ARTNeT Dialogue on Analyzing Non-tariff measures: collating evidence and setting research agenda 26-27 April, 2017, UNCC, Bangkok ARTNeT research 4: NTMs in fisheries sector Research project 1 : Cambodia case study By HING Vutha, VEN Seyhah, Chhim Chhun Cambodia Development Resources Institute (CDRI)
Content 1. Introduction 2. Research Questions 3. Cambodia s Fisheries Sector Profile 4. NTMs and their impacts on Cambodia s fisheries exports 5. The need for ASEAN to accelerate regulatory convergence 6. Conclusion 2
1. Introduction ASEAN Economic Community as a major stepping stone to wider and deeper regional integration. Tariff rate of most goods have been reduced to zero But, number of NTMs imposed by ASEAN Member States (AMS) has increased (ERIA-UNCTAD 2016) ASEAN has been too slow to address NTMs (Austria 2013) Since Cambodia s fisheries sector contributes people s rural livelihoods, food security, and national economy. 3
2. Research Questions: 1- What are the coverage ratios of NTMs on Cambodia fishery export? 2- What are the regulatory distance of NTMs among AMS? 3- How do NTMs affect fisheries exports? + Research methods: - Secondary data - Desk review 4
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Thousand Tonnes 3. Cambodia s Fisheries Sector Profile 1- Fishery production 800 Figure 1: Cambodia fishery production in quantity (1980-2014) 700 600 500 400 300 200 100 - Aquaculture-Inland Capture production- Inland Aquaculture-Marine Capture production-marine Total 5
3. Cambodia s Fisheries Sector Profile 1- Fishery production Figure 2: Cambodia fishery production category share in total production (1980-2014) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Aquaculture-Inland Capture production- Inland Aquaculture-Marine Capture production-marine 6
Thousand USD Thousand tonnes 3. Cambodia s Fisheries Sector Profile 2- Cambodia fishery export Figure 5: Cambodia fishery export and import (1994-2013) 70.0 60 60.0 50 50.0 40.0 30.0 20.0 10.0 40 30 20 10-1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0 Exports in value Imports in value Export in tonnes 7
3. Cambodia s Fisheries Sector Profile 2- Cambodia fishery export Table 3: Cambodia s fishery export by destinations (2012-2015) Trade partner Trade Value (US$) 2012 2013 2014 2015 China 619,302 496,154 468,521 329,443 China, Hong Kong SAR 166,231 161,283 106,590 22,542 Japan 591,056 - - - Malaysia 37,621 12,236 906 - Rep. of Korea 150 2,986-6,909 Senegal - - - 47,155 Singapore 47,860 19,777 - Thailand 51,455 106,954 102,338 23,811 USA 548 - - - Viet Nam 177,885 354,571 42,382 35,293 8
3. Cambodia s Fisheries Sector Profile 3- Fisheries export constraints Fisheries export constraints In brief, Cambodia s fishery export faces the following constrains: Stringent NTM such as SPS, HACCP and private certificate scheme. Lack of capacity to inspect and enforce the quality and safety standards of fishery products. Cambodia s fish processing industry bases on century-old tradition of handling and processing. Inadequate knowledge of contemporary processing methods or international sanitation standards. Lack of storage, handling, packaging, and processing and supporting facilities at landing sites. Lack of consistent supply of fishery, aquaculture is underdevelopment. The government s strict control over the export distribution. Fishery policies aims to conserve the fresh-water fishery resources and restrict its capture. 9
4. NTMs and their impacts on Cambodia s fisheries exports 1. Coverage ratio of NTMs in Cambodia fishery export. ASEAN member countries impose NTMs on all commodities of Cambodia fishery exports. As shown in Figure 6, sanitary and phytosanitary (SPS), technical barrier to trade (TBT), and non-technical barrier (NTB) coverage were 100 percent, except Malaysia s NTB coverage is 26 percent. Figure 6: Major ASEAN partners NTM coverage on fishery import from Cambodia 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Thailand Vietnam Malaysia Singapore ANY_coverage AB_coverage NTB_coverage 10
