T.R.A.D.E. Project

Purpose of Project

Trade Related Technical Assistance for Development and Equity, known as the T.R.A.D.E. Project, reinforces the linkages between trade and human development. Implemented by the Ministry of Commerce (MoC), with assistance from UNDP, it provides the analytical foundation for policy recommendations and facilitates the coordination of trade-related technical assistance. It also strengthens capacity for development, implementation and monitoring of national policy, and supports the development of selected export-oriented sectors that will generate employment. In this way it contributes to the achievement of Cambodia’s National Strategic Development Plan and thus to its socio-economic development.

Main Activities

• Strengthen capacity to supply and promote products and services for export, as identified in the 2007 Trade Integration Strategy.
• Support development of capacity for managing Cambodia’s trade development policy, the Sector Wide Approach to Trade (the Trade SWAp).
• Establish a Value Chain Analysis Unit within the Trade Promotion Department of the MoC.
• Undertake profiling and value chain analyses of selected agricultural sectors and develop sector strategies, particularly for rice, cashew nuts and cassava.
• Develop a Communications Strategy for the MoC’s Department of International Cooperation (DICO) to support the activities of the Trade SWAp.
• Work with local chambers of commerce to facilitate public-private dialogues between the Government and businessesto determine constraints faced in selected geographical areas.
• Support the regular updating of the Trade Integration Strategy and the Trade Related Technical Assistance Action Matrix.
• Produce human development impact assessments of Cambodia’s integration into the world economy as a result of actions such as accession to the World Trade Organization. These include Trade and Environmental Sustainability Study on Three Selected Agricultural Products: Rice, Cassava and Fish (forthcoming, 2010).

Key Results

• MoC assessed exporters’ needs in nine provinces. From these, three areas were selected for pilot activities – Kampong Cham, Siem Reap and the north-west provinces of Battambang and Banteay Meanchey.
• Market analysis of four key products – cassava, soybeans, corn, and prahoc (fermented fish paste) - were conducted in 2008 and activities launched to establish product associations and institutionalize provincial public-private dialogues.
• MoC’s Value Chain Analysis Unit, established in 2009, completed analyses of rice, cassava and cashew nuts.
• MoC led a mission of rice producers and millers from six provinces to Senegal, a major commercial hub for Western and Central Africa, in 2008. The main purpose was to develop business relationships and allow Cambodian millers to better understand this potential market. Senegal expressed interest in importing from Cambodia 3,000 tonnes of rice.
• MoC led a trade mission of cassava producers to China in 2008 to explore markets and processing technology, leading to the establishment of links between cassava producers and Chinese middlemen.
• MoC investigated gaps in key trade support services (information, promotion, finance extension services, packaging and transport logistics) and explored how these might be strengthened. MoC officials visited Vietnam in 2008 to learn from the experiences of Vietrade (Vietnam Trade Promotion Agency).
• The project supported formulation of logical frameworks for two of the three sub-programmes of the Trade SWAp, as well as for the 2008 Monitoring and Evaluation
  matrix.
• A rice milling mission visited Belgium, Germany and Poland in 2010 to explore possibilities under the EU’s Everything-but-Arms initative, which allows all Least Developed Countries to export rice to Europe free of tariffs.
• MoC, in partnership with the Royal School of Administration, the Royal University of Law and Economics, and other regional networks, initiated the development of research capacity on core trade issues
• Cambodian rice millers began discussions with a Singapore-based company specializing in supply chain management of agriculture products and food ingredients.
• The Kampong Khlaing Prahoc Orb Association was established in a commune near the Tonle Sap Lake in 2009 to support production and merchandising of fermented fish paste. The association supported its members in accessing credit and increasing output.
• The sector-wide silk strategy, which is being implemented by the International Trade Center with support from UNDP, conducted a needs analysis of the silk industry, pinpointing the need for improvements in the quantity and quality of mulberry leaves, the breeding and handling of silk worms, and techniques for spinning silk yarn.
• Khmer Silk Villages, an association of farmers and weavers, mapped weaving capacity established a Silk Network to share information and began setting up savings groups in 29 weaver communities in 2009.
• The Cashew Nut Association of Kampong Thom Province set up links with the Dong Nai Province Cashew Nut Association in Vietnam, paving the way for investments in plantations in two provinces.

Background

The T.R.A.D.E. Project centres on developing national capacity to make the most of Cambodia's membership of the World Trade Organization (WTO). It facilitates Cambodia’s integration into global and regional markets by helping to promote exports that will generate revenue, diversify the economy and create jobs. After Cambodia joined the WTO in 1999, it became one of the first countries to pilot the Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries, which had been established by the WTO, World Bank, IMF, ITC, UNCTAD and UNDP. In 2001, under the guidance of the Government, a World Bank-led team conducted a Diagnostic Trade Integration Study for Cambodia. In 2005, the OECD’s Paris Declaration on Aid Effectiveness endorsed the concept of the “sector wide approach”, or SWAp, to harmonize donors’ practices and increase the effectiveness of their aid. In 2006, Cambodia and its development partners agreed to adopt a SWAp for the trade sector and the T.R.A.D.E. Project took on the task of updating the 2001 study. This produced Cambodia’s 2007 Trade Integration Strategy, which now forms the heart of the Trade SWAp. The strategy identifies 19 products and services with export potential, including garments, footwear, rice, cassava, rubber, fish, cashew nuts, silk, soybeans, corn, wood products, light manufacturing, and tourism. The strategy also pinpoints promising markets in Asia, the Middle East, the former Soviet Union countries and Africa. The Trade SWAp consists of three sub-programmes, or “pillars”, supported by mixed teams of government officials, private sector representatives and development partners. Pillar 1 is cross-cutting reform of laws and institutions to promote trade development. Pillar 2 is development of export supply capacity. Pillar 3 is development of human and institutional capacity for managing the Trade SWAp. The T.R.A.D.E. Project focuses on supporting pillar 2 and pillar 3.