Cambodia and its RCEP Accession

Introduction

The 19th Asean meeting, which took place in November 2011, saw the introduction of the Regional Comprehensive Economic Partnership. In November 2012, in Cambodia, at the 21st Asean Summit, the RCEP discussions were launched. Now, by November 2019, all involved nations hope to have a pact finalised and signed. Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam, China, Japan, India, South Korea, Australia, and New Zealand are Asean members as well as FTA partners.

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Together, the 16 nations involved in the RCEP negotiations represent about half of the world’s population and a third of the global GDP, with China and India’s combined GDPs accounting for more than half of that total. By 2050, the predicted $0.5 quadrillion worldwide (GDP, PPP) may be accounted for by half of the global economy as a whole thanks to the RCEP. By integrating 16 nations’ markets, the Regional Comprehensive Economic Partnership (RCEP) aspires to make it simpler for each nation’s goods and services to be available throughout the region. Trade in goods and services, investments, intellectual property, dispute resolution, e-commerce, small and medium-sized businesses, and economic cooperation are the main topics of discussion during the negotiations.

In terms of its market access to domestic and international operations, Cambodia is one of the most forward-thinking Association of Southeast Asian Nations (ASEAN) Member States. On November 15th, 2020, Cambodia completed the Regional Comprehensive Economic Partnership (RCEP), the largest free trade agreement, which included 10 ASEAN members and 5 additional regional nations with which ASEAN already had free trade agreements in place.

In terms of its industrial revolution, Cambodia is also in transition and changing its economy into a lower middle-income growth economy. With a share of approximately 30% in the GDP, the manufacturing sector is expanding at an average rate of 11.9%, services are increasing at an average rate of 8.1%, and agriculture contributed 25% of the GDP in 2017 with an annual growth rate of 3.8%. The government’s free and open economic and trade policies have been a major contributor to the growth of the Cambodian economy. One of ASEAN’s most liberal and open economies is Cambodia. When it comes to trade and foreign direct investment, the economy adopts an open economic policy.

In manufacturing activities, the textile and garment sector remain the dominant sector, accounting for a major part of production and export activities. The other key manufacturing activity is in the food, beverage, and tobacco sector, which maintains economic activity of around 10%.

Changes facilitated by the RCEP

The RCEP agreement gives Cambodia the chance to implement structural change in its economy and diversify away from more specialised textile and apparel exports. According to a revealed comparative advantage (RCA) analysis for China, Japan, and Korea (CJK), Cambodia sells consumer final goods to CJK that require a lot of labour to “cut, manufacture, and trim” for exports of clothes. The garment and export business in Cambodia must create more useful service activities including branding, marketing, and sourcing in order for it to advance up the value chain. The RCEP offers a chance to expand agricultural exports in terms of production, processing, and exports. Key to Agri-production and exports are the value adding activities in key agricultural services, such as branding, marketing, warehousing, and storage, that allow for the movement of agricultural products to key destinations.

The RCEP provides the framework to harmonise trade laws and promote the adoption of best global trade facilitation practises. Non-tariff measures (NTMs) advocate for more open customs policies and practises to facilitate trade for RCEP member nations. The Regional Comprehensive Economic Partnership (RCEP) also offers a framework for technical standards and rules for improved and more transparent regulatory frameworks for regional commerce. For the past 20 years, trade liberalisation through reduced tariffs has been a crucial factor in boosting commerce and investment in the region. Growing non-tariff barriers are a hindrance to regional trade and investment, according to recent evidence. In fact, the use of NTMs often goes beyond the primary goals of assuring safety and health, the provision of public goods, and the preservation of the welfare of humans, animals, and the environment, making it more complex and challenging to administer.

By accelerating the adoption of digital technologies, increasing regional connectivity in hard and soft infrastructure, and fostering the growth of small and medium-sized enterprises (SMEs), the Regional Comprehensive Economic Partnership (RCEP) is anticipated to bring about structural transformation in the region. It will also enable stronger investment activities and commitment in the East Asia region. The RCEP agreement’s liberalisation of the services sector will have a substantial impact on Cambodia’s service sector growth and services trade.

Impact on the IPR Regime

As a major regional free trade agreement (FTA), the RCEP includes provisions that take into account recent developments in intellectual property, demonstrating the diplomatic success of ASEAN in advancing IP protection above and beyond the level of the TRIPS Agreement in areas like technological protection measures and enforcement in the digital environment.

The Agreement’s IP Chapter makes ratification of important international IP treaties and any ensuing modifications or revisions necessary. Four of the seven accords already have Cambodia as a party. Cambodia reaffirms its dedication to upholding the necessary regulations that mandate that its central government utilise only non-infringing software. Additionally, it requires Cambodia to maintain online databases with data on applications and registrations for patents, industrial designs, and trademarks.

Most of the provisions in the Law on Copyright and Related Rights from 2003 are similar to those in the RCEP, including the acknowledgment of the exclusive ownership rights of the original creator, the categories of works/creations, and the creation of collective management organisations. The RCEP Agreement’s GI provisions are compliant with the Law on Geographical Indication (2014). A GI is a label placed on goods with a geographic origin and a quality, reputation, or other attribute associated with that location. The criteria for recognising patents, utility models, and industrial designs are the same under the RCEP as they are under the Law on Patents, Utility Models, and Industrial Designs of 2003.

Conclusion

The ASEAN and ASEAN LDCs are anticipated to be significantly impacted by RCEP. It is anticipated to have a favourable effect on the Cambodian economy in particular. Both in manufacturing and services, Cambodia’s progressive market-based reforms have been successful in bringing the country closer to the next stage of prosperity. In order to achieve further regional integration within the RCEP framework during the post-pandemic recovery, Cambodia must continue its progressive market-based reforms. The RCEP offers the chance to implement significant structural changes in domestic industries to move toward greater value-added activities. Reforms to the ROOs in the RCEP will particularly speed up such important efforts in the area. Strong human capital as well as a competent and semi-skilled labour force are the driving forces behind higher value-added activities. Cambodia needs to improve the skills of workers to more technical and vocational skills that will complement and increase the adoption of new technologies in higher value-added industries. This is very critical for Cambodia at this stage of development.

Author: Tanya Saraswat, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or   IP & Legal Filing.