The Cambodian commerce minister and outgoing South Korean ambassador on December 20 exchanged congratulations over the $659 million in bilateral trade posted for the January-October period – marking a four-per-cent on-year uptick – and discussed the future of economic relations between the two countries, according to the ministry.
This came during ambassador Park Heung-kyeong’s farewell call on Minister of Commerce Pan Sorasak, his ministry noted in a statement later that day.
Sharing other statistics with the Korean delegation, Sorasak said that the two-way trade volume grew by six per cent in 2020 despite the Covid-19 pandemic, reaching $772 million, compared to $729 million in 2019, according to the statement.
Statistical discrepancies and asymmetries in trade figures are common between different sources, however, with Cambodian Customs (GDCE) and the Korea International Trade Association (KITA) respectively reporting the 2020 figure at $734.4 million and $885.3 million, down 16.7 per cent and down 14.3 per cent from a year earlier.
By comparison, GDCE and KITA reported the January-October 2022 figure at $658.9 million and $891.0 million, up 3.2 per cent and up 12.6 per cent year-on-year.
The minister thanked Park for his many contributions to Cambodia’s economic development as well as the growing and deepening bilateral engagements between the two countries, and especially for his work to further talks on the Cambodia-Korea Free Trade Agreement (CKFTA), which entered into force on December 1, the statement said.
Sorasak signalled that his ministry is “ready to work closely” with Park’s successor to advance cooperation and push for new achievements.
He also suggested encouraging more South Korean investment in the manufacturing, processing and automotive industries, and noted that the new Law on Investment includes a raft of incentives for these sectors.
Park hailed the positive development in Cambodian-South Korean relations, especially in the fields of politics, trade and economics, as well as human resource exchanges, the statement added.
He painted the CKFTA and Cambodia-South Korea double tax avoidance (DTA) agreement as confidence boosts for market players, and drivers of Korean investment and business in the Kingdom.
To recall, the DTA treaty entered into force on January 29, 2021 with provisions generally taking effect on January 1, 2022.
The statement said that both sides reaffirmed their commitment to working increasingly more closely to strengthen, expand and promote trade, investment and economic relations between the two countries.
Royal Academy of Cambodia economics researcher Ky Sereyvath commented that South Korean businesspeople are eyeing the Kingdom through the lens of their own expertise in agriculture and agro-industry.
Sereyvath pinned the on-year rise in bilateral trade volume on Cambodian agro-industrial exports to South Korea, adding that the Kingdom’s produce has gained significant market share in the peninsular nation from major competitors Thailand and Vietnam, which he noted have historically been more developed in the field.
“Cambodia has only recently gained traction thanks to government coordination efforts to enable Cambodian agricultural produce and various other products to penetrate the South Korean market,” said Sereyvath, who obtained his doctorate in Economics from South Korea’s Changwon National University.
GDCE data as of November shows a clear overall downtrend in the monthly two-way merchandise trade since a peak in March, but now with the CKFTA in effect, Sereyvath is claiming that a rebound is underway, with Cambodia mainly exporting garments and produce.
Surprising as it may seem, however, he shows little faith in the widely-held view that the pact will substantially boost trade flows between the two countries, at least in the near-term.
Sereyvath contended that the Korean consumer’s high standards could be difficult for the Kingdom’s producers to meet, but conceded that certain partnerships and arrangements – which he stressed would most likely require long-term commitments – could be struck to ensure successful market penetration in South Korea for Cambodian-made goods.