mongolia was a part of leatransition to market economy, adjustment to international economic rules.

27. The countries with heavy legacy of different forms of dictatorshipaftermath ofmore sympathy and well- designed negotiating strategies from the sidemembers. Afghanistan, Iraq, Sudan, Somali, North Korea – pendingentrants. Do they have their policies, strategies in place? What entrance feebe asked for? Will they be given an adequate grace period or policy space to adentailed costs?

anism in ar behind

ities were almostly.

lization of

planning and state monopoly of trade were dominating,

developedcountries

onomies.

ear observations and even criticism that somenot and do

24. From the point of view of creators of the rules the new or small countries might-calculated

nstituentsMongolia,he end of

e communist ideological colonialism were crucial factors intheir decision making. They had policy, they had their political agenda and

WTO theyence and

antages of ed in therning and

, or in thelong civil wars, religious and ethnic cleansing should be treated with

of parentor futurewill they

just

28. The above notion, questions are without prejudice to the importance and necessity for any applicant country to have proper policy and structural adjustmentplanning well-before the application is made especially to the commercial institution like the WTO. Trade capacity-building, WTO-related technical assistancefrom bilateral and multilateral agencies significantly increased in volumes and product deliveries over the last decade. Fourteen years ago Mongolia had little of it.

233

Today the applicants are offered enough technical assistance, expertise,WTO. There are even overlaps and competition.natio

4. INFORMATION GATHERING STAGE

29. The first draft of Mongolia’s Memorandum on Foreign Trade Recirculated in January 1992 /document L/6943 of 22 January 1992/. IGovernment some 7-8 months to produce this document. The applicationas mentioned above went sm

questions from the member states.

30. Ministry of Trade and Industry/MTI/ was assigned with responsibhandling accession p

or ign Trade and Treaty and Law Department where core Englishessionals worked.

Á This task was assigned to 4-5 people. None of them had westernbackground nor deep familiarity with the GATT.

Á In the beginning, in particular in drafting Memorandum, the Massisting in translating the assembled documents. There were diffprecise translation of legal and trade terminology. It was revealed later that many questions posed by the CPs in connection with the Memcould have been avoided had the translation been correct. Toexample: a term ‘legal peof countries requested clarification.

Á Until 1996 the Mission in Geneva did not have a trade diplomcontribution in channeling distance advice and assistanceSecretariat was very essential.

Á The line Ministries preoccupied with their own agenda werefurnishing the sectoral information.

Á Fast legal reforms were resulting in introduction of many new lawtranslation of which wlegislation.

Á Technical processing of documents was not supported by efficient office equipment: the staff did not have computers, copying facilities wefax transmissions were expensive, information technology was aexistent until early 1996.

Á No external help was rec

31. Both the Government and the Secretariat expected that Mongolia woua CP to the GATT, that its accession process would not take long and w

training on Has technical assistance helped the

nal Governments to bargain better price?

gime was t took theprocedure

oothly. The real burden for the Government started with compiling and supplying of required information, answering numerous

ilities forrocess in a whole. The MTI mobilised its Department for

F e speakingprof

academic

FA wasiculties in

orandumgive one

rson’ was translated as “justified person”. Number

at, but itsfrom the

slow in

s, Englishas not available. The CPs were requesting the texts of

re limited,lmost non-

eived in drafting and preparing the documents.

ld becomeould not

involve serous difficulties. The Government was not aware of the complexity of theGATT bilateral and multilateral negotiations, the Secretariat was not fully aware ofcomplexity of situation in Mongolia.

32. After the establishment of the WP in October 1991, the first meeting of the WP was expected to take place in less than six months, in March 1992, but

234

Memorandum was made available to the CPs only in late January 1992.April more than 70 questions from the CPs were consolidated by the Secrsent to the Government, with a request to reply by 15

In March,etariat and

ceived by the end of the year, English texts

first timeonth

re. It was, given that they had other

responsibilities to look after. More than 100 questions and answers were exchanged

, licensingelopment,nvestment

Codes etc.her issues

rther examined in the WP. Formulating replies to

binding

ispensablenformationformation

the laterformation.nd variouss is very

s needed well before the application is made Timelyassistance will allow the countries to present the Memorandum shortly after the

e work of

g to the on of the

e Government negotiating group headed by the Minister for Trade and Industry was established. The group included representatives from MFA, Central Bank, Customs, Mission in Geneva and broad representation from the Ministry of Trade and Industry. There were no representation from non-state actors in the group in any capacity/observer, adviseretc./. As mentioned above, at the operational level the daily business was run by trade economists and law experts of the MTI.

th th May. On 5 June answers to 23 questions were submitted to the Secretariat, which were circulated to the CPsin a month time. No more replies were reof some requested laws still were not available.

33. Pending the completeness of requested information the WP met for theonly in June 1993, i.e after 20 months from its establishment. Minimum one mwas needed for answering questions, for a lengthy list it took far moindeed tiring and pressing exercise for people involved

until the first draft of the WP Report was produced in May 1994.

34. The initial questions from the CPs related to state-controlled pricessystem, quantitative restrictions, privatization, private sector devtreatment of private ownership, banking system, exchange rate, foreign iand trade regime, intention of the Government with respect to MTNMore details of laws, regulations, sectoral policies, taxation system and otthat affected trade were fuquestions raised at the WP and drafting the provisions of the WP report required more careful and policy approach since they incorporated futurecommitments for the Government.

35. Data collection and assessment of information are important and indexercise for members and applicants alike. Development of the itechnology, cyber world enormously increased access to broad range of inand speed of information exchange. It certainly greatly facilitatedapplications in many terms, including supply of national data and inNonetheless, assisting countries in drafting and preparing Memorandum aother accession-related documents, in translating laws and regulationessential for countries with limited expertise and administrative resources. This kind of technical assistance i

application and paper processing work will not create undue delays in ththe Working Party as it happened in many instances in case of Mongolia.

5. NEGOTIATING STAGE

36. The Government Action Plan for 1992-1996 put the goal of accedinGATT and actively participating in its activities. By the ResolutiGovernment No 69 of 13 September th

235

37. Mongolia conducted tariff negotiations with 11 countries, including

Á In most cases the inas early as January 1993.

Á Based on series of first bilateral tariff consultations Mongolia tabled its open offer in May 1994 during the 3

Australia,Canada, EU, Japan, Mexico, Finland, Iceland, Norway, Sweden, Switzerland, US.

terested member countries made their initial requests

The offere

net meeting.Á Mongolia offered ceiling binding at 30%, final commitment was agreed

average it took 1,5-2 years to complete tariff negotiations. The shortest were within 1-4

39. uding the US,EU, p

1995.same year,

ed and thents was circulated in January

1996. Negotiations took less than 7 months. uests and

ade in 9 sectors.

40. signing inWashin dlock andacce r

raft of thetarget date of 2 April

for a final meeting of the WP.o chair the

final meeting.pletion of

41. Mo very finalstage.

Á Some major Members objected sooner scheduling of the final meeting as a pressure while there were outstanding multilateral elements. TheSecretariat had to cancel the meeting. Final WP meeting was madepossible after another three months of hectic resolving the heavy pressure requests.

rd WP meeting.incorporated the guidelines of the negotiating positions endorsed by thCabi

at 20%.

38. Inwith Mexico, Canada, and Australia, where agreements were reachedmonths.

Services commitments were negotiated with fewer countries, inclJa an, Canada, Switzerland.

Á Mongolia submitted its initial and revised offers in March, JulyÁ The US was the first to conclude agreement in September the

followed by the EU, Switzerland, Japan, Canada.Á In November 1995 the negotiations on services were complet

consolidated schedule of specific commitme

Á Services negotiations did not involve serious differences. Reqoffers were treated with flexibility and compromise.

Á Commitments were m

In February 1996 tariff negotiations were also completed withgton agreement with the US. It was seen as a break of the dea

le ation of the process.

Á Given the progress made on services negotiations and on the dWP report later in February the Secretariat set the

Á Ambassador W.Lang was expected to arrive from Brussels t

Á In June general elections were to take place in Mongolia. Comaccession process was getting political flavour in Mongolia.

ngolia did not knew that serious circumstances were to arise at this

236

Á The package agreed in Washington contained 7 pages of list oissues, including list of notifications to be submitted at thaccession, information to be supplied and reflected in the repoWP, as well as draft of commitments to be taken byWashington market access agreement was presented to the Secreonly in April after parties reached agreement on Protocol issue

Á Tariff agreement with the US prompted new requests and re-earlier agreed packages. In early April 1996 a Member madeon two products on which it did not expressed and followedinterest since Mongolia tabled its open offer in May 1994. Tshortly reached agreement. Later in April another major Mopened its agreement signethat rates agreed with other members on those products discrim“like” products of that Member.

Á 7 days before the approval of accession by the General CouJuly –National Day of Mongolia the representative of the USto Ambass

would not have a formal WTO relation with Mongoliaaccession.

h WTO language in respect of accession terms is vague. Articleesh Agreement refers to “terms to be agreed” and does not set a tpletion of accession.

the mandatory disciplines of the WTO Agreements, both in vdocuments, information to be supplied before the accession, In later accessions there are

Á Any member may come up with any issue at any stage ofprocess.

Á Successful

multilateral Protocol bindings that may hurdle the process.Á A negotiating member may condition the results of agree

market access accord upon the agreement on certaincommitments.

43. The accession of Mongolia was coJune 1996, and later approved by the General Council on 17

f Protocole time of

rt of theMongolia.

tariats,opening of

a requestsubstantialwo partiesember re-

d a year earlier on two products on the ground inated the

ncil on 11presented

ador of Mongolia decision of the US Government to invoke non-application clause of the WTO Article XIII, meaning that the US

after its

42. T e XII of theMarrak ime framefor com

Á The terms requested by a member/s from an applicant often go beyond olumes of

accession

conclusion of bilateral negotiations does not exclude the right of any member of the WP talks to raise later issues of stringent

d bilateralProtocol

mpleted at the final meeting of WP on 26th

atificationber 1996

anuary 1997. Started withapplication to the GATT Mongolia did not managed to become an original memberof the WTO.

44. Mongolia’s accession involved … formal and … informal WP meetings, and series of bilateral consultations in Geneva and in some of capital cities. Thedifficulties it faced in the accession may by summarised as follows:

th July. With rof the accession agreement by the Mongolian Parliament on 29 DecemMongolia became an official member of the WTO on 29 J

237

Á It lacked resources and adequate capacities to handle the expanse of requested information.

Á Familirisation with the GATT/WTO subjects was limited.Á Full translation of rules was not done until after accession.

barriers prevented public at large, in particular non-state acinvolved in policy and strategy formulation. On the otherbusinesses and NGOs were weak and nascent at the early stacountry’s accession.

Á Being in transitipackage of new laws and regulations requiring national poeconomic consen

Á It had weak negotiating power, sometime political ambitions guided the results of negotiations.

Á Although many of its commitments were supported by parallelreforms and accelerated their pace, the denial of S&D transitiin respect of many provisions of the WTO Agreementdifficulties at implementation stage.

Á In case of former “communist couseem to pursue the policy of tight binding those countries to inrules ensuring irreversible depart from old regime. This mightof their stringent, non-negotiable requests.

Á No substantial WTO specific technical assistance was deliveaccession process. GATcourses and national seminars, assistance of the Secretariamain expertise Mongolia received in its policy planmanagement of th

Languagetors beinghand, theges of the

on to a new economic order Mongolia was developing a litical and

sus.

economicon periods created

ntries” the major WTO negotiatorsternationalbe reason

red in itsT/WTO, UNCTAD, ITC short-term training

t were thening and

e accession.

45. Mongolia’s accession brought it many benefits and challenging tasks. The pace of its political and economic reforms is very impressive. But adjustment costs are certainly an issue for years ahead.

238

Nepal's WTO Accession Negotiations:

aiya B. Mat

1. Introduction

This paper is the outcome of the author's discussion on WTO matters with the NMembers for the WTO Accession Negotiation. The paper tries to identify andpriorities of the government and the support of the technical assistance of the bilator international organizations for its accession to WTO. It argues how WTO memhelp Nepal achieve benefits from greater integration into the world economy, prenhancing dis

embers of the LDCs. The paper further analyses the implications of WTO aepal in its agriculture and poverty redu

ollowing issues.The priorities that the nation identified as important for its WTO accessioprocess by which these priorities were identified.The steps taken by the government to organize and prepare for its participatiaccession negotiations. The ways in which non-state actors werThe principal challenges faced when negotiation with WTO members and wwith the WTO secretariat

¶ade during the WTO acces

¶ The type, extent, and usefulness of any technical assistance received from bilator international organizations.

2. Macroeconomic Scenario

Nepal with a population of 23 million is a landlocked and mountainous country. It has a per capita income of US$240 as of 2003. Agriculture is the main source of iemployment, and accounts for 41% of GDP and more than 80% of employme2003). Tourism is one of the most itotal foreign exchange. Its contribution to the GDP is about 8 per cent. India iimportant trading partner of Nepal. No doubt, trade has been diversified to a greatthese days. Nevertheless, the mountainous topography of the country has becomefor high transportation cost and has created a situation of total dependence on Inand transit facilities with the external world.

The economic structure has undergone a structural change over the decades. The share ofagriculture in GDP has decreased from over 60 per cent two decades ago to aboutat present. The share of industry has increased from 13 per cent to 20 per cent during the same

Lessons for LDCs

(Draft)

Kanh hema

epal's Teamanalyze the eral donorsbership canimarily by

cipline on policymakers, and could be an exemplary model to the non- WTOm ccession of N ction strategy incorporating in particular the f¶ n and the

¶ on in WTO

¶ e involved in the WTO accession. ¶ hen dealing

.The steps taken by the government to prepare for the implementation of commitmentsm sion negotiations.

eral donors

ncome andnt (MoICS,

mportant service sectors contributing about 12% of the s the moster extent inresponsible

dia for trade

40 per cent

period. The economy has become more integrated, as the share of trade in goods and non-factor services has nearly doubled over the past decade to about 50 per cent of GDP, the second highest ratio in South Asia after Sri Lanka (MoICS, 2003).

With the advent of the 1990s Nepal expanded the role of private sector with the inception of stabilization and liberalization policies. The rise in private sector investment has boosted

239

trade. Export earning has been steadily increasing. The economic growthsignificantly. However, the rosy picture of the economy did not last long. Tsituation went on deteriorating while global economic volatility was distinct. Allthe down tern in the Nepalese macroeconomic sector. The week economy has co2002/2003 while price level rose more sharply. Sharp decline in total export has beendiscerned in the fall of export to countries outside India. A week economy is reflereduced demand for private credit having its impact on employment and income haimplication on poverty. Aid disbursement has slowed down. Real GDP has 2001/2002. Agricultural production has not risen due to irregular rainfall.

The incidence of poverty is high in Nepal. The poverty rate is 37 per cent taking ithe international dollar-a-day measure of poverty. Since poverty is basically prevasector, which is no other than agricultural sector, improvement in living standardhas not become possible. This sector has not yet changed from subsistence status tone so that productive employment and income are generated that would benefit the poor mass that ultimately would take care of poverty. Poverty in Nepal is linked predoa shortage of productive land. It is primarily a function of severe population plimited land resources giving rise to frequent food problem. Small and marginal faroperate 90 per cent of 2.7million agricultural holdings and majority of small aenterprises are agro-based (Shakya, 2004). Land ownership is highly skewed. Inabsolute poor, particularly in the Hills, own less than 0.5 ha (above 50%)cent in the Terai (plain land) holds less than 0.3 ha. On the average, a poor rural faland just under 0.5 ha produces grains sufficient to feed the family for less than syear pushing those poor virtually into the sphere of food insecurity (Mathema, 200

It was a challenge for Nepal to promote and sustain her growth. These c

to the WTO accession is a silver lining in Nepal's horizon backedfrom Nepalese abroad. It helped Nepal to maintain a positive level of her current account. In this way, Nepal's membership could help alleviate the state of poverty (Appendix A

3. Institutional Set Up and Mechanism for Policy Coordination

In 1998, Nepal gave the highest priority to coordination among government MiDepartments by establishing a high-level committee to prepare for accession toSecretary at the Ministry of Industry, Commerce and Supplies headed the Cocomprised the Secretaries of the Ministry of Industry, Commerce and Supplies,Law, Ministry of Finance, Ministry of Agriculture, Ministry of Foreign Affairs, aof Tourism and Culture as well as representative of the Nepal Rastra Bank (Central Bank) and the National Planning Commission (NPC). The committee has policy issues to the Government regarding the fields and sectors of the economrelevant to WTO. The main objective of the committee was to represent all line migovernment institutions having a direct link with WTO-related agreements. The obto ensure coordination needed for facilitating negotiation and policy formulationNepal's economy and foreign trade under the WTO regime.

The Ministry of Industry, Commerce and supplies was principally responsible for form

rate rosehe securitythese led to

ntinued in

cted in theving direct

declined in

nto accountlent in ruralof the masso industrial

minantly toressure on

mersnd mediumgeneral, the

, and about 30 permily owing ix months a3).

hallenges could beovercome only by raising production and competitiveness in the world market. Management

by the rising remittances

).

nistries andWTO. Themmittee. It Ministry ofnd Ministry

been responsible for providing y that are

nistries andjective wasconcerning

ulatingand enforcing trade-related policies, including WTO membership. The ministry's major areasof responsibility included the implementation of trade policy, the establishment of bilateral, regional and multilateral trade relations, and the development of capable manpower for internal and external trade enhancement. It was also empowered to conduct surveys of internal and international trade prospects as well as the management of cost-effectivetransportation including the country's multi-modal transit and trade facilitation program.

240

The Department of Commerce handles the registration of trading firms, the issuingand the authorization of goods to be imported or exported. The National Bureau oand Metrology, under the ministr

Another important function of the Ministry is the development of policiesinvestment and technology transfer, industrial promotion and protection, andindustry-related patent and trademark protection. The policy on the supply of esbasic goods as well as the supervision of the market and

coordinated preparations for WTO accession with line ministries.

