Cambodia

The Trade Policy Review Mechanism (TPRM) was first established on a trial basis by the GATT contracting parties in April 1989. The Mechanism became a permanent feature of the World Trade Organization under the Marrakesh Agreement which established the WTO in January 1995.

Since 2011, Cambodia’s real GDP growth has been strong, averaging over 7% annually. Construction, manufacturing (mainly garments exports) and, to a lesser extent, tourism-related services, have been the drivers of growth. Economic growth has been inclusive and widespread, resulting in declining inequality and poverty levels. Prudent macroeconomic management has resulted in moderate inflation, a stable exchange rate, relatively low unemployment, and manageable external debt levels. However, the informal nature of a large portion of the Cambodian economy, which is largely based on services followed by agriculture, implies that GDP is significantly underestimated, and that it undermines the effectiveness of government policy.

The second Trade Policy Review of Cambodia has offered us a good opportunity to deepen our understanding of recent developments, the achievements and challenges related to Cambodia’s trade, economic, and investment policies. Cambodia plays an important and a valued role in the WTO as a Member of the LDC group that has strived for the group’s better integration into the multilateral trading system. The more than 147 advance written questions submitted by 14 Members and the 24 delegations that took the floor underline the importance attached to Cambodia’s trade and investment policies and practices.

Border checkpoints in developing countries often teem with traders transporting small quantities on foot or pushing carts alongside trucks that sport the insignia of formal companies. Those small-scale, cross-border traders may eventually be superseded by larger import-export firms. But during the process of development, their trade may be a valuable avenue for poverty alleviation and women’s empowerment. This chapter focuses on the latter in the context of small-scale, cross-border trade in Cambodia and Lao People’s Democratic Republic (Lao PDR). It analyzes recent survey research undertaken by the World Bank and draws conclusions about the key policy implications for facilitating the poverty-reducing impact of women’s participation in small-scale, cross-border trade.

Cambodia has been classified by the United Nations as a least developed country (LDC). Its population is growing rapidly, and reached roughly 15 million in 2016, 77% of which live in rural areas, while 13.5% live below the poverty line. Cambodia maintains an open economy, and depends heavily on exports as a source of growth of gross domestic product (GDP) and employment. International trade and related investment are thus central to the Government’s efforts to raise the incomes and welfare of Cambodians. The international trading regime managed by the World Trade Organization (WTO), regional trading arrangements centered on the Association of Southeast Asian Nations (ASEAN), and the various generalized system of preferences (GSP) programs of WTO members, shape the external environment in which Cambodia pursues its development objectives.