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RCEP E-Commerce Provisions and What They Mean for Cambodia

2 November 2021

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Jakarta, 2 November 2021: With the Regional Comprehensive Economic Partnership (RCEP) set to come into force in January 2022, the agreement's e-commerce provisions will play a crucial role in facilitating trade digitalisation and cross-border trade, of particular importance for Cambodian MSMEs. These themes were addressed during the first Public-Private Dialogue in the new Unpacking the RCEP Agreement series. Focusing on The RCEP E-commerce Provisions and What They Mean for Cambodia, it was organised by ERIA's Capacity Building Programme and co-hosted by Cambodia's Ministry of Commerce. With over 100 participants, this Dialogue was an opportunity to discuss the benefits and challenges of the e-commerce provisions with the private sector, alongside government and trade experts.

In his opening comments, HE SIM Sokheng, Secretary of State, Ministry of Commerce, highlighted the importance of this Dialogue as a platform to share insights between the public and private sectors. He noted that RCEP will be a foundation for trade and investment in the region and has the potential to foster employment in Cambodia. He also highlighted the establishment of the Cambodia trade e-market platform which supports MSMEs to increase cross-border business opportunities through e-commerce.

Mr Andreas Zurbrugg, Deputy Ambassador of the Australian Embassy in Cambodia, in his welcoming comments, noted the benefits of RCEP including the harmonisation of rules of origin through a single set of rules and procedures for traders whilst promoting a robust regional supply chain. He noted that RCEP will contribute to a safer and robust digital economy. Australia's commitment to the region can be seen through its new regional trade development initiative, valued at USD 24 million, which assists eligible ASEAN Member States (AMS) to implement RCEP, in addition to its new flagship bilateral economic programme for Cambodia to promote economic diversification and economic resilience.

The Public-Private Dialogue was divided into three sessions:

Session 1: Setting the Scene: The RCEP E-commerce Agreement and Cambodia's Work Plan for Its Implementation

HE SOK Siphana, Senior Advisor to the Royal Government of Cambodia, stated that in the Cambodian context, the RCEP e-commerce provisions are suitable especially for young entrepreneurs. However, he added that it will take time for the benefits to be seen as the domestic regulatory framework needs to align with RCEP. He also noted that although the e-commerce chapter needs further elaboration on data protection, the agreement will promote new opportunities and investment.

Dr Deborah Elms, Executive Director of the Asian Trade Centre, highlighted three issues that need to be developed further: data information flows, data localisation and the customs moratorium. However, trade in goods e-commerce will still benefit from tariff cuts. In her opinion, RCEP can create new business opportunities, but the full benefits will be delayed as not all AMS have yet ratified the agreement.

Ms SRENG Nearirath, Deputy Head of Banking and Finance Practice Group, DFDL Mekong, Cambodia, focused on the regulatory environment. She spotlighted fintech and payment getaway as the services in demand, but noted weaknesses around data protection for robust e-commerce development. She went on to discuss actions needed to apply for the mandatory e-commerce licenses and permits, adding that the e-commerce regulations adopted in 2019 is still generally aligned with RCEP.

Session 2: Private Sector Perspectives on Opportunities for Cambodia in RCEP

CHEA Langda, Founder and Chief Executive Officer of BookMe Bus observed the growth in digitalisation in Cambodia, especially during the COVID-19 pandemic. With the recently established travel bubble and plans to unlock tourism in Cambodia, there are good opportunities for MSMEs in Cambodia to tap into the growth offered by digitalization. He noted that in the transportation and tourism sectors, shifting consumer behaviour is seen by the use of online applications for local transportation. He also discussed how technology could promote innovation by utilising e-commerce platforms for providing logistic services, and the importance of the public-private partnerships instruments.

LCT CHEA Ratha, Vice President of the Cambodia Women Entrepreneur Association (CWEA) stated that women-led enterprises are a majority of Cambodian MSMEs, but women tend to lack access to market, technology, and information. Responding to this, CWEA has a '3E' strategy: Engage, Equip, Empower. This involves engaging women-led enterprises, equipping them with technology skills to transform their digitalisation, and empowering women with knowledge and skills. She highlighted the importance of investing in women as an opportunity, not a charity. She also mentioned some programme initiatives led by CWEA by implementing the principle of collaborative approach.

PRAYAG Chitrakar Country Manager of DHL Express (Cambodia) Ltd. shared how DHL has provided cross-border trade facilitation through shipment services and customs facilitation. He discussed the importance of public-private partnerships to enhance cross-border trade in Cambodia, highlighting DHL initiatives that focus on B2C to support Cambodian SMEs in cross-border trade facilitation. He also described DHL's efforts to provide lower value shipment and de minimis threshold in order to provide seamless cross-border trade facilitation in Cambodia.

Kenneth Tang, of Auscham Cambodia and Managing Director of Dynamic Technologies, shared his views on the cross-border market in Cambodia, emphasising three emerging business sectors in Cambodia: tourism, e-commerce and manufacturing. He discussed strategies on how to increase venture capital in Cambodia relating to labour costs, the growing middle class, and technology awareness amongst Cambodians.

Session 3: Discussion on Bridging National Interest and Global Trends

H.E. DG RATH Saravuth of the General Directorate of International Trade, Ministry of Commerce, stated that the e-commerce provisions of RCEP offer opportunities for cross-border trade amongst participating countries. RCEP will foster Cambodian e-commerce by providing a framework for consumer protection and data protection. He also noted that government assistance to enhance the capacity and competitiveness for MSMEs and start-ups is a priority, as well as sharing thoughts around the existing policy framework to support and to facilitate the private sector and MSMEs in regional trade and resilient global-value chain.

Mr MOM Varin, Vice-President, Cambodia E-business Association and CEO, AngkorStores.com, stated that RCEP will foster Cambodian e-commerce development as the stakeholders feel protected under the regulatory structure. He highlighted the importance of facilitating MSMEs to use e-commerce in order to expand their market businesses. He also noted the importance in providing better understanding to all of the stakeholders in e-commerce to optimise RCEP's potential benefits.

Mr Anthony Samson, Second Secretary, Australia Embassy, discussed the benefits of RCEP to Australia in expanding their business development trajectory. He noted the importance of investment in ICT infrastructure so that Cambodia profits from digital transformation. He mentioned Australia's commitment to promote the MSMEs development to tap in digital economy through several programme initiatives in partnerships for instance with the Cambodian Ministry of Commerce for the E-commerce Aid for trade fund and ERIA's capacity building programme. He stressed the importance of ensuring fair and competitive business sectors to enter the digital market, in which RCEP plays a crucial role.

Mr Sven Callebaut, International Trade Consultant for ERIA's Capacity Building Programme moderated Sessions 1 and 2, with Mr Danny Burrows, Founder and Principal of TradeWorthy Ltd. moderating Session 3. Mr Jeremy Gross, ERIA's Director of Capacity Building of ERIA was the host of the Dialogue.

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