The Ministry of Finance is closely associated with international trade matters ascustoms duties and taxes, monitors the balance of payments situation, andmonetary and fiscal measures. The Ministry of Agriculture bears the major responfarm productivity, subsidies and support, plant quarantine and food research. The

measures. By including all linecounseling in formulating policies in the area

4. Nepal's Accession Process

The transition from the General Agreement on Trade and Transit (GATT) (19World Trade Organization (WTO) on January 1, 1995 is notably one of the imporof the 20

of licensesf Standards

y, has been designated as an inquiry point regarding the WTO-related technical barriers to trade.

on foreigntrade and

sential andpricing mechanism also come under

the purview of the Ministry. A separate WTO Division within the Ministry has actively

it enforcesimplementssibility for

se activitiesare closely linked with the WTO agreements on agriculture and sanitary and phytosanitary

ministries and agencies, the committee expects to receives that are relevant to the WTO mechanism.

47) to thetant events

g stone thatc globalization in a multilateral

trade regime, particularly for the developing countries such as Nepal. She can benefit from

tunities for

ic policiestion in the

ade sectorcompetitiveed and the

th Plan (1997-2002) set the long-term goal of strengthening the globalization of tation of itse businesst the WTO

cted sectors

ound whenade dispute

has resulted into the establishment of the Working Party for Nepal's membership in GATT. The so-called trade dispute lasted for 15 months and concluded withnew treaties being signed. Hence, the urgency for Nepal to join WTO so as to be protectedunder GATT Article V on transit rights got less prominence and was postponed. The process was resumed only in 1995 as WTO accession under Article XII. In the same year, Nepal got the observer status in the WTO. Nepal converted the GATT membership application tomembership in WTO.

th century in the world economic system. This event is taken as a steppinhas far-reaching implications in the explanation of economi

the growing global integration of trade (both goods and services), that is reflected in thegreater competition with lower cost and higher quality goods. It provides opporreaching the potential inherent in the country's comparative advantage.

After the restoration of democracy in 1990, Nepal's social, political and economhave focused on creating environment conducive to private sector participadevelopment process. Particularly a liberal trade policy was adopted to integrate trin the international economy, attract foreign investment, make domestic productsand diversify trade to generating employment. The pace of reforms continucountry's Ninthe economy through accession to the WTO. The accession effort is the manifestrade liberalization policy thereby ensuring a transparent and predictablenvironment. One of the important reasons for embracing openness, which is whaaims at for economic growth and prosperity, is to infuse competition in the proteof the economy.

Nepal's accession process to the WTO has started formally during the Uruguay RNepal applied for the membership to the GATT on 16 May 1989 following a trwith India which

241

Likewise, the GATT Working Party was transformed into a Working Party on Athe WTO. Subsequently, in accordance with the WTO procedures for accesssubmitted a Memorandum of Foreign Trade Regime in July 1998. The WTOcirculated Nepal's Memorandum on Foreign Trade Regime to the WTO member1998. The questions and comments in respect of Nepal's economic policies, existitrade related property rights (TRIPS) raised by the member countries were foNepal in January 1999. Nepal respoby the WTO members in 1999 and 2000.

The first meeting of the Working Party was held at the WTO Secretariat in GenMay 2000. The Nepalese Team was led by the then Minister of Commerce, Mr. RTamrakar. In response to the development of the First working Party Meesubmitted a schedule of tariff concessions and schedule of initial commitmentssector in July 2000. Mr Mohan Dev Pant, Secretary in the Commerce Ministry, parthe second round of negotiations in Geneva on September 2000 (Nepal Rastra BThe meeting reviewed the market access negotiations in goods and services and dilegislative action pla

institutional and legal framework or provide adequate skilled manpower to canegotiations in her favor.

The endorsement at the Doha Summit on Integrated Framework for Trade RelateAssistance for LDC, (IF) did have a special bearing on Nepal's capacity-bovercoming the existing internal constraints and its ability to negotiate expeditiodevelopment of trade (Tr

several meetings of the Working Party and bilateral negotiations with different mthe WTO. On 11 September the Fifth Ministerial Conference of the WTO apAccession Protocol of Nepal.

Her membership in the WTO was approved at the Cancun, MMeeting in September 2003

ccession toion, Nepalsecretariat

s in Augustng laws andrwarded to

nded to such questions/comments raised on Memorandum

eva on 22am Krishnating, Nepal

on serviceticipated inank, 2002).scussed the

n. The meeting also considered for the necessary technical assistanceneeds of Nepal for accession to the WTO since Nepal was not in a position to prepare an

rry out the

d Technicaluilding forusly in the

ade Promotion Centre, 2003). The accession negotiations lasted for more than a decade. Nepal accomplished her accession negotiations successfully in 2003 after

embers ofproved the

excio WTO Fifth Ministerial47th member of the

global trade regime. Prior to that, Nepal has reduced formal trade barriers in 2002 well belownka where

largely considered to be the core of Nepal's objectiveluding themultilateralstaken andTO reforms

t directly. Itis the Government that participates directly in WTO negotiations. However, business interestsin WTO member countries drive the trade agenda. This is why the Nepalese businesscommunity and other stakeholders cannot afford "rational ignorance" about the multilateraltrading system under WTO in this age of globalization. The scope of WTO has been extended from trade in goods to trade in services and trade-related intellectual property rights. Even the Nepalese business community has begun to understand that the substance of national laws and

194 and paved way for Nepal to become the 1

those of its neighbors in the region World Bank, 2003). No doubt, Sri Laliberalization began in the late 1970s and early 1980s was an exception.

4. Public-Private National Ownership of World Trade Organization

The significance of accession to WTO isof achieving multilaterism and globalization. Initially, the stakeholders (incbusiness community) attached little importance to their involvement in thenegotiations or to the impact of globalization. Clearly, that indicated the miuniformed attitude among Nepalese stakeholders that the national ownership of Wrested only with the government.

It is true that business entities have no status under the provisions of WTO, at leas

194 The chronology of Nepal's accession to WTO is given in annex1.

242

regulations that are directly applicable to their transactions are determined by diffagreements and decisions. Therefore, they have sought more detailed informationchanges in the global trading environment and specific regulatory areas affeinterests. This information caother multilateral trading systems.

However, the situation is changing as stakeholder intervention has increasedduring the latter part of Nepal's accession process to WTO. During the Doha SNepalese delegation included a representative from the business community. Thfirst time that the G

public forums on WTO.

Given the global scenario of globalization and liberalization Nepal cannot keep herthe world economic order. Thus, these priorities have been considered with muchwith the stakeholders, particularly the FNCCI of Nepal (FNCCI's activities on WTOin annex 2) on WTO benefits an

to increase the sense of national ownership among the political parties, in MParliament were briefed on WTO issues.

The three major mechanisms identified for creating national ownership of WTONepal are easier and timely access to WTO information, government-pripartnership and a network among stakeholders. The first mechanism is crucial to ththe Nepale

fully acquainted with applicable and bound tariffs under WTO. Other WTO rulesdirect importance to businessmen include provisions on agreements on agricultureand clothing.

The WTO mechanisms on subsidies, anti-dumping and countervailip osanitary measures, rules of origin,

respective markets. Obviously, the need for an institutionalized government-pripartnership with regard to WTO developments in Nepal has been recognized.

5. Nepal's Rationale to Join the WTO

It was Nepal's conviction that WTO memand efficiency in trading capacity but would also result in the expansion of trade,higher level of growth and enhancement of quality of life of the people in g"Accession Protocol" offers immense opportunities for taking Nepal's gdevelopment processes at a new height and proves a valuable means to fight again the country through market mechanism.

By joining the WTO Nepal hopes to integrate its economy into global mainstreamwould expand its external market beyond its national boundaries. It would help sec

erent WTOabout the

cting theirnnot be acquired without knowledge of the reforms in WTO or

noticeablyummit, theis was the

overnment had taken such a step. The role of business associations andother stakeholders in advocacy has increased by regular interactions and the organization of

aloof fromdiscussionare given

d costs. In the initial stage, non-concern on WTO was expressed from many quarters in the civil societies with deliberations against WTO. In order

arch 2001

reforms invate sectore efforts of

se business community to prepare business strategies and stay tuned to the futureregulations on market access. For example, it is necessary for the business community to be

that are of and textiles

ng measures, sanitary and hyt and trade-related aspects of intellectual property

rights will also have a major impact on the competitive position of Nepalese traders in the vate sector

bership would not only enhance her effectivenessleading to aeneral. Therowth andinst poverty

whereby it ure market

for export of its merchandise having its comparative advantage. Nepal's entry to the WTO would maintain policy stability, which is a sin qua non to attracting foreign investment. In the mean time, it provides ample opportunity to strengthen domestic (private) institutions with the institutionalization of trade/transit rights that would bring benefits from fair trade rules.Moreover, it would enhance the competitive capability of the Nepalese producers in theinternational market since there is ample opportunity to benefit from member driven rulesthan the power based ones. The general conviction is that the WTO membership would be

243

important for Nepal’s development and integration into the world trading systemalso constitute a major step forward in the WTO evo

Nepal has the advantage of service export since the neighboring countries can cowith investment plants in manufacturing sectors such as garment and carpets thaaccess to the world market. Such facilities are not available to countries like IndiaThat is, Nepal would benefit from strategic location between her largest and fast growing

special and differential treatment.

Accordingly, Nepal can give the benefit of protection to domestic producersflexibility, protection to national service providers with domestic regulation andcommitments, safeguard infant and small business entities from permitted subsafeguard from unilateral decisions of trading partners. In the mean time, Nepal's mto WTO makes her possible for expansion of her trading opportunities wherebysecure a share in the gro

people by ensuring higher level of employment and a large and steady growin

6. Nepal's Priorities and Strategies to the WTO Accession Negotiat

At the domestic front, the government constituted a high-level Coordination Committeeheaded by the Secretary of Ministry of Commerce with a view to preparing docaccession negotiation and to effect policy reform compatible with the WTO princCommittee endeavored to build consensus on Nepal's membership to the WTO.

Nepal has fixed its priorities on the basis of its domestic capabilities and developmin terms of tariff in the process of accession negotiations Shrestha, (2003agricultural economy does not allow her to compromise in any ways that wouldher agriculture, handicrafts and infant industry fronts. Thus, Nepal has manesufficient rooms in fixing tariff in trade-in- goods, particularly in agriculturaindustrial products such as cement and

commitments on services with reasonable transition period and has retained tpositive discrimination of WTO. Further, Nepal has given special considerationopenings for FDI, infrastructure and areas of external dependence keeping in mindshift and trend among neighboring countries.

apabilities to compete in the expanded world market by exploring post accessiomplementation of its pledge in the world body. Taking into consideration theosition of Nepal in the internationamportant strategies in the process of accession negotiati

Nepal's ability to comply with the WTO requirements as a baseline for thenegotiati

and wouldlution to achieving the goal of

universality and representation of the interests of all trading nations.

me forward t have easyand China.

neighboring economies. She enjoys the benefit of positive discrimination with respect to

with tariffconditionalsidies andembership she could

wth in international trade commensurate with the needs of hereconomic development. Thus, Nepal can ensure to raising the standards of living of her

g volume of realincome and effective demand.

ions

uments foriples. The

ent needs). Nepal'sjeopardizeuvered forl products,

POL (petroleum products) expressing her commitments with future flexibility in policy regime. It has reserved the conditional

he right tofor servicethe policy

Nepal became convinced that she had to be a part of WTO but has to develop her domesticc ni vulnerablep l trade regime, Nepal had adopted the following i ons.¶ accession

ons.¶ Nepal's development needs to the forefront in the accession negotiations ¶ Acknowledgement of the assessment of the trade policy regime as one of the areas of the

negotiations.¶ Exploration of the possibilities for flexibility on tariff ceiling ¶ Consideration of its lack of comparative advantage on opening the service sector for

foreigners.

244

¶ rimination.veloping country, she needed to be

¶ ime of herot only beg countries

¶ ,farmers' right and intellectual property rights since Nepal could not compromise with

rise to twof the global politics inty needing

Nepal haseneration.

e arithmeticO is a tool of free and fair trade

at par with taking the

n terms of economic andinstitutional capabilities, and potential opportunities manifested in likely benefits and costs

the accession negotiation with respect to non-licated andsistency in

it lacked

f negotiations and Working Party meet for Nepal's accession to the WTO of bilateralut bilaterald, Canada,t during the

queries and clarifications inccess (Thef from the

further asked Nepal for her full commitment on wider services, adoption of chemicalharmonization (acceptance of international standards, equivalence and mutual recognition)and revision of non-WTO compatible (regional trade agreements) RTAs.

After necessary revisions, Nepal communicated her offer to the negotiating countries. The revision has been made especially in two fronts, including binding tariff and opening up of

Advocacy for accession negotiation on commitments based on positive discNepal put forth the case that Nepal being a least degranted the facility of positive discrimination within the WTO. Consideration for the concerns of regional trade and the changing trade regneighbors. Nepal expressed the view that her accession process should nperceived globally but also regionally. The policy changes in the neighborinand their attitude in trade would exert profound impact on Nepal. Nepal decided not to commit on some ongoing issues such as agriculture subsidy

such issues given the agro-based economy of the country.

Nepal finds herself in a serious state of complexity and responsibility givingspecific issues. The first is the fulfillment of the state's commitments as member ocommunity and the other one is her internal problem on account of the insurgencythe country. The government has the obligation to maintain peace and securifurther expanded expenditure while it has to take into account the liabilities associated withthe losses of banking sector and worn out public enterprises. Accordingly,excessively to depend on tariffs and other duties and charges (ODCs) for revenue g

The vulnerability of risk from being non-member of WTO is more severe than thprofits and losses from being a member of WTO. The WTbased on rules designed by free world. Therefore, Nepal cannot but has walkedother countries as a member of international community. A lesson can be learnt byinstance of China, a socialist country is now a member of the WTO.

Nepal brought to the fore the inherent national constraints i

with due consideration as a LDC.

7. Nepal's Bilateral Negotiations with the Member Countries

Nepal has to face multiple challenges during existence of accession criteria, discriminatory terms to accede in terms of comptime consuming frame. It was basically one-way negotiation with much inconbilateral and multilateral negotiations. There was no business advocacy andinformation gap to a greater extent.

The third round otook up the issues that was deferred or remained unsolved during the second roundand multilateral negotiations that were held in September 2003. Nepal carried onegotiations with the European Union, Japan, Australia, Malaysia, New ZealanIndia, Sri Lanka and the United States. However, other countries were also presenWorking Party meet.

The negotiating countries then have raised a number ofsystematic issues and sought broader and deeper commitments to market aKathmandu Post, 2003). The member countries wanted Nepal to negotiate tarifapplied level and wanted to reduce applied level on products of commercial interest. They

245

service sector globally. However, the negotiating countries had raised objectiodifference in the binding tariff proposed by Nepal. Likewise, the WTO member coalso asked Nepal to open up service sectors, against the initial offer of only thscaled down the binding tariff offer to other to some extent. She has sent a liservice sub-sectors on which she is to negotiate. The negotiating countries have ato abide by a numberleast developed countries.

During the last round of negotiations, Nepal showed greater flexibility in the bindilines, although it has struck to its commitment to bind agriculture tariffs at highethose being applied. Nepal was assertive that notwithstanding a difficult ecopolitical environment she had sought to systematically reform and open its econGovernment had liberalized the economy unilaterally over the years because of thethat economic reform and trade liberalization would

general framework of equity, participatio

8. Technical Assistance from UNDP

On the external front, the governmenUNCTAD. It raised her voice at different LDC and SAARC forum briefing tpartners. Moreover, she lobbied through diplomatic representatives for assistancebuilding in the accession negotiation process.

USAID, the DFID and the European Union have shown their willingness to providassistance. To build her technical capability, Nepal received technical assistanceon Custom administration, on TBT and SPS from EU and on TRIPS from Australi

During the initial stage of preparing for accession, Nepal received assistance frompreparing a country Memorandum on Foreign Trade. The project for Nepal's aWTO commenced with UNDP assistance in July 1999. The Project has been coordithe WTO cell at th

economy. It has also examined the WTO Agreements on SPS, TRIPS and servwell as domestic legislation related to the WTO system. The United Nations CoTrade and Development (UNCTAD) is the executing agency, and MOIimplementing agency.

The UNDP assistance program has concentrated on helping the govern

requirements and substantive requests from members of the working party. Moviimmediate support for negotiations, there is a pressing need for technical assifuture implementation of WTO agreements. Successful implementation of WTOules (such as those required by the SPS or TRIPS Agreements, for example) wouilding different types of capacity than what is needed to conduct negotiations.

n over the untries hadree. Nepal

st of 25-30sked Nepal

of agreements, which are not mandated by the WTO to be imposed on

ng of tariffr rates thannomic andomy. Theconviction

attract investments, promotedevelopment and, contribute to generate productive employment and alleviate poverty, in a

n and market-based efficiency.

t sought technical and other assistance from UNDP,o key trade for capacity

Following the approval of Nepal’s accession to the WTO, many donor agencies including thee technicalfrom USA

a.

UNDP inccession tonated with

e Ministry of Industry, Commerce and Supply (MoICS). It has tried tocreate awareness of the implications of WTO on Nepal's various specialized sectors of the

ice trade asnference onCS is the

ment work through theaccession negotiations, addressing the challenging tasks of responding to both WTO reporting

ng beyondstance with

regulatoryr uld requireb

Intensification of private sector involvement in business interactions and institutional mechanism in preparation for WTO accession and the feeling of national ownership are theresults of this project The Project helped in the followings:¶ Preparing technical documents for submission to the WTO, including the Memorandum

on Foreign Trade Regime, Questions and Answers on the MTR, Legislative Action Plan, and numerous other documents in the prescribed WTO format,

246

¶¶ Promoting public awareness about WTO membership.

