Interview with Trade Policy Advisor Sven Callebaut

This week, we interviewed Trade Policy Advisor and longtime EuroCham collaborator Mr. Sven Callebaut in advance of the ASEAN-Cambodia Business Summit, where he will join as a moderator on the panel "Navigating Digital Borders". Mr. Callebaut is an advisor to the Ministry of Commerce in Cambodia, and the Director of TradeWorthy, an Asutralia-based trade consultancy firm. His wide-ranging expertise covers international trade, regional integration, digital trade policy, and digital transformation for governments in Asia-Pacific region.

EuroCham: We’re so pleased to have you as a moderator for our panel discussion on navigating digital borders.

Sven: Thank you EuroCham for the opportunity to share a few thoughts on Cambodia's development trajectory and for your invitation to moderate a panel in the forthcoming Summit.

EuroCham: Could you give us a small preview of how digitalisation is changing cross-border commerce and where do you see potential in the sector?

Sven: Digitalization has radically changed how trade is carried out across borders. The information flow accompanying the goods is much faster, smoother, and more predictable thanks to digitalisation. Very soon, trade and e-trade will become synonyms as nowadays, all trade, especially trade in services, has an "e" part, be it sourcing, contracting, or payment. I am not just preaching in the desert: The Asia-Pacific region is home to some of the fastest-growing digital economies in the world. In 2021, the region's digital economy was valued at $3.2 trillion, and it is expected to reach $7.1 trillion by 2025. ASEAN’s digital economy is projected to triple by the end of the decade through the natural adoption of digital technologies, growing from approximately US$300 billion to almost US$1 trillion by 2030. Progressive rules in the upcoming Digital Economy Framework Agreement (DEFA) would double this value contribution, unlocking US$2 trillion to ASEAN’s digital economy.

EuroCham: You have been a key promoter of Cambodia in your various roles as advisor to the government, implementing partner via TradeWorthy, and most recently lead author of the Handbook on Investing in Cambodia, released last July by the CDC and DFAT. What excites you about the short-term future of Cambodia?

Sven: My 20 years in Cambodia has made me a keen observer of Cambodia's economic and trade development. I was fortunate to be consulted or invited to contribute to this development and I am grateful for the opportunities to do so. Cambodia is following the development pattern of many other developing countries before her, but in an accelereated way. We are steadily moving away from dependency on one export product (GFT) and a significant share of the GDP is generated via light manufacturing and, more importantly, services (beyond tourism).

Answering your question, what excites me is how we will translate all the opportunities created by the bilateral and free trade agreements that Cambodia has signed. The Ministry of Commerce has worked tirelessly to make this happen, in close cooperation with other agencies and the private sector. This preferential market access gives our exporters a unique chance to take advantage of the few years remaining until Cambodia’s expected graduation from Least Developed Country Status to explore new markets, add value to their products and, more importantly, increase their competitiveness. This is where the near future is: increasing Cambodia's SME competitiveness so they can be part of regional and global value chains and supporting foreign investors arriving in the country, notably as a result of the implementation of the new Law on Investment.

EuroCham: Economic integration is a key theme for the summit and Cambodia holds a very strategic position at the heart of ASEAN. What does economic integration mean to you and how can it help Cambodia capitalise on this strategic location?

Sven: Yes, Cambodia has a captive market within the ASEAN Economic Community, but let's not forget that a lot of our competitors produce and export the same products, and sometimes services and have almost the same market access. Location is important, but so is the business climate, the legal and regulatory framework, the predictability, and the skills. As ASEAN's youngest member, Cambodia had a lot of catch up to do, learning from peers, but developing its own path and trajectory. The growth acceleration was enhanced by participation in ASEAN and, most recently, the RCEP: it is a reminder of the importance of regional integration. Similarly, Cambodia's trade has benefited from its accession to the WTO back in 2003, a reminder that global and multilateral integration is as important, especially in the new "economic diplomacy" doctrine spearheaded by MFAIC.

EuroCham: Which sector or area do you think needs to the most attention to improve ASEAN-Europe economic connections?

Sven: Let's remember that EU-ASEAN agreement remains a long-term objective. Bilateral Free Trade Agreements (FTAs) between the EU and ASEAN countries can serve as building blocks towards that goal. So far, the EU has completed negotiations for bilateral agreements with two of them (Singapore in 2014 and Vietnam in 2015), while negotiations with Malaysia and the Philippines are currently on hold. Negotiations with Indonesia are ongoing and negotiations with Thailand resumed recently. So, we are making progress!

It takes two to tango, so it is important to remember that in exchange for market access, the EU expects improvements in several areas. Learning from the past bilateral negotiations, I would say standards -- for both goods and services -- are key areas. High-quality infrastructure provides direct positive impacts, including higher efficiency, increased safety, decreased environmental impact, and more effective delivery of public goods and services.

And in that regard, EuroCham offices in ASEAN member states play a critical role, as both the place to meet and the place to provide and keep momentum in the conversations between businesses from EU and from ASEAN. Going forward, it is important that the private sector, through Public-Private Dialogue mechanisms like the G-PSF, understand how firms can play a role in fomenting future trade agreements.

EuroCham: If you were an investor with US$1 million to invest in Cambodia, where would you spend your money?

Sven: That's a tricky question: not because of the lack of opportunities, but because there are too many! From my recent observations, working with programmes like ARISE Plus Cambodia and DFAT's CAPRED, I would invest in packaging -sustainable ones! -, midland crops -we can't keep these Mondulkiri avocados and other cash crops only for ourselves, -education- as the standards keep improving and, obviously in digitalization.

If I had US$10 million, I would look at the Handbook on Investing in Cambodia just released by CDC, that contains a wealth of information on where to invest, the priority sectors, and the incentives that go with them!

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