Thailand
FTAs, RCEP pushing Cambodia into producing more products for exports
The Cambodian government has pushed for more products for exports as the country is opening wider markets after free trade agreements and the Regional Comprehensive Economic Partnership Agreement come into force earlier next year.
Speaking at the inauguration ceremony of the national road number 7 on Monday, Prime Minister Hun Sen said that the Cambodia-China Free Trade Agreement and the Regional Comprehensive Economic Partnership Agreement, which will enter into force in January 2022, will further improve Cambodia’s economic performance.
The two agreements, which will take effect in January, will open up a wider market for Cambodian products to boost exports, he said.
“The free trade agreement between Cambodia and China will enter into force in January, RCEP will enter into force in January as well, so Cambodia has a better leverage to try and produce to promote exports, this is a positive turning point for the Cambodian people,” Mr Hun Sen said.
The Free Trade Agreement (FTA) is a mutual tax exemption agreement between one country and another on agreed products. It is not only a product tax exemption agreement, but covers many areas, including services, investment, trade facilitation and the removal of non-tariff barriers.
For the free trade agreement between Cambodia and China, Cambodia will import more than 340 kinds of products, 95 percent of those products will be taxed at zero percent and the remaining 5 percent will decrease to zero within 10 years.
The Regional Comprehensive Economic Partnership Agreement has been signed by 15 countries, including the 10 ASEAN member states, and five other free trade partners – Australia, China, Japan, South Korea and New Zealand.
The RCEP is the largest trade agreement in the world, with an estimated population of 2.2 billion, or 30 percent of the world’s population, and 28 percent of world trade.
Lim Heng, vice president of the Cambodia Chamber of Commerce, said that the bilateral FTAs and RCEP will complement the trade preferences which Cambodia will receive as the country upgrades its status from a less developing country status.
“Once implemented, those FTAs and RCEP will make Cambodia depend on the trade pacts for its exports rather than trade preferences. They also promote and attract more foreign investments to flow into Cambodia,” Heng said.
Cambodia exported $8.201 billion worth of all products in the first six months of 2021, a 17 percent increase compared to the same period last year, according to a report from the Ministry of Economy and Finance.
Source: https://www.khmertimeskh.com/50983649/ftas-rcep-pushing-cambodia-into-producing-more-products-for-exports/