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US Official Says Cambodia Could Join TPP Trade Pact

Catherine Novelli, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment at the U.S. Department of State, joins a penal discussion on Unlocking Cambodia's Creative Economy in Phnom Penh, on Friday, June 10, 2016. (Phorn Bopha/VOA Khmer)

However, in order to qualify for membership, the US official said Cambodia needed to demonstrate a level of openness that comes with the trade deal.

A leading US State Department official met senior Cambodian leaders in Phnom Penh on Thursday and Friday during a three-day visit to the country, discussing a range of issues including deforestation, the investment climate, energy and technology.

Undersecretary of State for Economic Growth, Energy, and the Environment Catherine Novelli also raised the possibility that Cambodia could join the Trans-Pacific Partnership, a controversial US-led trade agreement between Pacific Rim states.

During her visit, which came just four months after U.S. Secretary of State John Kerry made a trip to Cambodia, Novelli met Minister of Environment Say Sam Al and Agriculture Minister Ouk Rabun.

She also met with a secretary of state for telecommunication, journalists and entrepreneurs in the tech and digital sectors.

“I think that our economic relationship is strong, with $3 billion dollars in two-way trade and we are the top country partner of Cambodia in terms of trade,” she said during a meeting with a group of journalists Thursday at the US Embassy.

“We would like to enhance that, possibly to conclude a bilateral investment treaty as well as find ways to work to gather on practical issues that can really cement our relationship and help bring Cambodia to the next level.”

Amid ongoing political tensions in the country, Novelli said the government led by Prime Minister Hun Sen needed to do more to ensure political stability so as not to hurt investment.

“One of the things that I raised as well, was just to point out that a lot of the time people think that politics and economics are completely separate, but there have been some issues here around some NGOs as well as some political issues, and I just point it out that companies do watch these things very carefully when they are deciding where they are going to invest,'' Novelli said. ''Companies like to know that they are in a place that is open and stable in terms of that openness.”

“So these kinds of issues that have been happening here can have an effect on the investment side as well. It may not be immediate, but it can absolutely have an effect,” she added.

She said that Cambodia showed great economic potential and could become a member of the Trans-Pacific Partnership, a central part of President Barak Obama's policy for Asia which aims to create a market of about 1.5 billion people.

“The way that TPP was originally planned was that we would start with the countries that are the initial countries, but it was always planned that the TPP would be expanded, so we would be very interested. Once everybody gets the current TPP approved and up and running, we’ll be interested in having Cambodia be part of that TPP,” Novelli said.

However, in order to qualify for membership, she said Cambodia needed to “demonstrate that you are interested in taking on those levels of openness and that you are going to follow through on that” – a task she said the United States was willing and able to assist with.

“We are happy to work with Cambodia and to explain all the provisions of [the TPP],” she said. “One of the reasons why we have been so interested in pursuing a bilateral investment treaty is because the provisions that are in the bilateral treaty are nearly identical to the provisions in the TPP on investment, so that would sort of solve that one issue right there, and Cambodia has very open trade policies.”

“We are happy to start negotiating as soon as Cambodia is ready.”

Novelli also got a chance during the trip to visit areas of the country that have been hit hard by illegal logging. “It’s clear to me that deforestation is an issue,” she said, adding that she had been impressed by Environment Minister Say Sam Al’s “commitment”.

Novelli was featured Friday in a panel discussion titled ''Unlocking Cambodia's Creative Economy" at the Hotel Cambodiana. Leaders of technology companies based in Cambodia took part. The entrepreneurs said improving the education system was key to developing human resources to work in the Cambodia's nascent digital and internet industry.

Despite significant advances in Cambodia economically, Steven Path, president of the Cambodian ICT Federation, said the lack of trained employees was a major barrier to investment. “Human resources development is very important,” he said.

Len Tan, CEO if electronics firm ICE, agreed.

“If we had educational institutions that really emphasize human resources, I think it would help the economy drastically,” he said.