WTO Benefits Slow In Coming, Farmers Should Look Elsewhere

Monday, December 25, 2006

Letter to the Editor
The Cambodia Daily

With Cambodia's accession to the World Trade Organization in October
2004, export gains were expected with Cambodia ranked as a Least
Developed Country. As an LDC, Cambodia receives trade incentives which
include duty-free, quota-free market access, tariff concessions and
liberalization concessions for exported products allowing Cambodia to
gain a possible foothold in the markets of developed countries.
Cambodia saw its WTO accession as a step towards global economic
integration in addition to increased benefits.

However, a booming trade in Cambodian exports, especially its
agricultural products, has not yet materialized. Cambodian goods are
confronted with various barriers imposed by developed countries. The
so-called European Union and US agricultural subsidies have harmed
Cambodian farmers to some extent. The health and safety standard
barriers have hampered agricultural exports too. Negotiations to
eliminate these barriers missed their deadline once again in April
2006. Three months later, the negotiation was announced suspended by
WTO General Council in July 2006 following a recommendation from WTO
chief Pascal Lamy.

Doha agenda talks were resumed following pressure from members in
November 2006. Yet, these talks are being held informally (as
recommended by Pascal Lamy) through which chairs of each negotiation
group arrange talks by themselves. In addition, the WTO has not set any
timeframes or deadlines. There is much speculation that it will take
years to conclude the Doha trade pact.

For Cambodia, Cambodian farmers cannot wait years for this development
agenda to be finalized and then receive benefits from this trade
negotiation. They need to improve their livelihoods through other
possible channels of export. Thus, with little possibility, at least in
the short run, in conquering developed markets, countries such as
Cambodia need to look elsewhere and trade more fervently with other
developing countries in the region.

Currently, Cambodia exports mainly unprocessed rice, corn and soya as
well as fish to Thailand and Vietnam. A potential alternative for
Cambodian agricultural products is to export processed goods to
regional developing countries such as China, South Korea, Taiwan,
Malaysia and Indonesia. Exporting to these regional partners allows
Cambodia to diversify its destinations which may lead to higher prices
than supplying neighboring markets.

All in all WTO is good for the long-term prospects of Cambodia's
agricultural exports. As Cambodian farmers cannot wait for this
long-term benefit, regional lucrative markets in East Asia are an
option.

Neak Samsen,
Phnom Penh

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