9. Nepal's Accession Protocol: Strengths and Weakness

ip in 1989.

he same.

nex 3 for2003. The

traints andber of

straints, thefully.

n goods. Itabove the

directly or mitted herself to bind the tariff at 51 per

date of accession subject to gradual lowering down to 42 per cent. Nepal has the flexibility in industrial products as well. It is 39 per cent at the date of

Accessions of Nepal.

merchandise goods, farm products, services and intellectual property rights isMarrakeshme able to

t-developed

ssistance toMembers

ementation

iii. Protection of Farmers' Interest: Nepal has negotiated to undertake necessary steps topromote export on agricultural commodities such as lentils, Niger seeds, tea and coffee,ginger, cardamom, vegetable seeds, flower, silk and silk products, medicinal herbs, fruits etc. Similarly, Nepal has negotiated to provide assistance to agricultural producers through various government programs in areas such as general research, extension services, marketingand promotion activities. These activities include agricultural market information, natural

Conducting seminars for MoICS staff, and

Nepal came up with a comprehensive document, the document of Memorandum of ForeignTrade Regime (MFTR) in 1998 after lodging application for the WTO membershThe document includes legal provisions regarding trade, economic policies, institutional structure for the implementation, delivery mechanism and mandate and process of t

Nepal's fourteen years of endeavor towards the accession negotiation (see anoverview of terms of accession) to the WTO was happily culminated in Septemberentire negotiating process was accomplished by a small team with many consproblems, which are discerned in lack of adequate baseline studies, sufficient numexpertise, and strong institutional mechanisms fraught with volatile political scenario in thecountry. It is a complete satisfaction on the part of Nepal that despite all those conNepalese team had skillfully negotiated with the international communities success

The Accession Protocol consists of two schedules. First, it is tariff commitment oincludes Nepal's commitments not to raise tariffs on certain commodities in futureagreed ceiling line. Given the fact that nearly 81 per cent of the populationindirectly depends upon agriculture, Nepal has comcent on themaintainedaccession subject to reduction at 24 per cent in the long run.

A: Strengths

i. Promotion of the Trade Needs of Nepal: One of the major strengths of theProtocol is that it has incorporated concerns for promotion of the trade needNegotiation on based on the utilization of the flexibilities provided by article XI.2 of theAgreement establishing WTO.¶ In this context, the Accession Protocol has becoincorporate the special and differential treatments that Nepal deserved as a leascountry.

ii. Technical Assistance: Nepal has been successful to negotiating for technical aimplement the GATT 1994, GATS and TRIPs commitments in time. The WTOhave also expressed their interest to work with Nepal to meet the timeline of implof the WTO Agreements.

¶Article Xi.2 of the Marrakesh Agreement Establishing the World Trade Organization provides, "The least -

developed countries recognized as such by the United Nations will only be requested to undertake commitmentsand concessions to the extent consistent with their individual development, financial and trade needs or their administrative and institutional capabilities".

247

disaster relief through crop subsidies, loans and grants for irrigation and other infsupport for small farmers, urea transport subsidies for remote areas, subsidpromotion and diary development grants. Nepal has been able to negotiate fomeasures of supports (AMS) as the de minimis 10 percentage. Similarly, Nepal didInternational Convention for the Protection of New Varities of Plant (UPOVnegotiated to look at UPOV in terms of national interest and explore the possibilitin the future, only as appropriate. Tprotecting the interest of Nepalese farmers.

iv. Promotion of FDI and Transfer of Technology: The Accession Protocol is aregarding promotion of foreign investment in Nepal. The most conspicuous aspeNepal has committed to provide effective protection and enforcement of intellectual property rights. She opened services in eleven important sectors and seventy-five sub-secommitments to develop or amend existinggoods and commitment for non-discriminatory treatment that are foundations forof foreign investment and transfer of technology.

v. Faci

from non-discriminatory, transparent and predictable market access in the WTcountries.

vi. Enhancement of Participation in Multilateral Negotiations: The mostachievement or strength of the negotiation is tin different councils, committees and bodies within the WTO. Such opportunitforum for trade negotiations and articulation of Nepal's interests to promote its traparticipating in multilateral trade norms and rules.

vii. Telements for promotion of trade and realize access in international markets. The AccProtocol is a " trade constitution" for Nepal, As a result Nepal cannot deviate fromagreed, which enhance transparency and stability in legal, policy and administrativNepal.

viii. Balances Between MEA s and WTO: The Accession Protocol is also a bebalancing Nepal's obligations arising from Multilateral Enviroobligation arrestriction to

Nepal has made commitments only to the mandatory provisions of the WTOminimum requirement for any country to become a Member of the WTO.

B. Weaknesses

i. Minimum Support by Baseline Studies: The whole negotiation process wasbased on personal efforts, knowledge, and information of the negotiators exceplimited studies regarding Nepal's position on negotiation. There was a strikinobjective research and studies, which would provide justification to realize concessions an

rastructureies for tea r aggregate

not accept) but only

y of joininghese outcomes of the negotiation are very important in

benchmarkcts are that

ctors, withlegislation to create better trading environment on

promotion

litation of Environment for Trading Opportunities: The negotiation has opened avenues for private sectors to be competitive and efficient to capture the opportunities arising

O Member

significanthat it has opened opportunities for participation

ies providede through

ransparency and Policy Stability: Transparency and stability in trade policy are keyession

the termse system of

nchmark in nmental Agreements and the

ising from the WTO. For example, Nepal has negotiated that it imposes trade fulfil the obligations arising from the different MEAs to which Nepal is a party.

, which is

carried outt few andg lack of

dfacilities that Nepal had sought during the negotiation process.

ii. Small Negotiating Team: A small team had carried out the negotiation for WTO accession. The ream was responsible for all the activities such as preparation of necessarydocuments, collection of data, catering for information, defending Nepal's position, responding the concern and demands of negotiating countries, share information and solicit

248

concerns of different stakeholders, respond the concerns and deman

iii. Conditions of Initial Negotiating Rights: The Accession Protocol has bounuse balance of payment meprotect trade interests of Nepal.

iv. Limitation on Right Granted by the AoA: Article 15.2 of the Agreement onensures LDC members that they are not required undertaking any reduction coDespite this mandatory provision, Nepal had to undertake reduction commitmenagriculture development fee and is required to eliminate it between two to ten yearNepal haagriculture sector at the existing level that needs to limit the rights of Nepal under Article 15.of the AoA.

v. Inadequate Support by Private Sector and Civil Society: Civil society and prcould not sufficiently help the accession negotiation through producing in-depth rstudies equally, to certain degree they were skeptical and less enthusiast. Hadadequate support from them the negotiation process wouldskilful to preserve concessions, facilities and rihad unsuccessfully arguto lack of research based support from private sector and civil society.

vii. Long Gestation Period

accomplished only in 14 years period.

10. Impact of World Trade Organization Membership

The accession of Nepal tdevelopment of the country. The benefits an

obligations to, market access, erosion of preferences, risks posed by technical barrability to defend trade interests.

a. Market Access Opportunities and Obligations

The commitment made by the developed countries regarding market access for imthe Uruguay Round matters to Nepal, considering the export product compositionbeen a structural change in Nepal's export product composition from primary products to manufactured goods (annex 4). Those products are directed mainly towards thecountries such as the United States and the European Union. This is chiefly becausensured more secure and open mareached during WTO negotiations. The main features of market access commitments bycountries include the expansion of tariff bindings to 99 per cent of imports and thof the trade-weighted average tariff. It is estimated that once the agreed tariff redubeen fully implemented, the proportion of merchandise imports entering un

ds of civil society insidethe country, trading off with the interests and demands of negotiating countries.

d Nepal toasures under section 3 of the Export/ Import (control) Act, 1957 to

Agriculturemmitments.t regardings. Similarly

d to take commitments regarding domestic support and export subsidies in the2

ivate sectoresearch andthere been

have been more articulate andghts of Nepal. For example, the negotiators

ed for 60 percent average bound tariff rates on farm products owing

The negotiation process for Nepal was very lengthy, cumbersome and taxing as it was

o WTO will result in both benefits and costs to the economicd costs of WTO membership can be observed vis-

a-vis Nepal's policy reform and trading environment as well as opportunities for, and iers and the

ports under. There has

developede they have

rkets for LDC exports under various understandings these

e reductionctions have

der the preferential market access will increase in the United States, the European Union and Japan,all important markets for Nepalese exports.

Nepalese exporters have also been provided with an equal opportunity to increase their sharein the global market as a result of WTO commitments. Nepal is concerned more about the assurance by developed countries of expanded duty-free access of industrial imports from thedeveloping countries, and particularly from LDCs. Considering the features of market access

249

commitments, WTO membership should provide Nepal an opportunity to aim fexternal trade

The tariff binding commitments that Nepal has to make as an obligation are impocountry's imports and industrial development. Tariff bindings will give security toand domestic industries, ensuring stable prices of imported raw materials havinimplication to the government by way of custom duties. (Annex 5). That wfacilitating price determination by Nepalese industries. WTO rules that seek imallowed in without further restrictions after payment of duties, and the obligatiothat other national regulations applied at the border conform to the uniform rules lathe adomestic industries are able to imprices.

b. Trade in Textiles and Clothing

The WTO rules have made trade in textiles and clothing liberalized which thecountries and LDCs considered being an important market access commitment mdeveloped countries. Regarding textiles and clothing, poorer countries are expectefrom changes in trade flows, investment and the location of production inducedprovision. The effect of new arrangements in textiles and clothing can be obsrespect to the two groups of countries. Some countries will realize the benefit immfrom the new provision as they have a access has been tightly restricted by the MFA. On the other hand, there are countribeen induced by MFA restrictions to enter the global trade in textiles and clothipossessing a true comparative advantage.

Nepal belongs to the second category. Thus, the liberalized market under the WTOis making it difficult for Nepal to adjust. Theemployment, investment andNepal to form an alliance among the second group of textiles and in order to defend their interests. It is also important to realize that Nepal cannopost-MFA adjustment problem by remaining outside WTO.

c. Provisions in Agriculture Trade

Nepal's membership in WTO can be pressed from the point of view of the potentiaof agricultural production and trade. Under the Uruguay Round negotiations, WTOconsented to liberalize farm trade by making commitments to reduce borderincluding the assurance of discouraging trade distorting agricultural subsidies and gsupport. Accordingly, they agreed to reduce tariffs, substitute non-tariff bartariffication (calculating tariff equivalents of non-tariff import barriers, adding thtariff), and cut subsidies and government support

or a stablepolicy strategy with the combined objective of comparative advantage and

competitive edge.

rtant to theimporters

g revenueill help inports to be n to ensure id down by

greements, will facilitate imports. These provisions will guarantee that importers andport materials without delay and at the most competitive

developingade by the

d to benefitby the new erved with

ediatelystrong comparative advantage and whose market

es that haveng without

provisionsituation has been threatening Nepal's

trade positions. In this case, membership in WTO can helpclothing exporting countries

t avoid the

l promotionmembers

protection,overnment

riers underem to fixed

xpected to benefit from these provisions in two ways. First, it will gain increased market access opportunities for farmproducts. Second, it will be given an opportunity to enhance farm output by controllingimports because Nepal, as an LDC, is exempt from commitments to liberalize agriculture by reducing export subsidies and government support. Nepal will have a chance to expand itsIndia concentrated agricultural export (almost 80 % of all agricultural imports into Nepal arefrom India and over 85 % of Nepal's agro-exports are directed to India).

¶. Nepal is e

¶ Nepal's agricultural bound tariff is at 51 % to be reduced to 42 % by 2006

250

Nepalese traders can benefit under the changed global farm trade situation onlyvalue to their products by processing and good grading. Nonetheless, this willapplication of core scientific post-harvest and processing technology and practiNepal's agriculture sector currently lacks. It is, therefore, necessary for Nepalagricultural production by surmounting supply constraints in order to gain fullchanges brought about by new rules in the global agricultural trade. However, thtariff esproducts.

d. Services Sector Offer

As part of the next market access commitment, Nepal needs to open up its servicassuring non-discriminatory and national treatment to Foreign Service suppliers.offered a number of sectors including business services (including professional scomputers), financial services, telecommunications, health services, tourismtransport, educational services, and construction and engineering. It requires Ntransparent and to establish an "inquiry point" as an obligation. It is widely realiliberalizing the services sector, manufacturing sectors can benefit from efficiindustries that can provide the required inputs. Thus, Nepal is expected to benelower input cost in its manufacturing and agricultural industries as a result of liberservices sector. Even though this will pose stiff competition for domestic supplcreate healthy competition and result in higher quality and lower cost ser(transportation, telecommunications, financing, and professionalimportant to Nepalese

potential impact on domestic employment and the balance of payments situation.

e. Erosion of Preferences

One of the issues that concerns Nepal regarding the effect of tariff reduction aaccess commitment is the erosion of preferences. Nepal enjoys preferential maunder Generalized System of Preference (GSP) for almost two-thirds ofcommodities, and almost every major importing country grants GSP treatmenHowever, Nepal expects to benefit only marginally from a reduction in tariffs andbarriers mainly because of two reasons. First, Nepal is concerned about the lopreferences as MFN rates fall. Second, the net gain from GSP benefit to Nepal isbecause the industrialized nations are reluctant to give complete duty free accessproducts, including Nepalemost from the European Union's "Everything but Arms" (EBA) scheme. The EBAattractive to Nepal for two reasons (i) the scheme includes all products of interestby Nepal, and (ii) it provides the facility of derogation from the European Union's GSPof origin for Nepalese apparel. These provisions provide Nepal with many oppoincrease the export growth rate.

However, the GSP scheme has some limitations that Nepal should take into coThe GSP scheme is discretionary in application. It does not guarantee marpreference without some uncertaintyscheme often excludes sensitive items tha

if they add require theces, whichto enhancey from the e policy of

calation in developed countries may hinder Nepal's potential to export processed farm

e sector byNepal has

ervices and and travel,epal to be

zed that byent servicefit from aalizing the

iers, it willvice inputs

services), which aremanufacturers in becoming price, quality and delivery competitive.

However, Nepal needs to be cautious in wider liberalization of the services sector due to the

s a marketrket accessits export

t to Nepal.other tradess of tariffstill trivialto all LDC

se exports. Based on export volume and simplicity, Nepal benefitsscheme isfor export

rules rtunities to

nsideration.ket access

, as it is unbound and unilateral. For example, the GSP t are exported by Nepal, including textile items,

apparel and agricultural products. It is also understood that GSP is conditional, seeking socialor political compliance, such as respecting core labor standards and environmental labeling.Sometimes GSP eligibility is based on strict rules of origin criteria, such as with textiles andclothing. Unlike the bound MFN tariffs, the GSP scheme can be withdrawn unilaterallywithout tendering any justification.

f. Challenges of Countering Technical Barriers

251

Nepalese exports are frequently impeded by the increasing use of environmental protectionmeasurers, other social clauses and growing consumer sensitivity to foodinternational markets. As with many developing natithese measurers to be protectionist and discriminatory devices.

It is important to perceive that the WTO provisions allow member countries to denforce measures to protect human and plant health under the SPS Agreemenprovisions regarding the application of product quality labeling requirements undAgreement. Nepalese traders are unaccustomed to these measures, which aintended to reduce the risk of technica

the use of sanitary and technical regulations.

Nepal has enacted several laws with respect to the protection of human, animal anas well as laws on producthe prevailing laws need to be amended or new laws enacted

11. Benefits and Costs of Respecting Intellectual Property Rights

The TRIPs Agreement is one contentious issue with regard to Nepal's accession toeconomic arguments in favor of TRIPs for Nepal have been based upon the incrflows and transfer of technology and FDI. It is believed that TRIPs will lead tvolume of trade, particularly "high-technology" trade. Proponents also believe tcompliance with TRIPs, which will guarantee the protection of intellectual properencourage the transfer of technolo

substitution of trade for investment. However, Nepal needs to make substantial chlegislative and enforcement mechanism, including an institutional set-up with inand skilled manpower, which Nepal lacks.

Although Nepal's IP laws do not cover all areas of TRIPs, the existing legislatilaws on patent, design and trademark, and copyright protection. Nepal needs to delaws on IP related to geographical indications, layout/designs of integrated circuprotection of undisclosed information. This requires a huge financial and huminvestment. Upon Nepal's accession ttechnology and financial assistthe protection and enforcement of intellectual property rights (IPRs) and the pretheir abuse. The developed member countries can also provide support for the esor reinforcement of relevant domestic offices and agencies in addition to training pe

12. Defending Trade Interests

As mentioned elsewhere above, Nepal is not in a position to defend itself aunilateral action taken by its trading partners over its exports. Consequently, itborder regulations and has to comply with uncompromising buyers' requirem

safety inons, Nepalese exporters also consider

evelop andt, and the

er the TBTre actually

l barriers and facilitate international trade. They should understand that the SPS and TBT Agreements are there to defend their rights and interests in

d plant lifet standards in the interest of public health and security. However,

so that they are in conformitywith the SPS and TBT rules.

WTO. Theeased tradeo a higherhat Nepal'sty (IP), will

gy and foreign investment. It is also believed that the improvement in IP protection in international trade transactions could result in some

anges in itsfrastructure

on includesvelop otherits, and the

an resourceso WTO, the developed member countries can make

ance available for the preparation of domestic legislation onvention of

tablishmentrsonnel.

gainst anyfaces strictents, most

notably environmental and social clauses, that are imposed arbitrarily. This has posed aserious threat to the ability of Nepal to develop sectors that have a comparative advantage.There is also a possibility that Nepal will face discriminatory anti-dumping and safeguardmeasures as its exports to importing countries increase. When considering such a vulnerable situation, the only option open to Nepal is the internationally acceptable contingency measurewithin the WTO framework. Nepal can benefit from the WTO provisions on safeguards

252

intended to protect domestic industries against a surg

The measures that Nepal could apply, within the purview of WTO, are higquantitative restrictions, anti-dumping duties and countervailing duties. If Nepalface such actions in importing countries, the cases can be challenged by the DSBdefend trade interests. To be able to exercise its rights and defend itself against suNepal needs to make some preparations such as national legislation regarding safeguards, countervailing duties and anti-dumping measures in order to be able to face upractices. The other obligations may be the presentation of technical and legal argustrict compliance with procedures within specific and usually short timeGovernment may be required to assist the private sector in exercising trade rights by providing the compilation of infNe al can have access tom ber countries' exports

13. Social Repercussions

It is equally important for Nepal to assess membership in WTO with reference tand other sectors in the country. The social aspects of WTO membership are often oin Nepthe point of view of comparative advantage, Nepal can expect an increased flowinvestment and technology, more employment opportunities and greater geincome.

