The Council of Ministers on Friday approved a draft trade law that could smooth the way for Cambodia’s entrance into the World Trade Organization, a coveted position expected to boost one of the smallest economies in Asia.
The draft law concerns business disputes and the proper way to resolve them, according to Prum Nhean Vichet, an adviser to the Council of Ministers.
“It can assure local and foreign investors that they can do business here confidently,” he said.
The law’s creation and passage was ordered by WTO members.
The law must be passed by the National Assembly.
It will be the centerpiece of a package of laws and decrees presented by Minister of Commerce Cham Prasidh to WTO members in Geneva on April 16, as he continues to lay the groundwork for Cambodia’s bid to enter the world trade group by the end of this year.
The draft law passed on Friday, known as the moderation law, would help businesses stay on their feet even if they lose a business dispute, according to a statement from the Council of Ministers.
Too often in the current business climate a dispute can lead to a total loss for the losing party, the statement said.
The moderation law would ensure a healthier business community by making it possible for parties to continue to do business together, even as they resolve their disputes.
The moderation law would guide a yet-to-be-created Commerce Court in its handling of disputes, the statement said.
The law also would speed the resolution of disputes that must go before international courts and create a system endorsed by the World Bank, the Asian Development Bank and International Monetary Fund, the statement said.
The law’s passage will be welcomed by other WTO members, including the US delegation, which several months ago told the Cambodian WTO negotiation team that it would be necessary for Cambodia to create a Commerce Court and laws to guide it before Cambodia would be accepted into the WTO.
Corruption and a lawless atmosphere have hobbled international investment in Cambodia, many experts say.
Cham Prasidh will present the moderation draft law along with several recently passed decrees when he attends the working party meeting of the 144-member WTO on April 16, according to Mao Thura.
“We have done enough” [to satisfy the WTO requirements], Mao Thura said.
Canadian legal experts already have begun working with Ministry of Justice officials to create the Commerce Court, said Mao Thura.
The upcoming elections have slowed their progress, he added, but the group will continue to work on the court’s creation through the election period.
The moderation draft law must also be passed by the Assembly. It is expected that the legislators will take up the law after their current recess, which lasts until June 15. Even then, however, the Assembly is not expected to reconvene until after the national elections, scheduled for July 27.
But Commerce officials have maintained that the Assembly is on track to pass a number of laws and regulations concerning the WTO.
