Cambodia and the UK are considering entering into a memorandum of understanding (MoU) on Trade Facilitation to further boost bilateral trade, underpinned by the Southeast Asian country’s preferential market access under Britain’s Generalised Scheme of Preferences (GSP), the Ministry of Foreign Affairs and International Cooperation said in a press release.
At a June 23 meeting with his British counterpart Dominic Raab, foreign minister Prak Sokhonn highlighted the importance and positive nature of past and present Cambodia-UK diplomatic relations, and thanked the UK government for including Cambodia in the GSP programme.
The ministry said: “The two ministers agreed on the importance of dialogue on trade related issues. They shared a common desire to further strengthen and expand bilateral relations and cooperation in various fields of mutual benefit, especially the economy, trade, education, mine clearance, health and the environment.
“They agreed on the need to advertise business opportunities in Cambodia in order to encourage more UK investors to choose Cambodia as a destination, taking into account of Cambodia’s potentials resulting from tax and other incentives, as well as AFTA [ASEAN free trade agreement], RCEP [Regional Comprehensive Economic Partnership], Cambodia-China FTA [free trade agreement], Cambodia-Korea FTA frameworks,” it said.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post that any bilateral or multilateral MoU or trade agreements with the UK would be very beneficial to Cambodia, as a major buyer of Cambodian goods.
The UK imports loads of Cambodian textile products, bicycles and milled rice year, he said, adding that exporters of Cambodian merchandise also stand to capitalise on the UK’s trade agreements with the EU.
“If Cambodia manages to strike more MoUs with the UK, that’d make more Cambodian goods marketable and bolster competitiveness,” he said.
Following the result of a referendum held in 2016, the UK’s divorce from the EU on January 31, 2020 – commonly known as Brexit – gave Britain the freedom to set an independent trade policy.
The UK government has since committed to increase access to UK markets for developing countries, as Cambodian agricultural products gain more support and market share.
Prior to the December 31 expiration of the transition period following the UK’s departure from the EU, Britain announced that it would provide GSP benefits to Cambodia, along with more than 40 other countries.
The greater part of Cambodia’s exports to the UK comprise garments, footwear, bicycles, milled rice and other agricultural products, while imports mainly consist of cars and machinery.
In February, Cambodian Minister of Commerce Pan Sorasak acclaimed the UK’s considerable contributions to the Cambodian economy and human resource development via financing for the expansion of priority sectors – especially education, economy and trade – and the provision of the trade preferences that came into effect when the Brexit transition period ended.
He said the government “has made great efforts to reform institutions and regulations for economic integration and has shown a strong will to expand trade partnerships through the establishment of free trade agreements with major trading partners in the region”.
Cambodia-UK trade reached $877.54 million last year, down by 17 per cent from $1.05728 billion in 2019, commerce ministry data show.
Cambodia exported $826.16 million worth of merchandise during the period, down 15.48 per cent year-on-year, and imported $51.38 million, down 35.60 per cent year-on-year.