NTMs Affecting Cambodia’s Maize Export
to Thailand
UNCC, Bangkok
26-27, Apr 2017
Presented by KHOV Ea Hai
1
Research Team
• KONG Ratha
• Uy Rithymony
• KHOV Ea Hai
• SLOT Liyean
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CONTENT
1. Overview
2. Objective of Research
3. Methodology
4. Trend in Maize Production
5. Analysis on Thailand’s Regulations on Maize Trade and It’s NTM Classifications
6. Policy Recommendations
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1. Overview
• The two kingdoms have enjoyed a strongly friendship and partnership throughout the diplomatic relations, political cooperation and cross-border trade.
• On the cross-border trade, due to the different stages of countries’ development and implementing trade policies, it has maintained a huge imbalance of trade between Cambodia and Thailand so far.
• In 2015, Cambodia has imported goods from Thailand with the trade value of USD 4,881 million, while Thailand has imported from Cambodia only in the amount of USD 638 million (UN COMTRADE, 2016)
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• For trade in goods, all ASEAN Member States, including Cambodia and Thailand, are bound by ASEAN Trade in Goods Agreement (ATIGA) on a wide range of obligation for regional trade liberalization and trade facilitation.
• ATIGA has significantly consolidated provisions from Common Effective Preferential Tariff for ASEAN Free Trade Agreement and provided comprehensive coverage of commitments, including the tariff liberalization, removal of non-tariff barriers, application of non-tariff measures, and etc.
• ATIGA entered into force on 17 May 2010
• The incidence of NTMs on Cambodia’s maize export to Thailand significantly broke out in 2011, when the people went down the street demanding government to interfere for market access.
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2. Objective of Research
Maize product (HS Code 1005)
To fill the knowledge gap on the practical NTMs affecting on Maize
To identify different NTMs faced by Cambodia’s exporters to Thailand’s market
To seek for better trade liberalization mechanisms with regard to NTMs utilization
Question of Research:
What kind of NTMs have been imposed on Cambodia’s maize export to Thailand?
How do NTMs imposed by Thailand affect on maize export from Cambodia?
What can be done by Thailand and Cambodia?
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3. Methodology
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Reviewing publications
Interviewing line-ministries
Interviewing representatives of traders
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Interviewing line-ministries
Ministry of Commerce Ministry of Agriculture, Forestry
and Fishery Ministry of Economy and
Finance
Regulations Productions ATIGA
Collectors/distributors and Farmers:
• Ms. Hour Vanny in Pailin (016554999)
• Mr. Chea Kao in Battambang (011333399)
• Mr. Hor Heang in Pursat (092225936)
• Mr. Som Yin in Banteay Meanchey (012688810)
• Mr. Hor Thyda in Kampong Cham (012390298)
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- We use i-Tip to examine the current imposing NTMs on Maize Products
imported into Thailand.
- We also use the UNCTAD International Classification of Non-Tariff Measures
(2012 version) for classifying the NTMs which exits in legal documents in order
to see the practical frequency of NTMs and number of different NTMs
incidences.
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4. Trends in Maize Production in Cambodia
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Map of Maize Production in Cambodia
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Maize yield 5.4 tons/h higher than the average 4.3 tons/h
Trends in the Area of Maize Production
Trends in the Maize Production
Source: ACIAR, 2016 13
Changing Cropping Pattern in Pailin
Source: ACIAR, 2016 14
Cambodia’s Major Exporting Markets for Maize
Source: Extracted from UN COMTRADE Database 15
FAO, Country Brief, Cambodia 2016
Cambodia
Cereal
Production
2011-2015
average
2015 2016
forecast
Change
2016/2015
000 tons percent
Rice (paddy) 9,224 9,335 9,500 2
Maize 709 400 750 88
Total 9,933 9,735 10,250 5
(Source: FAO/GIEWS Country Cereal Balance Sheets)
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Maize Planation Period Annually Cambodia Crop Calendar
J F M A M J J A S O N D
Maize
Rice
(Dry
Season)
Rice
(Main Wet
Season)
Sowing
Growing
Harvesting
(Source: FAO/GIEWS, 2016)
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Maize Exports to Thailand from 2008 to 2015
Year Trade Flow Reporter Partner Commodity
Code Trade Value (US$)
Net weight
(Kg)
2008 Import Thailand Cambodia 1005 31,834,970 310,966,969
2009 Import Thailand Cambodia 1005 8,876,142 95,733,296
2010 Import Thailand Cambodia 1005 25,973,758 224,742,232
2011 Import Thailand Cambodia 1005 3,869,026 28,324,600
2012 Import Thailand Cambodia 1005 6,107,076 44,738,950
2013 Import Thailand Cambodia 1005 9,419,381 65,412,000
2014 Import Thailand Cambodia 1005 3,810,405 27,220,128
2015 Import Thailand Cambodia 1005 2,451,758 20,326,000
(source: UN Comtrade Database, accessed in 2016) 18
5. Analysis on Thailand’s Regulations on Maize Trade and Its NTM Classification
19
20
•Ministry of Commerce' s ministerial notice to
determine import fee of maize, fish meal and
soybean meal (issue 19), 1998
•Ministry of Commerce's ministerial notice on
importation of maize for being ingredient of
animal feed under ASEAN Free Trade Area
Agreement, 2015
(Source: i-TIP, 2017, HS Code 10059090)
Thailand’s Measures Imposed on Cambodia’s Maize
Member
imposing
NTM
Code
In
force
Summary of Measure description National Legal Basis
Thailand F69 1998-
01-01
Import of maize will be charged special fee
for protecting domestic industry.
