Cambodia – Free Trade Agreements to better trade

Cambodia turns to Bilateral agreements with the first Free trade agreement with China (CCFTA) is expecting to enhance trade bonds between the two countries and to boost Cambodia agricultural and industrial exports to China. Other FTA may follow this announcement.

On October 5th, 2020, Cambodia and China virtually inked a free trade agreement (CCFTA). This FTA is expected to raise the Cambodian export to China by 25 per cent. The CCFTA is reported to cover some 350 Cambodian products to export to the Chinese market, including spices, nuts, honey, vegetables, meats, fish and seafood products. This translates to circa 98 per cent of Cambodia’s list of exported goods. In contrast, around 90 per cent of Chinese’s products will get a facilitated passage to the Cambodian’s market.

The trade figure between Cambodia and China attained over $9 billion in 2019, despite the unequal trade balance. With Everything But Arms (EBA) privilege in place, Cambodia impersonates a crucial role as a platform for Chinese manufacturers who endeavour zero-tariff export to Europe. The withdrawal of EBA has shifted Cambodia trade vision to bind Free Trade Agreements with some influential regional countries. The anticipated Cambodia and South Korea Free Trade Agreement (CKFTA) is currently under final discussion and is expected to be inked in mid-2021. The zero-tariff bilateral deal aims to strengthen both economies by providing a trade and market expansion beyond the existing ASEAN-Korean Free Trade Agreement (AKFTA) and the Regional Comprehensive Economic Partnership (RCEP), signed in 2020 but not enforced yet.

The United Kingdom has also awarded the Generalised System of Preferences (GSP) to Cambodia that will come into force in 2022. It is expected from Cambodian government to negotiate further FTA with other countries: Eurasian Economic Union, Japan, Mongolia, India, US and Russia.

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