When acknowledging these benefits, it is also necessary to evaluate the direct aimplications for the social sector, particularly with respect to workers, deprivedrural development. WTO membership is intended to give security to goods andwell as investment traded at the international level. As international competitionimportant factor, the Nepalese economy will become capital-oriented, and laboproduction methods will be downgraded. It will thus be imperative to considnegative effects on employment opportunities. Equally important, consideratiogiven to the displacement of sma

country. Nepal is a rural-based economy that contributes significantlmajority of the population. With the country's adherence todanger of isolating the rural economy.

14. Macroeconomic Policy Reform and Stable Trade Relations

Since the beginning of the 1990s, Nepal has pursued trade and investment libHowever, the bilateral relationship with India has policy reform and trading environmental, as the former dominates the latter in ovolume (annex 4). In addition, Nepal's trade with third countries is based on armade in the bilateral transit agreement with India. Nepal has to give importance to th

e in imports that result in balance ofpayments difficulties and a threat or damage to those industries.

her tariffs,ese exportsin order toch actions,

nfair tradements, and

limits. The

ormation, data collection, and the preparation of arguments.p the WTO committees ensuring information on actions affecting

em and rights.

o the socialverlooked

al. It may be because the WTO system is directly related to the country's trade. From of foreign

neration of

nd indirectpeople andservices as

becomes anr-intensive

er possiblen must be

ll and indigenous raw material-based industries, affecting therural employment and income situation. As domestic market prices rise, the cost of living may become intolerable for many people, thus exacerbating the extent of poverty in the

y to the livelihood of the the WTO mechanism, there is a

eralization.a special bearing on Nepal's economic

verall traderangements

ebilateral trade relationship with India, vis-a-vis its commitment to the regional andmultilateral trade relationships. Thus, membership in WTO is expected to provide stabilityand predictability in Nepal's external trade regime.

It will ultimately help to divert exports and attract FDI. This is possible only through theWTO system, which combines reciprocal market access and negotiation based on the MFN

253

(most f

By joining the WTO, Nepal can now fully enjoy the rights that all members havWTO agreements, such as non-discthe WTO’s dispute settlement procedure.

Nepal accepted an average tariff binding of 42% in agricultural products and aroindustrial goods. The majority of the import items fall in the customs duty

goods schedule. A minimum tari

15. Legislative Plan of Action

i. Regulatory Reforms: Nepal has also committed to a timetable of legislatirequired to comply with WTO rules on trade-related domestic regulations, such as the

Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT)agreed to the following legislative plan of Actions

ii. Customs: Legislation on the valuation of imports for customs and tconforming to the requirements of the Agreement on Customs Valuation would be1 July 2004. Nepal would progressively implement the Agreement on Customs Vaccordance with the action plan and full implementation will start from

iii. Sanitary and Phytosanitary Measures: Nepal will implement fully the provisAgreement on Sanitary and Phytosanitary Measures by 1 January 2007.

iv. Technical Barriers to Trade: Nepal will progressively implement the AgreemTechnical Barriers to Trade in accordance with the Action Plan submittednegotiations and would implement fully the provisions of the Agreement onBarriers to Trade by 1 January 2007.

Nepal is preparing the new Industrial Property (Protection) Act, which would incthe substantive provisions of the TRIPS Agreement. It would cover all categories of industrial property and would incorporate the basis for an adequate enforcement and be promlater than 1 January 2006.

vi. Tariffs Bindings:an average tariff binding of 42 percent on agricultural products and around 24industrial goods. The majority of the import items fall in the customs duty rangpercent. The maximum tariff rate of 130 percent applied to cars and jeeps will bespecified in the goods schedule. A minimum tariff rate up to 5 percent will bedaily consumption items.

avored nation) clause and national treatment, both based on the non-discriminationprinciple.

e under therimination by other WTO members and the ability to use

und 24% inrange of 10–20%.

The maximum tariff rate of 130% applied to cars and jeeps will be reduced as specified in the ff rate up to 5% applied for daily consumption items.

ve reforms

Agreements on Trade-related Intellectual Property Rights (TRIPs), Customs Valuation, . Nepal has

axation purposesenacted byaluation in

1 January 2007.

ions of the

ent onduring theTechnical

v. Trade-Related Intellectual Property Rights (TRIPS): As a least-developed country, orporate all

ulgated no

During the course of multilateral trade negotiations, Nepal negotiatedpercent one of 10-20reduced as

applied on

accession

negotiations involved what the WTO refers to as “other duties and charges,”

which are simply trade taxes specified outside the scheduled of ordinary customs

duties. Nepal had no ODCs in 1998, when it submitted its Memorandum on the

Foreign Trade Regime. In the last two years HMGN introduced a number of new

vii. Other duties and Charges: One key issue during later stages of

254

import surcharges to finance domestic security and local development programs.

The emerging practice on WTO accession negotiations is on acceding countries

to bind ODCs at zero, i.e., to commit not to applying any ODCs at all. I

goods offer Nepal agreed to eliminate its ODCs over a period lasting fr

ten years, depending on the tariff line. The country also pledged not to

new ODCs. Replacing existing import surcharges with more broadly b

will increase economic welfare in the long

viii. Service: As a result of the negotiations, Nepal agreed broad comm

11 services sectors, such as business, communication, construction, e

environmental, and certain categories of financial services, health, tou

transport. Most of Nepal's commitments relate to liberalization in cro

supply of services (called Mode 1), consumption of services abroad (Mod

with some restrictions, on foreign commercial presence (Mode 3)

categories. Greater access to foreign providers of business services

Nepali firms reduce costs and identify new

liberalization commitments are carefully integrated with balance of

considerations and overall regulatory policy.

ix. Other Nnegotiations. These include Nepal's membership in preferential trade agreegovernment’s plans for safeguarding laws and competition policies, and possible min plurilateral agreements.

16. Findings

Nepal can benefit from the growing global integration of trade (both goods and seis reflected in the greater competition with lower cost and higher quality goods.

n its final

om two to

introduce

ased taxes

run. HMGN must now integrate this

WTO commitment into its broader fiscal policy.

itments in

ducation,

rism, and

ss-border

e 2) and,

in these

will help

foreign markets. Trade negotiators

must now work with domestic regulators to ensure that service trade

payments

egotiating Issues: Various other issues have emerged in the accessionments, theembership

rvices), that

WTO membership would not only enhance her effectiveness and efficiency in tradingcapacity but would also result in the expansion of trade, leading to a higher level of growth and enhancement of quality of life of the people in general. The "Accession Protocol" offers immense opportunities for taking Nepal's growth and development processes at a new heightand proves a valuable means to fight against poverty in the country through marketmechanism.

¶

·

¶ A recent WTO Secretariat report on members’ bound rates indicates that all new WTOmembers have bound ODCs t zero (TN/MA/S/4?Rev. 1, November 1, 2002).

255

Becoming a part of WTO Nepal has to develop her domestic capabilities to comexpa

Nepal can give the benefit of protection to domestic producers with tariffprotection to national service providers with domestic regulation andcommitments, safeguard infant and small business entities from permitted susafeguard from unilateral decisions of trading partners.In the mean time, Nepal's membership to WTO makes htrading opportunities whereby she could secure a share in the growth in itrade commensurate with the needs of her economic development.Nepal can ensure to raising the standards of living of her people by ensuring hof employment and a large and steady growing volume of real income andemand. Nepal can use WTO membership to improve the domestic trade poprocess, help exporters face foreign trade barriccess it enjoys in key

17. Lessons for the LDCs

No country, even developing and least developed, can escape from theglobalization should it aspire for her grois the avoidance of marginalization of these countries by joining the WTO. What iis to work hard to get benefits from the WTO regime being conscious to addressposed by globalization.

Membership in WTO is a challenge. One of the most challenging tasks in thiscreate a sense of national ownership so that the members can defend their trade aninterests within the parameters of the multilateral trading regime. The advantaLDCs from the rule-based system will depend upon business advocacy. The role of other stakeholders is equally important in creatingnational ownership in order to defend the national interest. The business sector sthe ability to identify, and take advantage of, trading opportunities by followinwithin the framework of the WTO obligations.

It is also important that they take the initiative in bringing to the notice of the Gtheir problems regarding exports, so that the Government can raise the issues atWTO forums in order to defend their interests. The Government, with private sectshould consider developing a mecha

this and they would benefit from the world trade rules. Therefore, it is necessary ta private sector-government partnership approach to capacity-building for negodefending national trade interests. This will only be possibleAchieving all this hinges on capacity-building and national ownership backavailability of financial and human resources.

pete in thended world market by exploring post accession implementation of its pledge in the world

body.

¶ flexibility,conditionalbsidies and

¶ er possible for expansion of her nternational

¶ igher level d effectivelicymaking

ers, and supplement the preferential marketa foreign markets. These benefits will help the country to better integrate itself into the world economy.

process ofwth and development. Only the question and concern

s importantthe threats

regard is tod economicges for the

their ability to understand WTO rules andthe sense ofhould haveg strategies

overnmentappropriateor support,

nism for accessing WTO mechanisms in cases of arbitrary actions and threats from trading partners. Many poor nations can barely afford to do

o formulatetiations and

through a national network. ed by the

There is a need for a common voice of LDCs as a group and the revival of integratedframework. Consultation among acceding LDCs to refrain from benchmark commitments is a must. There is a need to visualize the question of universality of the WTO.

The LDCs can also propose their interests collectively in emphasizing expeditious action forthe full and fair implementation of existing agreements and commitments. The negotiation strategy should also focus on broadening and strengthening S and D clauses in favor of the

256

developing countries and LDCs. Regional cooperation should foresee that thecountries would not modify and avoid arbitra

In view of the need for a collective response, LDCs (such as Nepal) shouldregional approach to address the capacity-building in WTO issues. One suchwould be a network at the regional level, embracing the SouCooperation (SAARC) countries, and among the regional groupings.

The network activities should give priority to information dissemination, humadevelopment and institutional enhancement. This network activity could be facdeveloping or strengthening the existing trade-related institutions within the counat the regional centers. Such institutions can play a crucial role inWTO sector action plan, such as textiles and clothing, agriculture and service traare of concern to all developing countries and LDC countries, including Nepal.

The aspiring LDCs should first off all analyze the challenges, threats and overalegal regime with respect to Accession Protocol. It should be understood that it wresponsibility of the civil societies and specially of the legal community to findvalid and pragmatic solution to the problem that would arise during the accessionwith due consideration of the ratification of WTO membership. Ther

me on ratification of the Accession Protocol. Challenges of research in mrade will have to be faced particularly by upgrading the research itself. Thoncentration from the point of view of international trade might be as follows:

Basic research in trade policy to support the shift from protectionism to libTherenexus between trade liberalization and poverty reduction.There is a dearth of scientific policy-oriented impact studies focusing on emerarrangements with due consideration of specific industries (garment industrieNepal).Most of the LDSc lack the technical and methodological skills in the field of scientific research. Most of the available studies are descriptive rather thanmean time, available trade data and format are confusing that misleads the findThere is a need for strong collaboration with regional and national trainingthrough networking, creation of international trade database and special forumto the trainers). Composition of team of negotiators should not be based on political patronage.To reinforce the communication and consultation process, a national networamong stakeholders, as this will help to build technical and operationalregardingexporters, importers, producers, business associations, trade experts and acadtrade journalists. O

developedrily anti-dumping or anti-subsidy measures to

the detrimental to the developing countries and LDCs.

focus on a mechanism

th Asian Association for Regional

n resourcesilitated by

tries and/orthe development of the

des, which

ll status ofas the jointout legallynegotiation

e should be clarity in thelegal regi ultilateralt e areas ofc

¶ eralization.is lack of theoretical breakthrough to support emerging trade arrangements and the

¶ ging trades in case of

¶quantitative. In the

ings.¶ institutions

s (training

¶¶ k is needed

capacitiesWTO and the multilateral trading regime. The network should include

emics, andther players such as labor unions, professional associations, social

issues-activists, consumer forums, NGOs, and INGOs will also have to be increasinglyinvolved in building awareness on WTO issues. The national network will be crucial to building synergies among networking members in order to develop a sense of national ownership.

¶ Above all, raise the production and productivity of the economy so that competitivecapacity could be raised.

257

Selected References

and LAN (2004), Legal Regime on Nepal's RatifiBased on the Discussion with the Lawyers, Kathmandu.

nomic and Social Commission for Asia and the Pacific (2004), Study oEconomic Impact and Social Costs of Adjustment to the WTO Membership of Nepal, ESCMAP, Bangkok

Mathema, Kanhaiya Bhakta (2003), WTO Opportunities and Challenpresented in Seminar Organized DAV College, Kathmandu

MoICS (2003), Nepal Trade and Competitiveness Study, Ministry oCommerce and Supply, Kathmandu

al Rastra Bank (2002), WTO and Nepal, NeShakya, Dev Bhakta (2004), "Agriculture within the WTO: Challenges

Opportunities in Nepal" in Sawtee, Kathmandu Shrestha, Prachanda Man (2003), Nepal's Accession to the WTO: C

Opportunities, Presentation made in a Discussion ProgrammRegime on Nepal's Ratification to the WTO, Kathmandu

Kathmandu Post (2003), EcoKathmandu

AAN cation to the WTO; A Report

Eco n Domestic

ges, Paper

f Industry,

Nep pal Rastra Bank, Kathmanduand

hallenges ande on Legal

The nomy:WTO Accession Talks Likely in April,

Trade Promotion Centre (2003), Nepal: Report on WTO prepared by the Trade Promotion Centre, Kathmandu.

World Bank (2003), World Trade Organization Working Party on the Accession of Nepal, http://www.wto.org

258

Appendix A

Possible Impact of WTO Membership on Poverty in Nepal

ccording to households. Using themputed as

ent live on less than two dollars per day- that is, no matter howone defines poverty, its incidence is high in Nepal, even when compared to other south

text of incomesion. It hasercent.

gions. It ist 44 percent of the rural households and 23 percent of the urban households

belong below the poverty line. Given that close to 88 percent of the total populationmpared to

ng against rty can be or fighting

than low income. It also reflects poorhealth, poor education, deprivation in knowledge and communication, inability to

the absence y .Fighting

ious to risehealth and

nformationtrade and

ansparent, predictability and

when goodortions anditments in

importanth a view to

otion of trade and promote the role of private sector.fs rate hased simple

competitiveness and competition. Additionalmeasures have been taken such as introduction of bonded warehouse, duty-drawbackscheme, initiation of the multi-model facility (dry port), export processing zones and privatization of public sectors.

Trade can be a strong tool for fighting against poverty in Nepal, specifically in followingways.

Poverty is deep and pervasive in Nepal, with wide disparity across regions. Athe 1995-1996 Nepal Living Standards Survey (NLSS), 42 percent of Nepaliare poor, using a nutrition based poverty line of US$ 75.91 per person per yearinternational dollar-a-day measure of poverty, the poverty incidence rate is co37 per cent, while 76 perc

Asian countries.

The tenth plan (2002-2007) has taken into consideration poverty in the conpoverty, status of human development indicators and condition of social excluset higher annual growth rate of 6.2 percent, which is currently only about 2.5 p

There is a wide variation in poverty incidence across various geographical reestimated tha

resides in rural areas of Nepal, poverty is much more severe in rural areas cothe urban areas.

Yet, there is neither a simple answer nor any universal blueprint for fightipoverty. Yet, poverty is no longer inevitable. Poverty can be fought. Povereduced. But fighting against poverty needs tools that are good enough fagainst it. Poverty has many faces. It is much more

exercise human and political rights, degradable environmental conditions andof dignity, confidence and self-respect. In short human deprivation is povertagainst all these deprivations mean fighting against poverty.

The accession protocol is conscious to all these human deprivations. It is conscincome level through trade, it is conscious to create environment conducive foreducational services, it has rightly acknowledged the importance of opening iand communication services and it has skillfully stroke balance betweenenvironment. The essences of the accession protocol are trrules of law, which are major pillars for good governance in the country. Conditions for enjoyments of human rights, political rights, and self-respect are created governance prevails in the country. Good governance also can stop market distgovernance can fight against poverty. One of the major premises of the commthe accession protocol is to help build good governance in the country.

The government has recognized the role of trade, investment and technology astools for fighting against poverty. Trade policy reform has been prioritized witcreate enabling environment for promIt has eliminated import licensing and quantitative restriction system. Tarifbeen significantly reduced and currently that is about 11 percent in unweightaverage. It has prioritized for trade sector

259

¶ ectors, such as textiles, can

¶ valueinadequateeffects foruse more

welcome effects through creation of

¶ traditional (such as spices, ea, herbal

medicines, and vegetables) can be promoted by increasing access to year-round

king into

service sector and ensuring strong intellectual property rights, It can be said that implementation of the commitments help growth, development and fight against poverty in Nepal.

By initiating growth in manufacturing and export shave potentially significant positive effects on the urban poor. The major impact of trade on the poor can come from switching to highcash crops from subsistence agriculture. A key constraint to that istransportation infrastructure. Growth of transport can lead to welfarethe poor through enabling farmers to switch to commercial crops andfertilizers transportation also has directemployment and income-generating opportunities.

To achieve agricultural growth and help the rural poor, transition fromsubsistence agriculture toward commercial crops

irrigation, inputs, technology, and most importantly, markets.

In short, Nepal's commitments to the Accession Protocol are devised taconsideration to address poverty through promoting manufacturing production,

260

Annexes

A Map to WTO¶¶ ished 1995¶¶ 98¶¶¶ 2000¶¶ 02¶ s on September 2002¶¶¶

Reportptember 2003 in the Fifth Ministerial meeting

of WTO held in Cancun, Mexico

regard topate moretiated theeducating

iness. Then activelyconcernedworkshop,

ental in preparing nt for the vernment,osition of

part from in the consultat ings by variousorg the FNCCI

has ca , organized consultation meetings. Some of the events organized by FNCCI are given below:

SN TITLE DATE PLACE

nnex 1: Nepal's RoadApplied for GATT 1989 Working Party establReapplied for WTO 1995MFTR submitted on July 19First WP Meeting on May 2000 Tariff/Service offer on July 2000 Bilateral consultations on SeptemberResponse to Queries on MFTR on October 01 Revised Tariff/Service Offer on May 20Second WP & Bilateral ConsultationResponse to Specific queries on February 2002 Revised/Consolidated Offer on April 2002 Fourth Working Party Meet August 2003 and adopted the draft Working Party

¶ WTO Membership Approved on Se

Annex 2: List of WTO Activities by FNCCI

The FNCCI has all along been involved in policy formulation withinternational trade. The FNCCI has been emphasizing on the need to particiclosely in the international trade negotiations. So as soon as Nepal iniprocess of joining the GATT and later the WTO, FNCCI took the task ofthe Nepali businesses about the WTO and its likely implications on busFNCCI established the WTO cell in the year 1999. This cell has beeinvolved in creating awareness amongst the business community,stakeholders and the people in general through various seminars,brainstorming sessions and the like. The cell has also been instrumthe private sector position and making the same available to the governmeWTO related negotiations. It has been working very closely with the goNGOs and development partners in developing a broad consensus on the pNepal in the international trade related issues.

