MoC responds to UN study citing negative RCEP impact on revenue

MoC responds to UN study citing negative RCEP impact on revenue

An official from the Ministry of Commerce said the Regional Comprehensive Economic Partnership agreement (RCEP) will definitely open up opportunities for Cambodia.

He was speaking in response to a report released by the United Nations Conference on Trade and Development (UNCTAD) citing potential serious negative effects of the RCEP.

Penn Sovicheat, undersecretary of state for the Ministry of Commerce, said Cambodia will implement the plans outlined in RCEP, including country of origin rules, tariff reductions, intellectual property, e-commerce rules, privacy rules, data localisation requirements and liberalisation of financial services.

He added Cambodia set the national interest as first priority in agreeing to the level of commitment and obligations in the agreement. These include a transitional period of up to 20 years, as well as other special and differential treatments that ensure the Kingdom will be able to fully implement the agreement’s obligations after its ratification and implementation.

“Because many RCEP provisions are voluntary or vaguely worded, we believe that there will be a chance for Cambodia [and] others in the region to find possible [timeframes] for refining [the] real opportunity to be competitive enough to effectively implement them. We believe that our long- and medium-term trade strategy will help us to achieve a better future for our economy,” he added.

RCEP was signed virtually by its 15 participating countries in November 2020, but has only been ratified by China and Thailand. The text of the RCEP agreement consists of 20 chapters covering trade in goods, trade in services, investment, e-commerce, intellectual property, govern¬ment procurement and competition.

Cambodia is still completing internal procedures to enable the agreement to be ratified. The necessary translation of the documents from English to Khmer has been completed so they can be sent on to the Council of Ministers for checking and approval before being being presented to the National Assembly. The full ratification of the RCEP by Cambodia is projected for the second half of 2021, according to the ministry of commerce.

That new study, by UNCTAD, posited that a number of ASEAN countries will face significant tariff revenue losses as the regional comprehensive economic partnership (RCEP) comes into force upon its ratification and implementation.

Called, “RCEP: Goods Market Access Implications for ASEAN”, the study was released at a virtual conference held last week and includes new findings by Rashmi Banga, a senior economic affairs officer of UNCTAD.

It indicates that under RCEP, a number of ASEAN member nations will face significant losses in tariff revenue and that overall, the trade agreement is likely to damage economic prospects and the ASEAN region’s financial capacity at a time when governments need it most to pull themselves out of the pandemic induced crisis.

Among its most damaging findings was that Cambodia’s potential revenue loss would be equivalent to 1.24 percent of the Kingdom’s 2019 GDP. That number equates to the entire public health expenditure of the nation. Khmer Times