For maize imported from members of WTO
or GATT (1947) be charged 180 baht per
metric ton for quantity above tariff quota.
Moreover, it has exemption for imports of
maize and soybean meal from ASEAN
countries with certificate of origin according
to Ministry of Commerce's ministerial
notice for imports of maize and soybean
meal under ASEAN Free Trade Area
(AFTA), 2003.
Ministry of Commerce' s
ministerial notice to determine
import fee of maize, fish meal
and soybean meal (issue 19),
1997
21 F69: Additional Charge; O: Rule of Origin
Member
imposing
NTM
Code
In
force
Summary of Measure description National Legal Basis
Thailand C3 2015-
01-01
Maize need to be imported through
specified port of customs being port of
plant inspection and port of confining
animal.
Ministry of Commerce's
ministerial notice on
importation of maize for being
ingredient of animal feed under
ASEAN Free Trade Area
Agreement since 2015-2017
Thailand H11 2015-
01-01
For maize having origin and exporting
from member under AFTA, importer can
be Public Warehouse Organization (PWO)
or other importer
For PWO, they need to import between1
Jan -31 Dec of each year by making
purchasing plan corresponding to
domestic situation
For other importer, they can import
between 1 Feb - 31 Aug of each year
Ministry of Commerce's
ministerial notice on
importation of maize for being
ingredient of animal feed under
ASEAN Free Trade Area
Agreement since 2015-2017
22 C3: Specific Port of Customs; A84: Inspection Requirements; H11: State-Trading Enterprise; F5: Seasonal Duties
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Through PWO from 1 Jan to 31 Dec 2015
Through other importer from 1 Mar to 31 Aug 2015
Cambodia Maize Plantation Calendar
NTMs Imposed by Thailand, on 20 Feb of Buddhist Calendar Year 2554 (2011)
Article NTMs Requirement UNCTAD Measures Name
Art. 3 Product shall be certified by the authorities of
government agencies
A81 Product Registration
Requirement
Art. 3.(3) & 4.(1) Certificate of Origin (form D) and other letters O Rules of Origin
Art. 4.(1) Import shall be between 01 March and 30 June
of Buddhist Calendar Year 2554
F5 Seasonal duties
Art. 4 (2) Shall import through the Customs Post, which
consists of Plants Inspection and Animal
Inspection or inspected authorized authorities
A84 Inspection Requirement
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Between 01 Mar to 30 Jun 2011
Cambodia Maize Plantation Calendar
Non-Tariff Measures Imposed by Thailand, on 28 Feb 2011
Article NTMs Requirements Measure Name
Art.1, 2, 3, 5 & 6 Requirement for Certificate on Maize for enjoying rights to
full or partial exemption of taxes under AFTA
Certificate is only valid for a month and not exceed 30 June
2011
Certificate only issues between 03 March to 10 June
according to the quantifies requested
A83 Certification Requirement
Art. 2.(1), 3 Importer has to be registered before they can import A15 Registration requirements for
Importers
Art. 4.(3) Certificate of Origin O Rules of Origin
Art. 5 Lower rates apply for certain period time and higher rates
are charged on imports which exceed this period
Certificate will be issued according to the quantifies
requested
E23 Temporary,
E6 Tariff-rate quotas,
F5 Seasonal duties
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Between 03 Mar to 30 Jun 2011
Cambodia Maize Plantation Calendar
NTMs Imposed by Thailand, 2012
NTMs Requirements Measure Name
Maize shall go through Public Warehouse for a whole
year of 2012
H11 State-trading enterprises,
for importing
Other importer shall be between 01 March 2012 and 31
July 2012
F5 Seasonal duties
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Through other importers between 01 Mar to 30 July 2012
Cambodia Maize Plantation Calendar
Through PWO from 1 Jan to 31 Dec 2012
NTMs Imposed by Thailand, 2013
NTMs Requirements Measure Name
Maize shall go through Public Warehouse
Certain period from Nov 2012 to Jan 2013 and
certain amount with 150,000 tons for 0%
In Aug 2013 with 100,000 tons for 0%
H11 State-trading enterprises, for
importing
F5 Seasonal duties,
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Through PWO from Nov to Jan 2013 with 150,000 tons for 0%
Cambodia Maize Plantation Calendar
Through PWO in Aug with 100,000 ton with 0%
Graph of Maize Export to Thailand
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Source: Extract from UN Comtrade Database
Year Non-Tariff Measures Trade Value Net Weight
2008 … 31,834,970 310,966,969
2009 … 8,876,142 95,733,296
2010 … 25,973,758 224,742,232
2011 Between 3 March 2011 and 10 June 2011 according to the quantities requested in order to
receive 0% under the ATIGA;
Lower rates apply for certain period time and higher rates are charged on imports which
exceed this period
Product shall be certified by the government agencies
