May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 1 Non-Tariff Measures Faced by Exporters: Experiences and Findings From Cambodia Dourng Kakada, Economic Institute of Cambodia (EIC) May 4 th,2006 Krabi, Thailand

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 2 Content Cambodian Export Profile Major Non-Tariff Measures Faced by Cambodian Exporters Case Study Conclusion

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 3 Cambodian Export Profile (1) Source: EIC, Compiled from various government and international organisation primary data Import of goods (%GDP) 24.3%47.7%61%65.3% Export of goods (%GDP) 6.4%35.9%48.3%50.7% Trade balance (%GDP) -17.3%-11.8%-12.7%-14.6%

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 4 Cambodian Export Profile (2) Cambodian merchandise exports are limited in terms of products………. Source: Custom and Excise Department

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 5 Cambodian Export Profile (3) ….. And directions of exports Informal exports still large in agricultural products! Sources: Custom and Excise Department and Ministry of Commerce

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 6 Major NTMs Faced by Cambodian Exporters Internal Constraints Low standard and SPS infrastructure Weak institutional capacity to respond to new trade regulations Major NTMs Standard Rule of Origin Conformity Assessment Sanitary and Phytosanitary (SPS) Measures

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 7 Case Study

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 8 Garment Garment products suffer from the EU’s criteria of rule of origin attached with EBA (Part II:F) –Lack of textile industry in the country –Fabrics and accessories mostly imported from China, Hong Kong, Taiwan and Korea which are not qualified for the rule –Buyers’ nominations EBA utilization rate: 63.3% Administrative hassles: –Cost: Official and Unofficial fees Unofficial fee for obtaining a certificate of origin equal to a salary of a garment worker/month

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 9 Rubber (1) Rubber not able to access to broader market access (Part III:B) –Cambodia is not a member of International Rubber Association Laboratory with qualified personnel and pre-requisite equipments Test participation in compliance with international standards Formation of Cambodian Rubber Association Exported to transit country for further processing and accreditation

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 10 Rubber (2) Products suffers from price discount –Rubber export is about 45,000 tons/year –Rubber price on average by June 2005 (by French Development Agency): Malaysia: US$1,343/ton Cambodia: US$1,150/ton (at Vietnamese border)

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 11 Rice Rice exports to China has been banned since end of 2004 (Part IV:B) –More required documents for risk analysis and assessment Local rice traders can not compete to buy and stockpile paddy rice at peak harvest time due to relatively high cost of capital (Part I:A) –Leading to informal exports to neighboring countries

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 12 Additional requirements imposed by China before export plants from Cambodia 1.Information about the plant and/or the product being tested including general name, scientific name, variety and class. 2.Information about the producing area of the product indicating the province, city and area, showing the product location on the national map with associated acreage. 3.Information about field management, growing and harvest times. 4.Information about pests and diseases involved including the general and scientific names, distribution, plants with parasites, harm-stricken parts of the plant, harm season, the supervision and inspection system, an impact statement on economy and biology. 5.Information of plant protection such as the method and effect of protection adopted, the description and frequency of chemicals used for protection. 6.Risk management measures for harmful plants including import & export inspection and quarantine law, processes and standards. 7.Information of the organization system of Inspection and Quarantine Bureau from central administration to local government, as well as its responsibility; the institution which is used as the inspection and quarantine lab is included. 8.Information of ongoing procedures, organisation relating to the Issuance of Certificate of Inspection and Quarantine, and a copy of the Certificate.

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 13 Fish Products Fish product exports to the EU have been banned since 1997 by European Commission’s decision 97/296/EC (Part IV:C) –Compliance with EC legislation, –Sanitary conditions in the production of fish products/live shellfish, – Hygienic conditions in production areas and in product handling, and controls such as physical inspection, –Inspection of HACCP systems and laboratory checks carried out by competent authorities In 2004 the EU banned imports of tuna and swordfish since Cambodia failed to respect international conservation law

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 14 Pharmaceutical products Industry has been noticeably growing in recent years Currently, one factory is exporting to a number of countries in Africa Unable to access broader markets and to join international bids due to lack of: –Good Manufacturing Practices (GMP) –Bio-equivalent study

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 15 Other agro-processing products (1) Confirel products unable yet to access Chinese markets due to “Certificate of Approved Labels for Foods” Certificate of origin Certificate of free sales Production process (description and diagram) Composition of formula Certificate of registered trade mark Certificate of free use of trade mark Certificate of Analysis Example of labels in Chinese

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 16 Other agro-processing products (2) Black pepper is not accessible to Japanese markets due to the requirement of a certificate of sterilisation

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 17 Other agro-processing products (3) Protein foods failed to export several times to the US and the EU due to lack of standard certificates such as ISO, GMP and HACCP

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 18 Conclusion Cambodian exports severely face NTMs No systematic records of NTMs in the country Careful consideration in FTA negotiation

May, 4 th 2006 Workshop on Non-Tariff Measures in the Asia Pacific 19 Thanks for Your Attention!