Cambodia’s FTA Talks with South Korea Concluded

Cambodia’s FTA Talks with South Korea Concluded

Cambodia and South Korea have concluded their free trade agreement (FTA) negotiations and are now closer to the signing of a final pact later this year.

It would be the second free trade agreement Cambodia has made bilaterally with one of its primary trading partners. The Kingdom’s first bilateral FTA was with China. It was signed last October.

The FTA between Cambodia and South Korea will be sealed during the COVID-19 pandemic and will provide another tax-free market for many Cambodian products, said Permanent Secretary of State of Ministry of Economy and Finance Vongsey Visoth.

“The potential for Cambodia’s markets still remain huge,” Visoth said in a public forum on macroeconomic and budget law for 2021 held last Thursday in Phnom Penh.

“We have an FTA with China and we are going to have another FTA with South Korea soon,” he added.

Bilateral trade between Cambodia and South Korea was valued at $884 million as of December 2020, a year-on-year decrease of 14 percent, according to figures from the Korean International Trade Association.

From January to December 2020, Cambodia exported $317 million of products to South Korea, a decline of 18 percent compared with the previous year.

The Kingdom imported $567 million of goods from South Korea, a slide down of 5 percent year-on-year.

The announcement of the conclusion of the negotiations for the trade agreement between the the two nations was made yesterday at the Sofitel Phnom Penh Hotel, said the Ministry of Commerce (MoC).

The conclusion was reached following four rounds of talks on the FTA’s draft. The discussions began in July last year.

Minister of Commerce Pan Sorasak said recently that the two countries will endeavour to get the pact fully signed off in 2021.

MoC spokesman Seang Thay said after the fourth round of discussions that both countries had agreed on issues including economic cooperation, trade remedies, general regulation, a conflict solutions mechanism and lists of measures for products

Cambodian Ambassador to South Korea, Long Dimanche, said that not a member of the negotiations working group he could not speak first-hand on next steps, but could say that both governments want to see an agreement signed as soon as possible.

Dimanche added that economic concerns have been set as a core priority for foreign policy executed by the Kingdom’s Ministry of Foreign Affairs and International Cooperation. He noted that the Kingdom’s diplomats are responsible for both politically driven diplomatic duties and maintaining a focus on economic diplomacy.

The ambassador pointed out that pre-COVID-19, the value of trade between the two countries reached nearly $1 billion in 2019.

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 were largely in categories including vehicles, electronics, kitchen appliances, beverages, pharmaceuticals and plastic products.

The ambassador also said while trade between the two nations is not balanced, what is more important is that the value of bilateral trade continues to grow year-on-year.