Trade between Cambodia and Pakistan as well as the Kingdom’s halal food exports to the latter and other Muslim-majority countries are projected to accelerate as the two nations set their sights on improving bilateral business networking.
The two countries are also exploring setting up a joint-working group to discuss launching formal negotiations of a free trade agreement (FTA), Cambodia Women Entrepreneur Association (CWEA) president Keo Mom told The Post on March 20.
Mom, who is also CEO of Ly Ly Food Industry Co Ltd, a prominent local manufacturer of snack foods, which include halal products, commented that ramping up political cooperation will reinforce trade ties, and in particular amplify Cambodian exports of Islamic-compliant food items.
Halal food production is that where every aspect of the ingredients, materials, procurement, processes, methodologies and facilities are deemed to be permissible under Islamic Law, as laid out in the religion’s holy book, the Quran.
“As relations between the two countries improve, Cambodia will have all the more opportunities to export its merchandise to Pakistan, and [locally-made] halal food products especially will be big winners there,” Mom said, pointing out that shipping halal goods requires separate, formal certification identifying them as such.
Although Ly Ly Food has yet to partner up with Pakistani distributors and foray into that South Asian market, the company will keep looking into adding more countries to its existing portfolio of 13 export nations, which includes the US, Australia, New Zealand, South Korea, China and Vietnam, she shared.
On the other hand, Hong Vanak, director of International Economics at the Royal Academy of Cambodia, drew attention to the limitations of Cambodian-Pakistani goods trade.
He believes that, even in the longer term, the interplay between economic, political and geographical factors will most likely keep the two-way trade with Pakistan below levels registered by the likes of China, the US, Thailand, Vietnam and Japan.
Still, the continued strengthening and expansion of Cambodia’s overseas markets in addition to its FTAs with China and other countries have significantly increased foreign investment inflows, he said.
“Improving diplomatic and trade relations will also help increase the number of Pakistani tourists to Cambodia,” Vanak mused.
For reference, the Ministry of Tourism tallied 2,577 Pakistani visitors to the Kingdom last year, up from 100 in 2021 but down from 4,835 in 2019 – respectively the lowest and highest annual figures given for the 2007-2022 period, with the second and fourth highest numbers given as 3,567 in 2018, and 2,019 in 2017.
Of the 2022 figure – equivalent to 0.11 per cent of the 2.277 million total foreign visitors that year – the majority had their purpose of visit marked as “holiday”, at 1,863 or 72.29 per cent, followed by “business” (703; 27.28%) and “others” (11; 0.43%) – compared to 2019 with 4,014 holiday (83.02%), 699 business (14.46%), and 122 others (2.52%).
Meanwhile, Minister of Commerce Pan Sorasak on March 17 said the business community is working out how to optimise benefits from Cambodia’s bilateral and multilateral FTAs, in an endeavour that could attract considerable amounts of direct investors and exporters, according to a statement from his ministry.
Sorasak was speaking at a meeting with Pakistani ambassador Zaheeruddin Babar Thaheem at his ministry, the statement noted.
Good cooperation will create new avenues to boost economic growth in both countries, such as by encouraging investment and opening doors for business-to-business (B2B) dialogue and networking opportunities, the minister said.
This dialogue could come in the form of business matching events, trade fairs or similar, aimed at providing valuable insight into market demand and needs as well as promoting joint ventures, he proposed.
Sorasak also highlighted the China and South Korean trade deals, Regional Comprehensive Economic Partnership (RCEP), and the ASEAN and ASEAN-Plus-One FTAs, which he said provide massive gains in market access for the local business community.
And formal negotiations for the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA) concluded on March 16, he added.
The minister invited Pakistani investors to be part of Cambodia’s growth journey, take advantage of the aforementioned FTAs, and bolster the Kingdom’s exports.
He asked the ambassador to encourage the Pakistani private sector to explore business opportunities in the Cambodian food processing industry, especially the halal segment, as well as direct flights between the two countries to promote tourism and investment in both directions.
Bilateral trade volume may remain limited, but the two countries still have a lot of room to improve metrics related to trade and investment, Sorasak said, affirming his readiness to work closely with Thaheem and other diplomats to achieve common objectives.
The ambassador highlighted the potential of Pakistani sectors such as textiles and marble, and noted that the South Asian country imports lots of palm oil from Malaysia and Indonesia along with cashew nuts from Vietnam.
He also suggested that Pakistan may be able to provide technical assistance in animal husbandry if needed, according to the statement.
In 2021, Cambodian goods imports from and exports to Pakistan clocked in at $39.57 million and $2.19 million, respectively, compared to $30.03 million and $2.43 million a year earlier, Trading Economics statistics show, indicating that the Kingdom’s trade deficit with the South Asian country grew by more than one-third.
Cambodia’s top export category to Pakistan that year was “organic chemicals” at $1.06 million, followed by “footwear, gaiters and the like” ($0.669M), “headgear” ($0.302M), “articles of apparel, not knit or crocheted” ($0.1085M) and “articles of apparel, knit or crocheted” ($0.029M). These correspond to chapters 29, 64, 65, 62 and 61 of the Harmonised System (HS).
For comparison, the corresponding 2020 figures were: “organic chemicals” ($0), “footwear, gaiters and the like” ($0.438M), “headgear” ($0), “articles of apparel, not knit or crocheted” ($1.43M) and “articles of apparel, knit or crocheted” ($0.013M).
Similarly, the Kingdom’s top import category from Pakistan in 2021 was “pharmaceutical products” at $19.20 million, followed by “manmade staple fibres” ($11.48M), “raw hides and skins [other than furskins] and leather” ($5.67M), “cotton” ($1.59M) and “organic chemicals” ($0.691M). These correspond to chapters 30, 55, 41, 52 and 29 of the HS.
The analogous 2020 numbers were: “pharmaceutical products” ($18.29M), “manmade staple fibres” ($2.80M), “raw hides and skins [other than furskins] and leather” ($5.44M), “cotton” ($2.34M) and “organic chemicals” ($0), according to Trading Economics.