A participating ive meet organizedstakeholders (government, NGO's, donors, private sector anizations)

rried out seminars, workshops, prepared position papers

1 Meeting on WTO to get feedback on the services- by MOICS and Nepal's accessionto WTO

2 Jan, 2002 Kathmandu

2 Meeting on WTO to get feedback on the services- by MOICS and Nepal's accessionto WTO

3 Jan, 2002

261

3 oes- by MOICS and Nepal's accession

Meeting on WTO to get feedback n theservicto WTO

6 Jan, 2002

4 NarayangarhNepal's Accession to WTO 2May, 2002 5 st May 1st BirgunjImplication on Nepalese Business Sector in

post WTO Accession Environment31June, 2002

6 6 iratnagar.Implication on Nepalese business sector in post WTO accession Environment

15-1 Aug2002

B

7 KathmanduNepal's accession to WTO: Present statusand challenges

2nd oct, 2002

8tion treaty (pct)

h2002

iratnagarWorkshop of advantages of joining patent co-opera

26t Nov. B

9 Market access in services: Interactionprogramme

1December2002

Kathmandu

1 Nepal's accession to WTO; present status and challenges

11 Dec.2002 K0 athmandu

1 Nepal's accession to WTO: interactionprogramme.

16Dec.2002 K1 athmandu

1 Nepalese trademark law and practice 20032 FNCCI13 siness se 9-10 February BhairahawaImplications on Nepalese bu ctor in

post WTO accession environment 200314 tor in 12th- 13th Feb. NepalgunjImplications on Nepalese business sec

post WTO accession environment 200315 Workshop on Business implications or the

Nepalese private sector of WTO-TBT March11, 2003 FNCCIf

agreement1 Implications on Nepalese business sector in

post WTO a11 may 26

ccession environment003 Kanchanpur

17 FNCCI+MOICS+ WTO JPROJECT 16TH JUNE2003

18 19TH JUNE2003

PROTECTION OF INTELLECTUALPROPERTY

19 n 10-11 july2003 KathmanduNational workshop on road to Cancu20

O compliance with TRIPs agreement

the report of the TRIPS repared by Australian

WTO.

15th August 2003

FNCCIThe kingdom of Nepal's accession to the WTOpinion of private sector was provided to the MOIS oncompliance matrix pexert under the Technical assistance of

2 Interaction program on Nepal's accessionto W

1TO

28 Aug 2003 Kathmandu

Cancun and Beyond 22 In-house session on WTO 16th

September2003

FNCCI

23 WTO Membership: impact on Nepalese SME'S

21-22DECEMBER2003

KTM

262

24 Opinion of private sector was given to MOICS on the competition act beingdrafted. AS the draft of the actfinalized yet.again if required.

Dece ber

is notSuch opinion will be given

m2003,january2004

25 Nepal's entry to the WTO and SAFTAchallenges ahead

31st,january2004

Biratnagar

2 Nepal's entry to the WTO and SAFTA challenges ahead

5th march206 04Pokhara

2 Interests of the LDCs in the WTO regime 10th march7 ,2004

Ktm

28 Brand protection as intellectual propertycross

24th marchcutting issues

,2004

FNCCI

2 International branding and marketingstrategy

7th y9 ma 2004 FNCCI

30 ustrial

ive. The

Jan-till date Inputs on the draft of the indproperty protection act are being given from private sector perspect act isbeing drafted.

31 Policy feedback on parallel import April 2004 32 Working on b April-Till daterand licensing Policy 33 Started working on branding Nepal

1 TO KathmanduSeminar on W September,1999

2 TO hulikhelSeminar on W 29thoctober,1999

D

3 14thnovember1999

NepalgunjSeminar on WTO

4 Seminar on WTO 26th July Bhairawaha5 Seminar on WTO August 2000 Biratnagar6 Booklet publication on "Introduction of

WTO"2002

Source: FNCCI (2004)

Annex 3: Share of manufactured goods in total exports by Nepal (1974/75 -2000/01)(Unit: NRs Million)

263

Ye Total E Manufactured goods

m

ar xportsclassified chiefly by

aterials1974/7 889.6 (10 28.5 0.0) 1 (3.16)1975/7 1185.8 (1 1046 00.0) .7 (8.83)1980/8 1608.7 (1 254.31 00.0) (15.81)1985/8 3078.2 (1 899.9 (6 00.0) 29.24)1990/9 7387.5 (1 4312.31 00.0) (58.37)1995/9 19881.1 ( 104456 100.0) 5.7 (52.59)1996/9 22636.5 ( 110287 100.0) .6 (48.72)1997/98 27513.5 ( 11637100.0) .1 (42.30)1998/9 35676.3 ( 135399 100.0) .6 (37.95)1999/2000 49822.7 (100.0) 15838.7 (31.79)2000/01 57244.7 (100.0) 18968.6 (33.14) Source: Nepal Rastra Bank (2002), WTO anNote: Figures in parenthesis are percentages.

nnex 3: An overview of the terms of accession

The working party report154 paragraphs out of them, 25 paragraphs are commitments paBroadly, the commitments are related to systemic commitmemarket access commitments.4Out of them 9 Paragraphs comprise introductory statements thaNepal's application, documents supplied by Nepal, workinformation and meetings, Nepal's approaches during thenegotiations, WParagraphs 10-21 provide a broad picture of economic policiesincluding monetary and fiscal policies, foreign exchange and payminvestment regime, state ownership and privatization, pricing policy and competition policy. Paragraphs 22-21 provide on framework for makingpolicies.Paragraphs 32-119 provide on plaices affecting trade in goods. Paragraphs 120-138 provideproperty rights. Paragraphs 139-143 provide on policies affecting trade in services. Paragraphs 144-151 provide on miscellaneous including publiinformation on trade, notification, infagreements, and technical assistance.

Specifically, paragraphs20,31,36,41,43,49,52,56,63,67,70,74,78,83,87,88,97,106,108,110

d Nepal, Nepal Rastra Bank, Kathmandu

A

on the accession of Nepal to the WTO comprisesragraphs.nts and

¶ t containg party

accessionTO members' responses and Working party's activities.

¶ of Nepalent,

¶ and enforcing

¶¶ on trade related aspects of intellectual

¶¶ cation and

ormation about bilateral trade

¶ Paragraphs 152-154 are concluding paragraphs.

,111,117,136,144 and 148 are the commitment paragraphs.

There are two schedules attached to the accession protocol.

It is based on the information provided by WTO Focal Point of MoICS/HMGN in a program on Legal Regime on Nepal's Ratification to the

264

WTO, organized by Law Associates Nepal and Action Aid Nepal on

First, Schedule of tariff commitment on goods, which comprisecommitment not to raise tariff on certain commodities in future aagreed ceiling line. About eighty percent of people of Nepal deagriculture therefore, considering the gravity of the imporagriculture in Nepal the average tariff rate is bound at 51 percedate of accession subject to bringing down to 42 percent in thtime at equal annual basis against our 10 percent applied tariffproducts. Flexibility's have been maintained on merchandise probyour economy when it is required to increase tariffs rates up to the bound level.

Second, schedule of specific commitments in services sectors; Nepal has conditionally agreed to open eleven seventy-five sub-sectors. The 11 service se

Business services¶ communication s¶ construction and re¶ distribution services;¶ educational services;¶ environmental services;¶ financial services;

¶ tourism and travel related services;recreational, cultural and

¶ transport services.

In brief, accession on goods follow:

n goods.Commitments

November 2003 in Katmandu.

s Nepal'sbove thepend on

tance ofnt on theree yearss in farmducts also

tariffs rates provide room for policy flexibility to address the need of

service sectors that cover about ctors are as followings.

¶ ;ervices;

lated engineering services;

¶ health related social services;

¶ sporting services; and

the terms of

Terms of accession oSN Heading 1. Pricing

)

control measures in a WTOrests

d for inpolicy(Para.20

to apply priceconsistent fashion taking into account the inteof exporting WTO Members as provideArticle 3 .9 of the GATT 1994.

2 inessCompetitionPolicy(Para.21)

To ensure fair competition in various busactivities in due course.

3 ortation

importationof goods (Para.36)

ommittedply laws and regulations relating to

exportation and importation in full conformity with WTO obligations, includingArticle1,viii.1(a),XI.1 and III of GATT1994.

Expand

From the date of accession Nepal has cto ap

4 Customtariffs(Para.37 and

¶ Nepal has made all tariffs lines bound ¶ The average applied tariffs rate is about 11

percent.

265

goods ¶ The average tariffs bound rate is 39the date of accession24 percent in three years time.

¶ The harmonized system of cclassification (HS system)is in vogue i

schedule)percent at

subject to lower down to

ommodityn Nepal.

5 Other tiescharge-

(para.40)

gradualtwo and ten

.DCs.

Fee of the

as ODCs..5-1.5 percent on farm products as ODCs.

duce new

duandODC

¶ Nepal has made commitment forelimination of ODCs betweenyears time from the date of accession

¶ for ten years time Nepal shall apply O¶ 1.5 percent as Local Development

value of imports as ODCs. ¶ 2.5 -11.5 percent on industrial goods¶ 2¶ Nepal has also committed not to intro

ODCs.6 charges for

rtprocessing at customs(Para42&43)

introduceor on adided for

rt processing at customs.¶ Nepal has made commitment for not exceeding

s import

impo¶ Nepal has reserved the right to

service charge either at flat ratesvalorem rates for the services provimpo

the current charge of 1 per cent alicense fee.

7 Quantitativerestrictions

ctions on.

ports and s, liquor

more than 60 percent of alcohol, and

domesticrelated to

¶ Nepal is not applying quantitative restriimports of goods

¶ Nepal has banned some goods both for imdomestic production, such as narcotic drugcontainingbeef and beef products.

¶ Nepal has also restricted to import andproduction of some goods that arenational security.

8 Licensingsystem(paras.48-49)

mport and e date of

duce, re-tions onsuch as

horizationlicensing requirements, and other

cannot be

tly automatic licensing system is relaxedtherefore submission of application for obtaining license is not required but letter of credits must be presented at customs.

¶ Nepal can control import for the sake of BOPconsistent with the Articles XIII and XVIII of GATT 1994.

¶ Nepal has practiced licensing system for iexport but has made commitments from thaccession to eliminate and not to introintroduce or apply quantitative restricimports or other non-tariff measureslicensing, quotas, bans, permits, prior autrequirements,restrictions having equivalent effects thatjustified under WTO.

¶ Curren

266

¶ Nepal has expressed that it would enainstruments codifying the substAgreement on Import Licensing Procedure

ct legalances of WTO

s.9 Custom

tion(aras.53-

56)

date ofment the

ry 2007.ions andould not

ncy withvaluation

ittee on tion and seek technical assistance.

ValuaP

¶ Gradually and progressively form theaccession Nepal would fully impleAgreement on custom valuation by 1 Janua

¶ Any changes made in the laws, regulatpractices during the transitional period wresult in a lesser degree of consisteprovisions of the agreement on customthan existed on the date of accession.

¶ Nepal would participate in the commcustoms valua

10. Applicatio

taxes(paras.57,58,62,63)

ely

A number of services are exempted from the

is applied to certain other services at a Zero

f cottage

ds with aestically

not applied excise tax to "chhyang" ait is not

if it iscise tax

xes in athe date

sion in conformity with articles I&III of

n of internal

¶ Nepal continues non-discriminatory taxes, namVAT and excise Tax.

¶ VAT has replaced the sales tax. ¶

application of VAT. ¶ VAT

rate.¶ Nepal continues tax exemptions in favour o

industries.¶ Nepal levies excise tax to domestic goo

view to provide same treatment to domproduced goods and imported goods.

¶ Nepal haslocally fermented products like beer ascommercially produced and exported butcommercially produced and exported exshall be applied.

¶ Nepal has committed to apply internal tanon - discriminatory manner fromaccesGATT 1994.

11. Rules of(P

66,

the WTOement on Rules of Origin upon the date of

accession by introducing a WTO consistent regime on originaras.67)

Nepal has made commitment to implementagre

rules of origin. 12. Other

customsNepal has confirmed that it does not require any kind of certification of the customs documentation byofficials.formaliti

es(para.68)

consular

13. Pre-shipmentinspection(paras.69,70)

¶ Currently Nepal does not have a system of pre-shipment inspection.

¶ If in future, Nepal engaged in pre-shipment enterprise it would build a system in conformitywith WTO agreement on pre-shipment Inspection and other related Agreement.

267

¶ Any pre-shipment inspection regime would be temporary.

14.

mes(Para71,72)

has no anti-dumping or

onsistent

itment to sidies and

feguard,sures onlylaws in

agreementsle VI ofeasures.

Anti-dumping,countervailingduties and safeguardregi s.

¶ Currently Nepalcountervailing duty regime.

¶ Nepal is interested to introduce a WTO clegal regime on anti-dumping and countervailing measures.

¶ Nepal has also expressed its commimplement the WTO Agreement on SubCountervailing Measures by May 2004.

¶ Nepal has confirmed that it would apply saanti-dumping or countervailing duty meaafter notifying and implementingconformity with the provisions of WTOon Safeguards, Implementation of ArticGATT and subsidies and countervailing M

15. Trade restriction(Paras.73,74)

nact law estrictions

nt. the

sistency94 and

¶ Nepal has expressed its interest to econsistent to the WTO authorizing trade rfor trade remedies and for balance of payme

¶ Nepal has committed to apply section 3 ofexport Import (control) Act of 1957 in conwith article XVIII of GATT 19understanding on Balance of payment.

16 Export regulation(paras.75,78)

egistrationort and import are same.

to levyvalorem

ent of

ee is to to ensureversion to

ntries.

¶ Nepal has expressed that the rrequirements for exp

¶ Nepal has expressed that it will continueexport services fee of 0.5 per cent adand bring it into conformity with the requiremArticle VIII of GATT 1994.

¶ The rationale of imposing export fdiscourage environmental degradation,food security and to discourage trade dineighboring cou

19. Export restrictions(paras.79,80,83)

ue exportes such as d to fulfilMEAs to

rohibitedsing from

¶ Export restriction on raw hides, skins and raw wool is temporarily applied and Nepal would lift the ban in appropriate time.

¶ Nepal would review the export ban on importedraw materials, parts and capital goods in the light of Article III and XI of GATT 1994.

¶ Nepal has confirmed that it would continrestrictions on exhaustible natural resourclogs, timber The restriction is also imposethe obligations arising from the differentwhich Nepal is a party.

¶ Nepal has also expressed that it would not allow export of those flora and fauna that are pfor export respecting the obligations arithe CITES.

268

¶ Nepal has committed to conform thlicensing requirements and other exporrequirements in l

e exportt control

ine with Articles XI, XVII, XX and XXI of GATT 1994.

20. Export moti

(para.84.)

necessarysuch as

her andsweaters,

raditional handicraftstries and

such as computer software..

proon

Nepal has expressed that it would undertakesteps to promote export on industrial goodswoolen carpets, readymade garments, leatleather products, cotton products, woolenwoolen mufflers, etc. and tproducts, products of Cottage and Small induother products

21. Subsidies

ncentives

terms of duty and under thect, 1992.

easuresthem.

tify theecessary

s subsidyh WTO

¶ Nepal did not provide direct payment of ito any industry.

¶ Nepal provides certain exemptions inincome tax, sales tax, excise tax, excisecustoms duties to the industries qualifyingconditions stated in Industrial Enterprise A

¶ Nepal has committed to identify subsidy mincompatible with the WTO and eliminate

¶ Upon the entry into force of the Nepal's Accession Protocol Nepal has committed to noCommittee on Subsides about all the ninformation on subsides.

¶ Nepal has committed to administer itprogrammes in full conformity witagreement on Subsidies and Countervailing Measures.

22 Technic

lation and standards (paras 96, 97)

ent theice by 1

he Nepaltrology in June 2003.

to fullyement.

s confirmed to provide additional ication of

ady inbject to

transitiongree of

consistency to the TBT. ¶ Nepal would notify the existing technical

regulations and standards to the Committee on TBT.

¶ Nepal would review the existing regulation and standards for conformity with the WTO

alregu

¶ Nepal has confirmed that it will fully implemTBT Agreement and Code of Good practJanuary 2007.

¶ Nepal has established an enquiry point in tBureau of Standard and Me

¶ Nepal has asked technical assistanceimplement the obligations of the TBT Agre

¶ Nepal hatreatment and MFN treatment in the appltechnical regulations and standards.

¶ Nepal has agreed that measures alreconformity with TBT would not be sutransition period.

¶ Any changes in law and policies duringperiod would not result in a lesser de

269

requirements.23. Health

gsara.

99)

s on then of the

elf-relianty of sale

drugs at cover the

by the

sponsibility ofellectual

cals.

dru(p

¶ Nepal has confirmed that it emphasizemaintenance, safeguarding and promotiohealth of people by making the country sin drug production; ensuring the availabilitof effective, standard and qualityaffordable price in quantities sufficient toneeds of the country.

¶ Nepal requires medicines imported into the country complying with the standards laid downMinistry of Health.

¶ Nepal has acknowledged the reDepartment of Industries to enforce the intproperty rights in respects of pharmaceuti

24. SPS (para. 02105, 106)

ernationalonize and

tionalstandards

and has differenteasures.technical

.oint by 1

ully implement the SPS Agreement

s and regulationsly amend

s.S would

e subject to transition period.that anyot result

rovisionse date of

adoptedoped in

rmity with the provisions of the SPS

¶ Nepal has also committed to notify existing SPSmeasures to the committee on Sanitary and Phytosanitary Measures.

