ntms affecting cambodia’s maize export to thailand · 1. overview •the two kingdoms have...

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








(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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25

Between 01 Mar to 30 Jun 2011


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


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


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,

30

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Through PWO from Nov to Jan 2013 with 150,000 tons for 0%


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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