The certificates issued are valid for a period of one month from the issuing date and may
not exceed 30 June 2011
3,869,026 28,324,600
2012 Importation can be done for a whole year if go through Public Warehouse Organization
If go through other importers, the period of importation shall be between 01 March 2012
and 31 July 2012
6,107,076 44,738,950
2013 Importation goes through Public Warehouse Organization
Quantities of maize importation are set to 150,000 tons during Nov 2012 to Jan 2013 and
100,000 tons during Aug 2013 at 0% import duty
9,419,381 65,412,000
2014 Similar to 2013 3,810,405 27,220,128
2015 For maize having origin and exporting from member under AFTA, importer can be Public
Warehouse Organization (PWO) or other importers
For PWO, they need to import between1 Jan -31 Dec by making purchasing plan
corresponding to domestic situation
For other importers, they can import between 1 Feb - 31 Aug
2,451,758 20,326,000
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6. Policy Recommendation
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What Cambodia did
•Cambodian government has encouraged farmers to shift their crops to grow something beside maize.
• The issue was brought into the CCA Meeting (Coordinating Committee on the Implementation of ATIGA) for ASEAN internal , and was discussed also in MLE Meeting (Meeting of Legal Experts) consultation.
•Up to now, it still remains as the long-standing in the CCA’s agenda.
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•We found that Thailand did not notify its measure in which it demands to do so under the Art.11 of ATIGA, stating that any imposed measure shall be notified to SEOM and ASEAN Secretariat at least 60 days before such measure is to take effect.
•Until now, Thailand has not notified measure to SEOM and ASEAN Secretariat.
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The Public Warehouse Organization (PWO) was established by the Royal Decree in 1955. PWO is the state-enterprise under the authority of
Ministry of Commerce, with the purpose of more flexibility in operations and efficiency as private sector. The objectives of the operation was set as to carry out
all activities related to rice, agricultural and other products to ensure that their quantity, quality, and price are appropriate to the public which was agreed by the government.
- History of Public Warehouse Organization (website, accessed in 2016), Ministry of Commerce, Thailand
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•PWO is believed to become the effective instrument in terms of NTMs utilization from technical and non-technical NTMs to administrative obstacles in the high level of intervention from Thai government for the protection of domestic farmers and stabilizing price as stated in its purposes.
•Along with the certain limitation of period for trade at the first stage, and later allowed only through PWO or with conditions for receiving preferential tariff, these NTMs become restricted measures for trade in feed maize between Cambodia and Thailand.
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Firstly, the quantitative restrictions and similar limitation
shall not be used.
For instance, In 2011 as stated in the article 5 (Appendix
2): “The Department of Foreign Trade will issue certificates
for the cases of importation of the corns used as cooked
feed for animals between 03 March and 10 June 2011
according to the quantities requested.”
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Secondly, the application of NTMs shall be implemented in the legitimate
purposes.
It can be achieved by reviewing the role of PWO on its intervention on price
control.
This is because the intervention from the government would only distort free
market and increase more costs for trade and end consumers.
The price of maize could have a direct effect on the competitiveness of meat
products because it accounts for largest share of input costs up to 70% of the
production cost of meat, eggs, poultry (Agriculture and Agri-food Canada, 2009).
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Last but not least, unnecessary NTMs shall be also streamlined, or the
Mutual Recognition Agreement between Cambodia and Thailand need to be
considered as well in the purpose of promoting for better trade.
The best way is to harmonize or to conclude the Mutual Recognition Agreement on
certain agricultural products between the two countries.
Recognizing one another’s conformity assessments, standards and procedures,
reducing regulatory impediments to trade in goods, and introducing the
equivalence platforms for smoothing the free flow of trade
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THANK YOU!!!
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