¶ Nepal has expressed its interest for technical assistance.

¶ Nepal would fully participate in the work of the

, ¶ Nepal is a party to different intinstruments and has different laws to harmimplement the phytosanitary measures.

¶ Nepal is also a member of different internaorganizations and follows internationalincluding Codex Alimentariuslaws to adopt and implement the sanitary m

¶ Nepal has also informed about lack ofexpertise to implement the SPS agreement

¶ MoA would establish an SPS enquiry pJanuary 2004. It has been established.

¶ Nepal would fby 31 December 2006.

¶ Nepal has confirmed to review lawrelating to SPS measures and accordingnecessary legislation.

¶ Nepal has committed to apply existing measures ina non-discriminatory manner to all import

¶ Measures already in conformity with SPnot b

¶ Nepal has made commitment to ensurechanges during transitional period would nin a lesser degree of consistency with the pof the SPS Agreement than existed on thaccession.

¶ Technical regulations and other measuresduring this period would be develconfoagreements.

270

SPS Committee.25. TRIMs (para.

108)at there is no inconsistent

xisting TRIMs measures in

duce anys inconsistent measures from the date of

¶ Nepal has confirmed thmeasure in Nepal to the TRIMs.

¶ Nepal would notify eNepal to Committee to TRIMs.

¶ Nepal has also committed for not to introTRIMaccession.

26. State trading nd provideance withtanding.

ATT and

¶ Nepal has made commitments to notify ainformation about state treading in accordArticle XVII of GATT 199 and its Unders

¶ Nepal would apply it’s law's and regulations in fully conformity with Article XVIII of Gits Understanding.

27. Free zones

¶ Nepal informed that currently there werezones in Nepal and if Nepal establishes frNe

no freeee zones

pal would conform the rules of the WTO.28. Government

procurement(paras. 112,

applyingestic legal

pal doesincluding

113)

¶ Nepal has informed that Nepal isgovernment procurement rules under domregime.

¶ Nepal has also informed that at present Nenot intend to join Plurilateral AgreementsGovernment Procurement.

29. Textiles (par117)

bout therictions applied by WTO Members

e Textile

the base

a. ¶ Nepal has committed to notify aquantitative restto Nepal's textiles and clothing to thMonitoring Body.

¶ Nepal has accepted the date of accession aslevels for growth rates.

30. Transparencypublication(paras. 20, 31, 144)

s subjectts official

nd would continue to do so after accession.

a has agreed to fulfil the obligation of tions, judicial decisions

le X

/ ¶ Nepal has agreed to publish the list of goodto State control and any changes in iGazette a

¶ Neppublication of laws, regulaand administrative rulings to comply with Articof GATT 1994.

Terms of accession on farm products

SN. Heading Commitments1. lture

DevelopmentFee (para. 40)

griculturedevelopment fee as ODC over a period of 10 years with a commitment for elimination between 2 to 10 years period.

Agricu Nepal is permitted to levy 2.5-14.5 per cent a

2. Export promotion(para. 84)

Nepal has expressed that it would undertake necessarysteps to promote export on agriculture commoditiessuch as lentils, Niger seeds, tea and coffee, ginger,

271

cardamom, vegetable seeds, flower , silk and silk products, medicinal herbs, fruits, etc.

3. jorilities

para. 85)

sales tax, excise duty

rebate for

riod of 10

Some matax fac (

¶ Nepal continues to exemptand income tax to Cottage industries.

¶ Nepal continues to provide 50 per centseven years to agro based industries and storage of fruits and vegetables.

¶ Fruit-based fruit processing industries of fixed assets up to NRs. 2.5 exemption for a peyears.

4. Plant and

importation

lant, plantrequired

g the plant quarantine standards laid down byment of

animal

(para. 92)

¶ Nepal has confirmed that importation of pproducts, animals and animal products aremeetinthe standards laid down by DepartAgriculture.

5. Export and

ucts)

i-ucts are

y DFTQCimport of food prod(para. 98

¶ Nepal has confirmed that both processed, semprocessed or unprocessed food prodrequired meeting the food standards set bfor export and import.

6. Import and

ons

informed that few agricultural productsreventingexport

restricti

¶ Nepal hasare restricted for import and export for pdiseases and protect health and environment and on religious grounds.

7. Pesticideregulation

)

import of sticide is regulated with a view to protect the

.pal has also confirmed that it can ban or restrict

rdous to

(para 101

§ Nepal has confirmed that export andpeenvironment and ensure sanitary measures

§ Neany PIC pesticides that are potentially hazahealth.

8. Agriculturalpolicy (para. 14)

importing

o specificgricultural

istance to grams in

relatingarketing

griculturalf through

tion, naturald other

rt for small farmers, urea transport subsidies for remote areas, subsidies fortea promotion and dairy development grants.

Á The base total aggregate measures of supports (AMS) are below the de minimis 10 percentages.

Á Nepal has informed that it is a net food -country.

Á Nepal has also informed that there is nincentive for that export of acommodities.

Á Nepal has informed that it provides assagricultural producers by government proareas such as support for general researchto different products , extension services, mand promotion activities including amarker information, natural disaster reliecrop subsidies, loans and for irrigadisaster relief through crop subsidies aninfrastructure suppo

9. Agricultural subsidy(para.

Á Nepal has informed that it does not have agricultural export subsidies.

272

14)

Terms of accession of service sectors

S Heading Á CommitmentsN1. Pricing policy

(para. 20)ply pricet fashion

le VIII of

Á Nepal has made commitment to apcontrol measures in a WTO consistentaking into account the interests of exporting WTO Members as provided for in Articthe GATS 1994.

2 Competitionpolicy (para

Á To ensure fair competition in variousactivities in due course.

.. 21)

business

3. Internal tax(para57, 58, 59

services,ract taxes.from the

at a zero

es)

Á VAT has replaced all the taxes onincluding entertainment, hotel and cont

Á A number of services are exemptedapplication of VAT.

Á VAT is applied to certain other servicesrate.

4 Pre-shipmentinservices(para. 70)

Á Nepal has made its interest that in futumay engage in the services of a preinspection enterprise.

.spection

re Nepalshipment

5 Standards (para.90)

Á Nepal continues to determine standrelation to services by Nepal CoStandards.

. ards inuncil of

6. State trading(para. 110)

aws andwith full

y with Article VII of the GATS.

Á Nepal committed to apply its lregulations in relation to state tradingconformit

7 Transparency(

Á Nepal has agreed to publish the list ofsubject to State control and any changeofficial Gazette and would continueafter accession.

.para. 110)

servicess in its

to do so

8. Publication par . gation ofns, judicial

comply

( a31)

Á Nepal has agreed to fulfil the oblipublication of laws, regulatiodecisions and administrative rulings towith the Article VI of GATS.

9. Legal regulatorframework(para. 137)

Á Nepal has expressed that the legal framstill under development and a number ofsector need to be regulated by necessary

ework is serviceslaws.

10 Service sectorsopened

Á On a conditional basis Nepal has oservice sectors and about 75 sub-sector

. pened 11s.

11. Membership ofprofessionala ( a139)

Á Nepal has confirmed that certain professional require professional licenses and

are applied in non-discriminatory basis.ssociations par .

servicesmembership that are open and transparency and

12. Enquiry point Á Nepal has committed to establish enquiry point by June 2003 and that has been established.

Á Terms of accession on TRIPsSN Heading Á Commitments1. Application Á Nepal has committed to enact Industrial property

273

of TRIPs )

Act covering Section 2 through 7 of Part II of the TRIPs.

Á Nepal has com2002 as per necessity.

(para. 136mitted to amend Copyright Act,

3. olicy (para119)

l property policy is under

y.an authority to

P . Á The industriaformulation by MoICS

Á DoI shall implement the industrial policÁ The copy right Registrar is

implement copyright policy. 4. Membership l is a member of WIPO since 1997.

since 22.

ention by

onventionRight by

also lookions e.g.

WIPOmance

nationalf joining

Á NepaÁ Nepal is a member of Paris convention

June 2001Á Nepal is committed to join Berne Conv

December 2005. Á Nepal has committed to join Rome C

and Treaty on Intellectual propertyDecember 2006.

Á Nepal has also expressed that it wouldat other WIPO and IP related conventGeneva Phonograms Convention,Copyright Treaty and the WIPO Perforand Phonograms Treaty in terms ofinterest and explore the possibility othem in the future, as appropriate.

5 U Á Nepal has expressed that it would aUPOV 1991 in termexplore the possibility of joining inappropriate.

. POV lso looks of national interest and

future as

6.discriminatorytreatment(paras.121,122)

l

3 of the iminatory

mmittedtreatment

ial property.t to

all and osed to

the discounts were not .

Non- Á Nepal has committed to provide nationatreatment and MFN treatment.

Á Nepal has committed to amend section 1copyright act for ensuring non-discrtreatment.

Á Upon the date of accession Nepal has coto provide non discriminatoryregarding fees regarding industr

Á Nepal has also reserved its right to discounindividual applicants, or even smmedium-sized enterprises as oppcorporations, so long as based on the nationality of the applicants

7 Technicalassistance(para.123,134,135)

lish copyformation centre if technical assistance

for full implementation of TRIPs.

Á Nepal has expressed its interest to estabright in

8. Flexibilities(Para.127)

¶ Nepal has expressed its willingness to incorporate flexibility in its legislation providedby Doha Declaration on TRIPs Agreement and public Health.

274

9s

nt varietyprotection by December2005

Plantvarietie(para.128)

¶ Nepal has committed to provide pla

10. Enforcement(ras.131-

135)

rovide enforcement

nce forincludingwyers for

pa¶ Nepal has committed to p

mechanism in conformity with TRIPs ¶ Nepal has sought technical assista

Providing training to the personnelcustoms officials, police, judges and laeffective enforcement by 2004.

11. Informationcentre

establish trademarks,- designs

expressed its interest to establishechnical

¶ Nepal has committed toIndustrial Design, Patent and layoutinformation center by 1July 2005.

¶ Nepal hascopyright information centre if tassistance provide.

12. tionmeasures(para.133)

l.

¶ TRIPs-consistent measures already in placewould not be subject to transition.

Transi al ¶ Nepal has committed to provide nationatreatment from the date of accession

Leg itmenSN Heading Time line

islative comm tsCommitments

1 Enactmentlaws (Para.28)

en anact

es of

aany

lationsthe

entsd not result in a lesser

y withelevant

thante of

s with these

llowed

2003-2006of ¶ Nepal Has undertakCommitment to edifferent 41 pieclegislation.

¶ Nepal has undertakencommitment thatchanges in laws, reguand practices duringtransitional arrangemwouldegree of consistencthe provision of the rWTO Agreementsexisted on the daaccession.

¶ The scope of application of existing inconsistencieWTO provisions inareas would not be ato increase.

2. Review ofadministrativedecisionmaking system(Para30&31)

Nepal has expressed that it would review the legislation on appeal against the decisionsmade y administrative agenciesto ensure that there would be and appropriate system either

Upon the date of accession.

275

throught enactmentamendlegislation.

orment of appropriate

3. etition(Para.21)

went with WTO

agreements.

¶ Prepare Bill byNovember

03tment

Comp To frame a competition Laconsist

20¶ Enac

by July 2004 4. Import licens

(Para.48)at itments

substances of

By, December 2003

ing Nepal has expressed thwould enact legal instrucodifying theWTO Agreement on Importlicensing procedures.

5. Customvaluation(Para.50)

t itthe

ave tod in current

fully

by 1 January 2004

Nepal has expressed thawould examinemodifications that would hbe introducelegislation and practices toimplement the WTO custom valuation Agreement.

6. istentregime on rules of origin.

by December 2003

Rules oforigin

Introduce a WTO conslegal

7 Anti-dumpingand

gmeas

Nepal shall enact a law o -dumping and countervMeas

by.

countervailinures

n antiailing

ures.

July 2004

8. Subsidies and To develop a legal regime on by May 2004 countervailing subsidies and countervailing

Measures. Measure

s9.

them into full compliance withon

By 31 December 2005

TBT To amend existing laws to bring

the WTO AgreementTechnical Barriers to Trade.

10. SPS Measure

ble By December 2005

s

Make existing laws compatiwith SPS Agreement.

11. TRIMs Nepal would develop legal regulatory Mechcompatible withAgreement on trade

by May 2004 anismWTO

relatedinvestment measures

12. TRIPs ¶ Nepal has committed to prepare industrial propertyact covering all categories of industrial property rights section2 through 7 of part II

by December 2005

276

of the TRIPs. ¶ Nepal has committe

amend the2002 as necessary.

d tocopyright act

13. plant ety

d to preparet.

by December vari

Nepal has committeplant variety protection ac 2005

14. GATS itted to amenddifferent laws.

by February 2004.

Nepal has command enact

Timaccomplish

Commitments relating to adjudication.SN Heading Commitments e line to

thecommitments.

1. Review oftive

makingsystem(Para.30)

at ittion on

ionses

e anpriate system either

Time line has not been set. administradecision

Nepal has expressed thwould review the legislaappeal against the decismade by administrative agencito ensure that there would bapprothrough enactment or amendment of appropriate legislation.

2 Review ofactions(Para.31)

itignateor the

of all

ws,cisions

Upon the date of accession.

Nepal has expressed thatwould establish or destribunals or procedures fprompt reviewadministrative actions relating to the implementation of laregulations, judicial deand administrative rulings.

3. Administrativetribunal endent

ibunal to review ustoms

tomsdecision of the

to the revenue tribunal.

by 31 December 2004 Nepal has made commitment to establish an indepadministrative trthe decisions of the cauthority regarding cusvaluation and thetribunal will be subject to appeal

4. TRIPs Nepal has committed to ensureenforcement mechanism inconformity with TRIPs.

by December 2005

Source: Trade Promotion Centre (2004), Study on Domestic Economic Impact and Social Costs and Adjustment to the WTO Membership of Nepal,Kathmandu

277

n trade of Nepal (1970/71 - 2000/01)NRs

Description Exports B)

Ind hercountri

Imports(CI

India Other countries

Annex 4: Foreig(Unit: million)

(FOia Ot

es F)1970/71 400.6

(100395.2(98.7)

.10.0)

16.888.2).0)

5.4(1.3)

699(10

6(

82.3(11.8)

1975/7 118(100

8 .7(75.9)

1.70.0)

227.161.9)

6 5.8.0)

93 292.1(24.6)

198(10

1(

754.6(38.1)

1980/8 160(100

992.4(61.7)

616.3 8.20.0)

179.249.2)

1 8.7.0) (38.3)

442(10

2(

2249.0(50.8)

1985/8 307(100

1241.1(40.3)

1836.9(59.7)

1.20.0)

970.942.5)

6 8.0.0)

934(10

3(

5370.3(57.5)

1990/9 7387(10

1552.2(21.0)

58(7

27.5(100.0)

323.11 .50.0)

35.39.0)

232 7(31.5)

15903.4(68.5)

1995/96 19881.1 3 2.5 1 5 7 54.532.8)(100.0)

68(18.5)

6198.(81.5)

44(100.0)

24398.6(

50055.9(67.2)

2(52.3) (100.0)

46662.3(41.2)

667340.0(58.8)

000/01 5744.7(100.0)

2730.4(477)

29940.6 113386.3

Source: Nepal Rastra Bank and the Federation of Nepalese Chambers ofNote: Figures in p enthesis are percentage

ties to enue(Unit: NRs million) Yea Total tax revenue Revenue from

t

Commerce and Industry.ar s.

Annex 5. Contribution of customs du total tax rev

rariffs

Share of tariffrevenue in tax revenue (%)

198 3,15 1,065.15 0.80 33.801990 7,28 24.1 ,684.9 36.86199 19,6 7,5 60.0 017.9 35.70199 21,6 7,6 68.0 327.4 33.821997 24,424.1 8,309.1 34.021998 25,926.6 8,499.9 32.781999 28,753.0 9,517.5 33.102000 33,152.5 10,813.3 32.62 2001 38,865.0 12,552.1 32.30 Source: Nepal Rastra Bank.(2002), WTO and Nepal, Nepal Rastra Bank, Kathmandu

278

VIETNAM ON THE ROAD TO WTO:

First D

January 2005

Executive Summary

As a developing country in transition, Vietnam has been implementingreform over the past two decades to shift to market-based economy.important objectives for the country are poverty reduction throughdevelopment. WTO membership is a means for the country to achiobjectives. In the WTO accession process, the country's priorities are i)export market, which is essential for Vietnam's exports and thus economicattraction of FDI, which brings in the needed and scarce capital, technoknow-how for the benefit of the hodomestic institutional reform, to enhance efficiency and facilitate developmpriorities were set by the Communist Party and the government, and were rofficial documents over the past decade.

To prepare for the WTO accession process, the governmend took many stepof institutional building, policy coordination, consultation with business slegal reform. In terms of institutional preparation, the delegation for WTO nwas set up to help the government with preparation, advice, and supponegotiation process. The National Committee for Economic Cooperationministerial body that plays the coordinating role in the whole economic iprocess, including AFTA, Bilateral Trade Agreement with the United SWTO accession processes. Training of human resources were alsoextensively in the government agencies involved. In terms of policy coordigovernment starts steps to mainstream the WTO accession efforts intoagendas of domestic reform, poverty reduction, 5-year planning, and sociodevelopment strategy, to make sure all of them are consistent and supportiothers. Consultation efforts with the business communChamber of Commerce and Industry to receive feedback on the accessionthe government. In terms of legal reform, WTO-related legal reform has bimportant part of the National Assembly's legislative agenda. During the 2period, about 40 legal documents, including laws and ordinances, have beenamended with elements related to conformity with WTO rules.

