Thailand
Cambodia: Free trade deals yet to come to fruition
The negotiations on the Kingdom’s proposed free trade deal with South Korea are progressing slowly despite the fact all parties aimed to come up with finalised drafts by the end of 2020. However, the China-Cambodia Free Trade Agreement CC-FTA) ratification is to be announced early this year.
Pen Sovicheat, undersecretary of state at the Ministry of Commerce, said negotiations of the FTA with South Korea remain in the fourth round of discussions. He added there are no new details about this.
“There is no updated information regarding the agreement between Cambodia-South Korea on an FTA deal yet. However, both parties are pushing this agreement to completion by early this year,” Sovicheat said.
Khmer Times reported early in December 2020 that negotiations towards the FTA saw agreement on 90 percent of the issues addressed as the fourth round of talks concluded in November 2020. Both countries have agreed on issues including economic cooperation, trade remedies, general regulations, conflict solutions mechanisms and lists of measures for products.
The Cambodia-China FTA signed on Oct 12, 2020, on the other hand, is still waiting for ratification from both countries prior to its implementation. Sovicheat said both China and Cambodia are at the internal procedural stage to ensure both countries ratify this agreement soon so it can come into force and both countries aim to implement it by early this year.
“Before, we had set the agreement to come into force by early this year, but [once] the FTA was signed, we still [had] local procedures and we are pushing [those now],” he said. “We have almost completed our internal procedures but we [are waiting for our] Chinese counterpart to finish its internal part in order to announce [the] implementation,” Sovicheat said.
Both South Korea and China are potentially good markets for Cambodia. Data from the Korea International Trade Association (KITA) indicated that between January and October 2020, two-way trade between Cambodia and South Korea was valued at $724 million, a decrease of 16 percent from the same period a year ago.
Cambodia exported $267 million of products to South Korea, down 5 percent compared with the same period last year, with Cambodia importing $457 million worth of goods from South Korea, for a year-to-date decline of 21 percent.
Cambodian exports to South Korea were primarily garments and textiles, footwear, travel bags, spare parts, electronic equipment, rubber, pharmaceuticals and agricultural products. Cambodia’s imports from Korea included vehicles, electronics, kitchen appliances, beverages, pharmaceuticals and plastic products.
Two-way trade between Cambodia and China was valued at $8 billion in 2019, up from about $7 billion in 2018, owing to the Asean-China FTA. With the new trade deal, there are hopes exports to China will increase by as much as 25 percent a year and reach $10 billion by 2023.
Commerce Minister Pan Sorasak told local television BTV News last week that the Cambodia-South Korea FTA will be completed in the very near future because the negotiation working groups are preparing the talks with the Economic and Financial Policy Committee.
However, the minister said that regarding the Cambodia-China FTA, the ministry will seek approval from the National Assembly and Senate to ratify this deal so it can be officially implemented.
The CC-FTA deal was signed on Oct 12 during a two-day state visit by China’s Foreign Minister Wang Yi in Phnom Penh. The 340 products it covers include peppers, chillis, vegetables, fruit, fish, meat (including processed), grain, seafood and a variety of canned products, according to the Ministry of Commerce (MoC).
The MoC said, among the additional 340 commodities in the CC-FTA, 95 percent of them will be untaxed. Taxes will be dropped on the remaining 5 percent for at least 10 years.
China can list more than 9,500 products for export to Cambodia.
The MoC recently organised the sixth meeting on trading strategy to optimise the benefits from the FTA.
The meeting was led by the under-secretary of state for the MoC with participation from relevant officials.
After discussion it was decided to add SWOT analysis to its factsheet and agreed on the content of reports on trading strategy for optimising benefits from the FTA. SWOT analysis is a compilation of a company’s strengths, weaknesses, opportunities and threats. Its primary objective is to help organisations develop a full awareness of all the factors involved in making a business decision.
The meeting also touched on the establishment of a table, recommended by Sorasak, for 50 items: 20 new products, 20 growing products and 10 mature products by conducting studies on technical and customs barriers and trade preferences granted by China to Cambodia in order to boost to the maximum the number of exports to China.
Source: https://www.khmertimeskh.com/50802798/free-trade-deals-yet-to-come-to-fruition/