4. NTMs and their impacts on Cambodia s fisheries exports 2. Regulatory distance of NTM between Cambodia and other ASEAN members Source: Authors calculation based on data from WITS Note: Modern MDS (loss=stress; transform=identify); Loss criterion = 0.2584 11
4. NTMs and their impacts on Cambodia s fisheries exports 3. The impacts of NTMs on Cambodia fishery export (A Gravity Model) lnx ijt = β 1 lngdp it + β 2 lngdp jt + β 3 lndist ij + β 4 cont ij + β 5 AMS j + β 9 β 6 ln(1 + SPScount ij ) + β 7 ln(1 + TBTcount ij ) + ɛ ijt Where: X ijt is the total export value of fishery commodities (HS3) from Cambodia to country j at time t, GDP it is the gross domestic product of Cambodia at time t; GDP jt is the country j s GDP at time t dist ij denotes the distances between Cambodia and country j. cont ij is the dummy denoting common border between Cambodia and country j AMSj is a dummy denoting ASEAN membership of country j. SPScount ij designates the total number of SPS measures imposed by county j on import of agricultural products. TBTcount ij designates the total number of TBT measures imposed by country j on import of agricultural products. 12
4. NTMs and their impacts on Cambodia s fisheries exports 3. The impacts of NTMs on Cambodia fishery export (A Gravity Model) Table 5: Results of gravity model estimations Panel regression, Random-effects, robust estimator Observations 50 Number of pairs 10 Wald chi 2, df 376.27, 7 Prob > chi 2 0.000 Overall R 2 0.59 rho 0.13 Coefficients lngdp_partner 2.23*** (0.41) lngdp_reporter -16.30** (7.60) lndist -0.612 (0.80) contig 5.13** (2.44) lncountsps -4.61** (1.98) lncounttbt -3.30*** (0.70) AMS 4.18** (2.06) Constant 348.20** (170.00) 13
5. The need for ASEAN to accelerate regulatory convergence Like other trade blocs, ASEAN has viewed NTMs as a vital component in its economic integration efforts. ASEAN member states (AMS) set forth several actions to deal with NTMs: harmonizing standards, technical regulations and conformity assessment procedures; establishing and applying sectorial Mutual Recognition Arrangements (MRAs) on Conformity Assessment for specific sectors; improving technical infrastructure and capability in laboratory testing, calibration, inspection, certification and accreditation; and enhancing post market surveillance systems. Several advancements have been completed via the establishing the ASEAN Cooperation on Standards and Conformance to Facilitate Trade and the setting up of the ASEAN Consultative Committee on Standards and Quality (ACCSQ). ultimate objective of (ACCSQ) is One Standard, One Test, Accepted Everywhere. 14
5. The need for ASEAN to accelerate regulatory convergence ACCSQ established The Policy Guidelines for ASEAN Member States to adopt any or a combination of these measures to accelerate the accomplishment of a single market and single production base. The fisheries is one of ASEAN s 12 priority integration sectors. Although ASEAN has done much to achieve harmonization of standards, the region is still struggling to effectively address NTMs making it one of the sources of impediment to trade in the region. 15
6. Conclusion The results indicate significant variation in NTMs among AMS reflecting lack of regulatory harmonization in practice. Cambodia fishery faces both demand-side and supply side constrains. The demand side constrains include stringent NTM such as SPS, HACCP and private certificate scheme applied by importing countries. The supply-side constrains are poor infrastructure, lack of technical and financial capacity to comply with NTMs, and poor production capacity. 16
6. Conclusion The empirical results deriving from gravity model estimation also clearly show the cost of NTMs leading to the declining exports. It is urgent need for ASEAN as regional trading bloc to expedite efforts addressing NTMs especially the areas of standard harmonization and conformity procedures. The good news is that AMS continue to reduce NTMs as firmly articulated in the AEC Blueprint 2025. 17
Thanks 18