As a poor and developing country, Vietnam faces a lot of challengnegotiation process as well as in implementation of its commitments. Nchallenges can range from WTO-plus concessions asked by member cocoordination among the key agencies involved in negotiation. Som

AN ACCEDING COUNTRY’S EXPERIENCE

raft

by Dang Nhu Van, Phan Chi Thanh, Le Kim Sa

economicThe mosteconomiceve theseaccess to

growth; ii)logy, and

st country's development; and iii) opportunity for ent. These eflected in

s in termsector, and egotiationrt to the

, an inter-ntegrationtates, andconductednation, theother big

-economicve to each

ity were done by the Vietnam policy ofecome an 001-2004passed or

es in theegotiationuntries toe of the

concessions, if accepted, would threat hamper Vietnam's development. Coordination among government agencies, and between the government and the business community also requires a lot of resources, which are always a constraint for Vietnam. And constraints of resources, human included, are the problem of Vietnam'spartner countries as well, not all of them are always ready in negotiation. The fact that Vietnam is classified as non-market economy put the country in disadvantaged

279

position in the past and potential dumping case investigation. Throughout thshortage of human capacity is always a big challenge for the country.

In implementation, an important challenge is how to combine the domeswith WTO accession process. Legal reform is another big task, with legal reamendment and new promulgation, which takes quite a lot of resourclegislative and executive branch. Coordination among key agencies conWTO implementation is another daunting task. It is not always easy tobetween the national and the sectoral interests. For the business sector, theis how to gain foreign market knowledge and be prepared for the new opbrought by the WTO membership. Export market opportunities will not maunless Vietnamese exporters are competitive and strong enough to gain a fthose markets. Firms also have to be familiarized with the rules of thinternational business to survive and compete. And finally, it is the governmtake care of the losers in trade liberalvulnerable groups should be protected for social equity and stability purpoare supportive to growth and development.

In the whole WTO accession and economic integration process, Vietnam rlot of technical assistance from both multilateral and bilateral donors. Thismainly concentrates on capasupport the negotiation and implementation process. More assistancediverted to the business sector as well, to raise the awareness and help thefor new competitive environment.

Based on Vietnam's WTO acession process, a number of lessons can beother developing counries. First, the country or its leaders should be cleaoverall development objectives, and WTO accessionachieve those objectives. Anything the countries does in terms of prepasupport to the negotiation and implementation afterward should be deeplyby its development objectives, to make sure the whole process is consistedevelopment course and WTO process are mutually supportive.

Second, for a developing countries in transitions with many different biconducted at the same time, including domestic institutional reformreduction, and international integration, a top-down approach in decisionmaking is necesinstead of contradict and result in waste of resources and efficiency loss. Tan easy job, as sectoral interests, represented by individual ministries or agnot always the same as the national interests. Therefore, a strong acommitted top political leadership is essential to maintain the national interin all action plans.

Third, efforts are neededcommunity to inform it about where the country is and will be heading inglobalized world economy. The strongest message to businesses would be th

e process,

tic reformviews fores of thecerned inreconcilechallenge

portunitiesterialized,oothold ine game in

ent job to ization and globalization. The disadvantaged and

ses, which

eceived aassistance

city building for government agencies and officials, to should bereadiness

drawn forr about its

could serve as a means toration andmotivatednt and the

g agendas, poverty

and policysary to make sure all of those are consistent and mutually supportive,

his is notencies, arend highlyests thrive

from the government to send a message to the business the more

e one thatstrikes their own interests and incentivizes their involvement for their own good and that of the nation as the whole. General dissemination and education for the public and businesses without specific motivation would not attract much attention or beeffective in raising awareness.

And last but not least, technical assistance is needed from both multilateral andbilateral sources. Multilateral organizations are in a good position to help the acceding

280

country and the people involved with capacity, knowledge, and expertiseaccession process, so that they can make informed decision in the negotimplementation process for the best benefit to the country. Bilateral suppuseful in enhancing technical capacity for the institutions and people convarious technical and legal aspects of WTO rules, its agreements, and fleapplication. Impact assessment is another important area that technicalfrom any source will be helpful. This would be best conducted by research inor think-tank to inform the government in the decision making proassessment can be done independently by the academics or by ordgovernment to address a specific need in policy making. In any case, therea mechanism of information collection and provision from government depathe research community or any

about theiation andort can becerned inxibility inassistancestitutions

cess. Theer of theneed to bertments to

information user, to facilitate research. Therefore,technical assistance for information publicity can be very helpful to research thatsupport government decision making.

281

Introduction

Vietnam is a developing country in transition that conducts economic andreform at the same time with WTO preparation. In this capacity, its expeacceding country could be useful as reference for other developing counpaper tries to map out Vietnam's WTO process, the steps it takes, the challfaces, and the technical assistance received throughout the process. The papstructured in two parts: Part I on Vietnam's experience in WTO accession, aon lessons for other developing countries. Part I will cover major issues apriorities in WTO accessio

I. Vietnam's experience in WTO accession

1. National priorities in WTO accession

International integration was identified as a means for the country’s deveVietnam resumed the relation with the international financial commthe US trade embargo was lifted in 1994. The policy choice of internationalintegration is found in various documents of the government, the Comand the National Assembly. In the political system of Vietnam, any imdecision, including the one to apply for WTO membership, was made on abasis, with consensus obtained among the key institutions. A milestone in pstatement was set in 2001 by the Communist Party's Resolution on internateconomic integration (Vietnam's Communist Party, 2001). After this imdocument was issuedby specific actions, such as integration action plan, consolidation of sinstitutions, training of human resources, implementation of bilateral and mcommitments that pave the way to WTO accession, WTOyear planning cycle, etc.

WTO accession has been considered by political leaders of Vietnam as thepriority in recent years, after the start of the Doha round, China's WTO membership,and the conclusion of the Vietnam-US Bilateral Trade Agreement.

As a poor developing country in transition, Vietnam made a strong commboosting economic growth and poverty reduction. This commthe country's Comprehensive Poverty Reduction and Growth Strategy, ratifPrimeever increasing pressure from foreign competition, WTO membership isthe country to reap the benefit of globalization on fair terbenefits that WTO membership can bring to Vietnam:

i) access to

legalrience as antries. This

enges iter will bend Part II

s: i) nationaln, ii) preparation by the government, iii) key challenges,

and iv) technical assistance received. Part II will draw on the same issues as lessons for other developing countries.

lopment after unity in 1992 and

munist Party,portant

unanimousolicy

ionalportant

, the government made a series of official decisions to follow up upporting

ultilateralmainstreaming in the 5-

top

itment in itment was reflected in

ied by the Minister in 2002. And in a more competitive and globalized world market, with

a means forms. There are three major

export market, which is essential for Vietnam's exports and thus economicgrowth;

ii) attraction of FDI, which brings in the needed and scarce capital, technology, and know-how for the benefit of the host country's development; and

iii) opportunity for domestic institutional reform, to enhance efficiency and facilitate development.

282

Of course, there are other benefits of WTO membership as well, such as thedispute resolution mechanism in dealing with other WTO members, andas important trad

2. Preparation steps by the governm

2.1. Institutional support and preparation

After Vietnam officially applied for WTO membership in 1995, many stepinstitutional building was taken by the government to prepare for the negoprocess. In 1997, the delegation for WTO negotiation was set up. The delethe responsibility to advise and comments on negotiation offers, pinternational negotiations, report on the negotiation outcomes and suup measures, andnegotiation and implementation of commitments (Prime Minister116/1998/QD-TTg).

In 1998, the government has decided to set up the National Committee fInternational Economic Cooperation (NCIEC). This Committee is mmaking strategies for international integration, working with agenciereviewing and adjusting the current regulations to conform to internationaland agreements. The Committee is represented by all ministries and agenciconcerned with economic cooperation and integration, and coordinated byMinistry of Trade. A new department, Multilateral Trade Policy Departmset up in the Ministry of Trade toThe government also instructed ministries concernedWTO accession issues. These units have the task ofsector they represent as inputs for the negotiation strategycoordinated by the Ministry of Trade.

Box 1. Major steps in Vietnam's WTO accession process

use of theif considered

ing nation, the country may join other members to have a voice in world trade regime.

ent

s intiationgation has

repare and conductggest the follow-

cooperate with ministries concerned on sectoral issues in Decision No

orandated with s concerned in

treatiesesthe

ent, was also deal with integration issues and WTO negotiation.

to set up a new unit to deal withproviding the perspective of the

and policies to be

1995. Vietnam applied for WTO accession and became observer

August 1996. Vietnam provided to WTO with the Memorandum on its trade regime.

May 1997. Decision on the establishment of the government delegation for WTO negotiation, represented by the Ministry of Trade, Ministry of Foreign Affairs,Ministry of Planning & Investment, and other bodies concerned.

August 1997. Decision to establish a group for advisory research on Vietnam's WTO accession.

February 1998. Decision to establish the National Committee for InternationalEconomic Cooperation chaired by a deputy PM. The Commitee is called to helping the government on steering and coordinating ministries, industries and localities for participating in international activities, including negotiations for WTO accession.

July 1998, Vietnam conducted the first multilateral meeting with the Working Partyon transparency, economic and trade policies.

December 1998. Second Working Party meeting.

July 1999. Third Working Party meeting.

283

November 2000. Fourth Working Party meeting. 1700 questions of the Working Partyon transparency in economic and trade policies have been answered by Vietnam after the 4 rounds of meeting. With these answers, Vietnam finished the policy transparency stage and moved to market access issues.

April 2002. Vietnam provided the Initial Offers on goods and services after the 5thmultilateral meeting, which discussed market access issues. Vietnam has provided tothe WTO Secretariat materials such as executive summary of existing economic and trade policies, domestic support and export subsidies for agriculture, industrialsupport, state-owned enterprise operation, action plan for TRIMS, customs valuation, SPS, TBT, import licensing, pricing and roadmap for eliminating the dual pricing, andtariff reduction schedule.

October 2003. Seventh Working Party meeting. Vietnam submitted materials,including its applied tariff schedule, and a new services offer to its WTO WorkingParty. Action plans, including a general legislative action plan, were also submittedon the implementation of the WTO Agreement on Customs Valuation, Agreement on Import Licensing, Agreement on Sanitary and Phytosanitary Measures, Agreement on Technical Barriers to Trade, Agreement of Trade Related Invested Measures, and Agreement on Trade Related Aspects of Intellectual Property

June 2004. Eighth Working Party meeting.

December 2004. Ninth Working Party meeting, with a commitment to move Vietnam's accession to the creation of Draft Working Party Report.

2.2. Policy coordination

Though the WTO accession process draws out a lot of resources of the conly part of a much broader process of development and poverty reductionaim at improving the well being for Vietnamese people. Other policy pillin the whole process include the Comprehensive Poverty Reduction and GrStrategy (CPRGS), the 10-year Socio-Economic Development Strategy, theplanning process, and the Public Investment Program of the governmeefforts take place almost in parallel and aim at the overall developmenUnfortunately, these different agendas seem not always consistent and suppeach other. This will be one of the key challenges in Vietnam's developmegeneral and WTO accession in particular. For example, a large amount offunding in the Public Investment Program is spent on manufacturing ansubstituting industries, which do not seem topromote export as an engine of growth. The 5-year planning cycle of differand the state sector as the whole pay undue attention to the potential WTOin the future. Unless this situation is corrected soon, Vietnam would riskresources and suffer efficiency loss in an unconcerted exercise tha

ountry, it is , which all

ars or toolsowth5-year

nt. All of these t goals.

ortive tont efforts inpublic

d importcreate jobs for poverty reduction or

ent sectorselements

waste huget barely fails to

achieve the development goals in an optimal way.

To correct the situation, the government starts to be aware of the importance of policy coordination and has plans to incorporate WTO implementation roadmap to the next 5-year planning process. This will make sure that any sectoral planning would take into consideration the impact of WTO implementation and its implications.

284

2.3. Consultation efforts

An important channel of communication between the government policy mthe business community is through the Vietnam Chamber of Comm(VCCI). Dissemination, awareness raising, and consultation on internationaintegration matters, WTO accession included, are conducted by VCCI forcommunity. One of the important regular activities facilitated by VCCI isBusiness Forum, which is held annually for the business representatives to mhave dialogue with the government on policy and other issues that may affect the

2.4. Legal reform

One of the huge tasks for Vietnam in preparation for WTO accession is in lreform. Vietnam had to review all of its laws and came up with a legislativamend existing laws or promulgate new laws that conform to WTO rules.legal documents or articles thereof that conflicted with WTO rules had tor eliminated. Since 2001, WTO related legislative agenda has becpart of the National Assembly's annual agenda. During the 2001-2004 pe40 legal documents, includinwith elements related to conformity with WTO rules (See Appendix 1). Thlegislative agenda will continue in 2005 and beyond to further align with trules and international practices.

With ras changes in the custom valuation rule, new decree on MFN, drafting of oon safeguarding and anti-dumping. Other legal issues identified as necessain legislative agenda yet, include rules on export subsidies, TBT, and domesupport.

A number of new laws and regulations related to tradpast few years to further liberalize Mode 4 of service supply (presence of npersons) for professional services such as legal and auditing services. Statein the telecom sector was significantly reduced and substantial competallowed in telecom infrastructure and value-added services.

Steps were started to develop the legal framework for protecting the inproperty right. Most of Vietnam’s commitments under the Bilateral Trade Awith the United States were covered by the TRIPS agreement. Vietnam hassignatory party to the Paris Convention, the Madrid Agreement, theConvention, the Patent Cooperation Treaty, and more recently the Berne Convention.The Civil Code had provisions on IPR protection, infringement, and remedgeneral. However, regulations governing different aspects of intellectual prrights are scattered in different legal documents. Therefore, the government is drafting

akers anderce and Industry

l the businessthe

eet and

business environment. This is a vehicle for the government to listen to the voice of the business community and to explain about government policies.

egale agenda toLaws and

o be amendedome a significant

riod, aboutg laws and ordinances, have been passed or amended

ehe WTO

egard to trade in goods, the future agenda will address important changes such rdinancesry, but notstic

e in services were enacted in theaturalmonopoly

ition was

tellectualgreementbeen

WIPO

ies inoperty

a new law on intellectual property, which is scheduled to be passed in the Fall meeting sesion of the National Assembly in 2005.

In terms of investment regime, efforts are going on to unify the Law on Foreign Investment and the Law on Domestic Investment Promotion, to amend the Enterprise Law, in order to address differences in treatment of foreign and domestic investors.

285

3. Key challenges

3.1. Negotiation challenges

Vietnam is in the negotiation process and receives a lot of pressure from thParty's

:

¶subsidies to agriculture,¶ transparancy and predictability of the¶ import bans and restrictions,¶pricing policies, e¶customs formalities and admin

customs valuation,¶ national treatment in trading rights,¶ national treatment in internal taxes.¶prohibited subsidies in the industrial secto¶effective enforcement of IPR protection¶ fair and predictable environment

or the 9th Working Party's meeting, the most recent one, more specific cone raised by particular members as follows:

¶ Taiwan was concernethe second largest investor to Vietnam. Therefore, Taiwan adiscrimination. Vietnam admitted the issue but pointed out some incentivesgiven for foreign investors.

¶ Switzerland was concerned more about intellectual property in inves

¶ Australia was concerned aboas state-owned enterprises, joint stock companies, and foreignenterprises, and asked for equal treatment for all. Australian side afor theproportion" in investment licensing

¶ The US was concerned about the discrimination in investment anpublicize and proclaim Vietnam's adjustments to the Working Party for advisory.

¶ The US also asked for ruling out of the "local content" and "exportforeign invested enterprises. If agreed, Vietnam wouldother members.

¶ Reportedly, some US businesses were not satisfied with the BTA ato reduce the time schedule for

e Workingmembers. Key concerns raised by other members throughout the negotiations

include

legal regime,

specially the dual pricing,istration, including the WTO-consistent

r,

for investment.

F cernswer

d most about the discrimination on investment, as it is sked for non-

tment

ut the discrimination among types of enterprises invested

lso askeddraft of Enterprise Law and required to phase out the rule of "export

d asked to

record" tohave to apply this to all

nd wantedmarket access by WTO. In the recent bilateral

negotiation, main focus was on conditions for market access of goods and services, in which services are the "hot point" of the negotiation.

¶ In fact, all requirements from the US side were mostly from the existing US businesses in Vietnam. Their opinions were collected by AmCham and the US Business Council to submit to USTR.

286

In October 2003, at the 7th Working Party meeting, Vietnam submittedtariff schedule and a new services offer. Action plans, including a generalaction plan, were also submitted on the implementation of tCustoms Valuation, Import Licensing, SPS, TBT, TRIMS, and TRIPS.

In late April 2004, at the 8th Working Party meeting, Vietnam submitWorking Party new paperwork including revised goods and services offertariff offer binds close to 100% of its tariffs in agricultural and non-agricultuVietnam's new services offer now includes many commitments equaVietnam has committed to in the VN-US BTA, as well as commitmentsareas not commitoverall legislation, and the Agreements on Customs Valuation, SPS, TBT, awere also submitted.

At the 9th Working Party meeting, Vietnam submitted to current WTO(mostly to Working Papproved by Vietnamese government, to industrial goods and 25.3% onproducts. (

its appliedlegislative

he WTO Agreement on

ted to thes. Its newral goods.

l to whatin service

ted to in the BTA. In addition, revised action plans for implementingnd TRIPS

membersarty) documents on commitment on tariff of 18.5%, which was

agriculturalwww.wto.org).

On top of the key issues raised by Working Party members, Vietnam is aoffer WTO-plus concessions, which are not implemented by the insisting Wmembers. Agricultural tariff is an example: Vietnam's latest offer is toagriculural tariffs at an average level of 25.3%, while Thailand and thewho are also members of the Working Party, have bound average tariffs iof 36% and 34%, respectively. Nepal was able to bind its agricultural tariaverage of 42% (Oxfam, 2004). Many of the requirements by WTOissues like agricultural subsidies, domestic support, etc. may go so far that iundermine Vietnam's development and poverty reduction efforts, if Vietnamaccept it. There are concerns that Vietnam may join the WTO not on tdevelopment terms, if members' requirements are to be satisfied.

While negotiation, as well as implementation, on goods trade issues are mto border measures like tariff and quantitative restriction, trade in serviceinvestment regulations are mainly related to the behind-the-border measures, or domestic institutions. This is a quite complex matter to deal with, as it touches upon the whole economic, political, and governance structure of the country. In tcontext, close link and cooperation between the government and the busiare essential to make sure that policies and regulations are consisteninvestment agreements and commitments.

Vietnam has concluded the Bilateral Trade Agreement with the Unitwhich was a big move in trade relasurge of Vietnamese exports to the US market. However, with regard tonegotiation, the threat is that many other member countries may ask for"multilateralization" the VN-US BTA concessions, which go beyond the Wrequirements . Therefore, Vietnam is facing a quite challenging demand while

lso asked toTO

bindPhilippines,

n agricultureffs at an

members on t risks was to

he pro-

ainly relateds and

hisness sector

t with trade and

ed States in 2001,tion with an important partner and resulted in the

WTOa

TO

considering its own development needs.

Given the complexity and dauntiness of negotiation challenges that Vietnam faced with, it is extremely important that negotiation efforts are fully informed with the country's status quo, institutional capacity to implement its commitments, the domestic industry competitiveness, and most of all its development objectives and theoverall strategy to achieve them. Moreover, government agencies involved in

287

negotiations have to closely coordinate and keep each others informed in thso that the terms they negotiobjective, rather than contradict.

The accession process is exacerbated by the doubled standards which go bexisting WTO agreements. At the same time, special and differential treatmcompletely identified. The accession is challengnot ready to enter into n

Box 2: The Partner Issues

eir efforts,ate are consistent with each others and with the overall

eyond theent is not

ed by the fact that some partners are egotiations (Box 2).

According to comments in the local media, for the bilateral negotiation with Japan, the twosides have yet to enter essential negotiations. Japan has put forth suggestions that Vietnamfound surprising, and too demanding. Japan side emphasized that WTO means strictregulations and rules, not just a place where countries shake hands. As expressed by ChibaAkira, Press Assistant to Japanese Prime Minister, "we understand that Vietnam seeks earlyaccession, but it is difficult to say how long it will take to complete this bilateral negotiationround", and "Japan fully support Vietnam's WTO accession, but in a way consistent with therules. Clearly, Vietnam needs to do more to accede". Before the ninth session, in Sept. 2004, the Japanese made a request that surprisesVietnamese negotiating team. Japanese side pressed the point that WTO is not an cooperationorganization but where each party act in favor of its own interest. Japanese official also noted that Japan is negotiating with Russia which could hopefully finalize in January 2004. After that Japan will concentrate to negotiation with Vietnam. This means Vietnam hardly continuethe bilateral negotiation with Japan due to partner's time and resource constrain. (Source: VietNamNet, 10/10/2004)

Another major challenge for Vietnam is its classification as a non-market economwhich would restrict Vietnam's access to international markets. ClassiVietnam would be in a disadvantaged position in dumping case investthis already happened in the past.

Last but not least, human capacity constraints are prom

for its own development in tsupporting tasks, which compete away a significant part of the valuable andresources available in the country.

3.2. Implementation challenges

Four major challenges are identified in the implementation by the goveVietnam:

First, the WTO accession to a large extent depends on economic reformscountry. Viet Nam has adopted a gradual approach of economic reform andto the market economy to ensure a stability and sustainability. At the samcountry should accelerate pace of WTO accession in order to become a ful

y,fied as such,igations. And

inent issue for the country in the whole negotiation and preparation process. The country needs human resources

he first place, and on top of that is for negotiation scarce

rnment of

inside thetransition

e time, the l member

in 2005. The gradual pace of the reform may affect the pace of the acession. The timeand resource constraints refrain from utilizing the accession to support policy-makingprocess inside the country. It may probably adjust some objectives and priorities ofthe reform. In addition, a good balance of costs and benefits of WTO accession usually requires a high level of coordination, a good knowledge of WTO issues, and professional qualifications of the policy-making institutions involved in the

288

negotiations. All of these factors should be intertwined with solid negotiaand experience in multilateral engagements.

Second, as a country in transition, the legal system is uncompleted. Itthorough review of existing laws and other legal acts in order to determineareas the laws are consistent or inconsistent. Based on this review, Vietnaaccelerate the legislation program in coming years. In on-going negoGeneva, Vietnam gave a list of laws and government decrees to fill the gacurrent legislation and the requirements of WTO agreements. The challenge lies in the complexity of law reviews, which usually take more time to complete. Thisis exacerbated by the limited capacity and resources of the institutions involv

Third, coordination between policy-making agencies on WTO issueschallenge. Vietnam’s system of interministerial coordination in WTOdescribed as a mixed form of coordinationcoordinating body,” “centralism,” and “decentralism” (Bui and Schmidt 2

ix canno

ü A loose implementation of legal rights due to the lack of relevant admstructure;

ü Insufficient knowledge about the requirements to adopt necessaryregulations in compliance with WTO agreements; and

ü An overlapping between governmental agencies in terms of new tasks,and structures.

Fourth, capacity gaps in interministerial coordination in WTO accesignificant. According to a research conducted by the Office of NCIECUNDP, all government agencies face capacity gaps such as: (1) lack of eWTO issues and negotiations; (2) a great need in practically all mintechnical training (including both professional and foreign language traininareas of trade in services and IPR protection are most difficult; (4) poor datfinancial services and investment; (5) ministries arto lack of information on foreign barriers; (6) greater public informatiintegration is essential to create grass roots support for it; and (7information on the social impacts of economic integration (andimplications of development). (UNDP and NCIEC, 2003).

For the economy of Vietnam, the biggest challenges to the econowithstand the open market and become competitive enough to reap the beliberalization and integreation. The long term benefits are obvious, but notshort term cost in terms of job loss, economic restructuring, and may be balpayment problem due to the import surge.

While WTO membership brings new market opportunities for exports, thopportunities by themselves will not be materialized without the country's efforts to tap on those new markets. To do so, there need to be great export pr

tion skills

requires ain which

m should tiations inp between

situationed.

is a bigissues is

of three components: “one special 001). This

m t help to solve three main existing problems:

inistrative

laws and

functions,

ssion arefunded byxpertise ofistries forg); (3) thea base on

e disadvantaged in negotiations dueon on economic

) the lack ofalso hidden

my are how to nefit of

withoutance of

e

omotion exercise to market Vietnamese products in foreign markets, to do research and gain knowledge about foreign markets to find the niche. And Vietnamese exporters so far have not really done much in this regard. Most products are still marketed through intermediaries without the producer's awareness about their end consumers. In this connection, unless the business community, especially exporters, do their home work in market research to be ready, new opportunities would simply bypass them.

289

Being new to the international trade practices, quite a few Vietnamese fifully understand the rules of the game. Many are unaware about WTO ruinternational agreements that Vietnam have signed, therefore wouldrules and pay the cost in their international transactions. To be reaimplementation, the business community, especially the small anenterprises,environment.

Despite all the good things that trade liberalization and integration can brinof higher efficiency and transparency, there are always losers in this prohelps. Help and compensation for the vulnerable groups that are affectedimplementation

and development.

4. Technical assistance

Vietnam received quite a lot of technical assistance fropreparation and the related issues (See Appendix 2). Most of the assistancecapacity building and policy making for government agencies and officials.assistance was offered to private sector or civil society sector.

In terms of research, the World Bank Institute provided support to the Natfor Social Sciences and Humanities (former name of Vietnam Academy oSciences) to conduct a forum on Vietnam's WTO readiness, and a survey omanufacturing industries (textile and garment, automobile, footwear) and s(telecom, transport, banking) to learn about how industries and service pready for the WTO accession. The telecom and maritime transport sectorsindicated that most firms are positive about WTO accession, though thstill highly monopolistic and protected. They believe that WTO implementaforce the currently protected state-owned enterprises to compete on a moreplaying field. However, firms are not fully aware of the WTO implications, and they have very limited access to information about the WTO process (Nguyen Chien Thang, 2003). The banking survey also shows the welcoming attitude amonwith regard to the WTO accession, seeing it as a good opportunity for nproduct development, and banks seem to have strategy in mind to cope witcompetitive environment (Dang Nhu Van, 2003).

With regards to IPR protection, Vietthrough the STAR project to help implement the Bilateral Trade Agreement. This project conducted many training activities and seminars to raise awareness astrengthen the capacity of law enforcement bodies in dealing with IPR issueothers. In addition, technical assistance was also offered by Switzerland andthe National Office of Industrial Property.

The WTO secretariat has provided limited technical assistance to Ministry o

rms do not les and/or

risk violate thedy for WTO

d mediumneed to be well informed about the rules and new competitive

g in termscess who needby WTO

will be a big part in any action plan of the government. This is to ensure social equity and stability, which are necessary for further economic growth

m various donors for its WTOis inNot much

ional Centerf Social f selectedervices

roviders aresurvey

ese sectors are tions willleveled

g bankersew market and

h the new

nam received assistance from the US government

nds, amongJapan to

f Trade ingiving advise in document preparation, in organization of workshop and training, Ministry of Foreign Affairs in setting up a reference center for WTO issues, The Ministry of Finance in designing and streamlining the tariff offer. Most of the assistance were provided on ad hoc basis. As an example, the WTO Deputy DirectorGeneral Yerxa, director and staff of Accession Devision have visited Viet Namrecently to work with WTO Negotiation team as an effort to provide technical

290

assistant from the Secretariat. The secretariat staff also provided assistancother donors program. Some v

e throughisits were assisted by the US-Vietnam Trade Council

Education Forum. (www.usvtc.org).

nd accession soountries.

tjectives.

gotiation andould be deeply motivated by its development objectives,

e and WTO

gendasrtynd policy

utually supportive, his is not

ectoral interests, represented by individual ministries or agencies, are ighly

terests thrive

businessin the more

. The strongest message to businesses would be the one that own good and

publicion or be

ral and the acceding

se about then and

l support can berned inility in

stancerch institutions

nment in the decision making process. The assessment can be done independently by the academics or by order of the government to address a specific need in policy making. In any case, there need to be a mechanism of information collection and provision from government departments to the research community or any information user, to facilitate research. Therefore,technical assistance for information publicity can be very helpful to research thatsupport government decision making.

II. Lessons for other developing countries

Based on Vietnam's experience in WTO negotiation, preparation, afar, some of the suggestions can be drawn as lessons for acceding c

First, the country or its leaders should be clear about its overall developmenobjectives, and WTO accession could serve as a means to achieve those obAnything the countries does in terms of preparation and support to the neimplementation afterward shto make sure the whole process is consistent and the development coursprocess are mutually supportive.

Second, for a developing countries in transitions with many different big aconducted at the same time, including domestic institutional reform, povereduction, and international integration, a top-down approach in decision amaking is necessary to make sure all of those are consistent and minstead of contradict and result in waste of resources and efficiency loss. Tan easy job, as snot always the same as the national interests. Therefore, a strong and hcommitted top political leadership is essential to maintain the national inin all action plans.

Third, efforts are needed from the government to send a message to thecommunity to inform it about where the country is and will be headingglobalized world economystrikes their own interests and incentivizes their involvement for theirthat of the nation as the whole. General dissemination and education for theand businesses without specific motivation would not attract much attenteffective in raising awareness.

And last but not least, technical assistance is needed from both multilatebilateral sources. Multilateral organizations are in a good position to helpcountry and the people involved with capacity, knowledge, and expertiaccession process, so that they can make informed decision in the negotiatioimplementation process for the best benefit to the country. Bilaterauseful in enhancing technical capacity for the institutions and people concevarious technical and legal aspects of WTO rules, its agreements, and flexibapplication. Impact assessment is another important area that technical assifrom any source will be helpful. This would be best conducted by reseaor think-tank to inform the gover

291

REFERENCES

Bui2001.

Dang Nhu Van, 'Are Vietnam's Banks Ready for the WTO?', 2003.

Hoang Phuoc Hiep, "Vietnam's policies on International Economic Integrationissues on perfectingThegioi Publisher 2004.

National Assembly, 'Resolution ... of the National Assembly on Legislative2003'.

National Assembly, 'Resolution ... of the National Assembly on Legislative2004

National Assembly, 'Resolution ... of the National Assembly on Legislative A2005

National Assembly, 'Resolution .... of the National Assembly on Legislative2002

National Assembly, 'Resolution .... of the National Assembly on Legislat2001'.

Ngo Duc Manh, WTO accession – challenges for Vietnam’s Administration anLegHochiminh City, 30 September-1 October 2004.

Nguyen Chien Thang, 'WTO readiness survey: Telecom and Maritime Trans2003.

Nguyen Ngoc Son, 'Vietnam: WTO accession process', 2003

Oxfam, 'Extortion at the gate. Will Vietnam join the WTO on pro-developmenOxfam Briefing Paper, Octob

Schmidt, U., 'Roadmap for Vietnam's Accession to the WTO', 2002.

U.S Vietnam Trade Council Education Forum, Catalog of LegPolicy Regime, , December 2004.

U.S Vietnam Trade Council,

Xuan Nhat and Uwe Schmidt: Interministerial coordination in WTO accession,

and somelegal system", in the book "Vietnam and process of WTO accession”,

Agenda in

Agenda in'.

genda in'.

Agenda in'.

ive Agendain

dislation, Presentation at the Training for Members of the National Assembly in

port Sectors',

.

t terms?',er 2004.

al Updates: Vietnam Trade

www.usvtc.org

UNDP and NCIEC: Capacity gaps assessment in economic integration, Hanoi, 2003

Vietnam's Communist Party, Resolution 07/NQ-TW dated 27/11/2001.

World Bank, 'Moving Toward 2010: Vietnam Partnership Report', 2004.

WTO, www.wto.org

292

Appendix 1: Laws passed and amended by Vietnam's National Assembly from 2001 in accordance w

001: Law on Customs (June 2001)

¶)

Ordinance on Lawyers Practice (August 2001) ¶ Ordinance on Fees and Charges (September 2001)

Ordinance on Advertising passed on 16 November 2001 and came intoof 1 May 2002;

Article

In 2002: Law on Amendment and supplement to the Labour Code passed on 2 A

and became effective as of 1 January 2003. ¶ Ordinance 40-2002-PL-UBTVQH10 on Prices (26 April 2002) ¶ Ordinance 41-2002-PL

may 2002) ¶

ds into Vietnam (25 May 2002) ¶ Ordinanc2002)¶ Law 02-2002-QH11 on Amendment of law on promulgation of Le(16 December 2002)

In 20 Ordinance 07-2003-PL-UBTVQH11 on priv

tice (25 February 2003);¶ Ordinance 08-2003-Pl-UBTVQH11 on Commercial Arbitration (2003);

Law 03-2003-QH11 on Accounting (17 June 2003); ¶ Law 04-2003-QH11 on Statistics (17 June 2003);

Law 07-20030QH11 on Amendment of Law on Value Added Tax (172003

Law 08-2003-QH11 on Amendment of Law on Special Sales tax (17 J Law 09-2003-QH11 on Amendment of Law on Corporate Income

2003);¶ Law 10-2003-QH11 on Amendment of Law on State Bank of Vie

);

ith WTO rules

In 2¶

Ordinance 36-2001-PL-UBTVQH10 on Plant Protection and Quarantine (25 July 2001¶

¶ force as

¶ Resolution of the National Assembly 51-2001-QH10 on Amendment numbers of s of the SRV‘s Constitution (came into effect from January 2002)

¶ pril 2002

-UBTVQH10 on MFN and NT in International Commerce(25

Ordinance 42-2002-PL-UBTVQH10 on Self-Protection in Import of Foreign Goo

e 43-2002-PL-UBTVQH10 on Post and Telecommunications (25 May

gal Documents

03:¶ ate Medical and PharmaceuticalPrac

25 February

¶

¶ June);

¶ une 2003);¶ Tax (17 June

tnam (17 June 2003¶ Ordinance 23-2003-PL-UBTVQH11 on Food Safety and Hygiene (26 July 2003) ¶ Law 13-2003-QH11 on Amendment of Law on Land ( 26 November 2003); ¶ Law 14-2003-QH11 on Amendment of Law on State Owned Enterprises (26 November 2003); ¶ Law 15-2003-QH11 on Commendation and Rewards (26 November 2003);

293

¶ 03);¶

Law 18-2003-QH11 on Amendment of Law on Co-operatives (26 November 2003);

In 2¶ to

¶ y Developed

e 16-2004-PL-UBTVQH11 on Livestock Breeds (24 March 2004); ¶ ended) (29

il 2004);¶ ns (15 June

¶ 004);¶¶ une 2004);¶ ent of and Addition to the Law on Protection,

;¶ gainst Subsidized Goods

04);

¶ Law on Publication (10 November 2004).

In 2005, the following laws are expected to be passed or amended:¶¶¶ ended)¶¶ etnam¶ nd implementation of international treaties ¶¶ nded)¶ )¶¶ ent Protection¶¶ Law on Intellectual Property¶ Law on Electronic Transactions¶ Law on Import and Export Tariff ¶ Anti-corruption Law ¶ Ordinance on Procedure of Settlement of Administrative Offences

Law 16-2003-QH11 on Construction (26 November 20 Law 17-2003-QH11 on Aquatic Products (26 November 2003);

¶

004: Ordinance 14-2004-PL-UBTVQH11 on Amendment of and AdditionOrdinance on Income tax on high Income Earners (24 March 2004); Ordinance 15-2004-PL-UBTVQH11 on Protection of DomesticallNew Plant Varieties (24 March 2004);

¶ Ordinanc Ordinance 18-2004-PL-UBTVQH11 on Veterinary Medicine (amApr Law 20-2004-QH11 on Amendment of Law on Credit Institutio2004); Law 21-2004-QH11 on Bussiness Bankruptcy (amended) (15 June 2Civil Procedure Code 24-2004-QH11 (15 June 2004); Law 23-2004-QH11 on Inland Waterway Transportation (15 J Law 25-2004-QH11 on AmendmCare and Education of Children (15 June 2004) Ordinance 22-PL-UBTVQH11 on Measures AImported to Vietnam (20 August 2004);

¶ Law on Competition (approved on 9 November 20¶ Law on Electricity (approved on 10 November 2004);

Law on Amendment of

Civil Code (amended)Commercial Code (amended)Maritime Law (amLaw on Medicines Law on Railways in ViLaw on signing, accession aLaw on State Auditing Law on Education (ameLaw on Customs (amendedLaw on TourismLaw on EnvironmLaw on Bank Transfer Means

294

295

+ Ordinance on Procedure of Settlement of ¶ Ordinance on Tendering

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