South Korean investors from Gangwon province’s capital city of Chuncheon – northeast of Seoul – have expressed interest in Cambodia’s investment potential and opportunities, and revealed plans for business meetings between the two countries, according to the Kingdom’s apex business association, as the bilateral goods trade again closed the year at around $800 million in 2022.
On March 30, Cambodia Chamber of Commerce (CCC) director-general Nguon Meng Tech met with a South Korean delegation – led by Chuncheon Chamber of Commerce and Industry head Ko Kwang-man – at the local association’s offices, according to a CCC statement.
The meeting focused on cooperation between the two commerce chambers and a potential memorandum of understanding down the road, the statement said, adding that the Korean delegates represented fields such as engineering and construction, vocational training, education, and culture and tourism.
Participants also discussed trade promotion, product exhibitions, and business meetings, and committed to look into potential cooperation projects in greater detail, the CCC said.
Provisional Customs (GDCE) statistics indicated that South Korea was Cambodia’s 14th largest trading partner in 2022, with the two-way merchandise trade amounting to $778.924 million, up 0.63 per cent over 2021, but still down 11.66 per cent from the record $881.761 million logged in 2019.
Cambodia’s exports to and imports from South Korea came in at $233.638 million and $545.286 million, respectively, up 20.38 per cent and down 5.98 per cent year-on-year, narrowing the Kingdom’s trade deficit with the East Asian country by 19.2 per cent, from $385.871 million in 2021 to $311.648 million in 2022.
Hong Vanak, an economic researcher at the Royal Academy of Cambodia, told The Post on April 2 that trade between the two countries has been on a steady rise, underpinned by good diplomatic relations and the bilateral Cambodia-Korea Free Trade Agreement (CKFTA).
As the global economy recovers, Cambodia’s increasing production capacity will propel exports to South Korea and elsewhere, he speculated, while noting that there is a considerable number of Cambodians working in the peninsular nation.
“Korea is one of Cambodia’s main export markets, with a wide range of products being exported there,” Vanak said. “Currently, in addition to textiles, agricultural exports from Cambodia to Korea are also increasing.”
The March 2023 iTrade Bulletin of the Ministry of Commerce’s Trade Training and Research Institute (TTRI) notes that South Korea was the third largest investor in the Kingdom for 2021, with an FDI (foreign direct investment) stock of $283.5 million, which constituted an 8.1 per cent market share of the approximate $3.5 billion global total.
These figures were sourced from the National Bank of Cambodia’s Financial Stability Review 2021, the bulletin noted.
Citing the GDCE, it said Cambodia’s top exports to South Korea were “footwear, gaiters and the like” ($54 million), “articles of apparel, knit or crocheted” ($52 million), “electrical, electronic equipment” ($45 million), “articles of apparel, not knit or crocheted” ($35 million) and “aluminium” ($12 million) – respectively corresponding to chapters 64, 61, 85, 62 and 76 of the Harmonised System (HS).
The Kingdom’s top imports from the fourth-largest Asian economy were “vehicles other than railway, tramway” ($132 million), “raw hides and skins – other than furskins – and leather” ($55 million), “beverages, spirits and vinegar” ($52 million), “knitted or crocheted fabric” ($34 million) and “electrical, electronic equipment” ($31 million) – or chapters 87, 41, 22, 60 and 85 of the HS.
In addition to the CKFTA, Cambodia also enjoys preferential tariff treatment on exports to South Korea through the Regional Comprehensive Economic Partnership (RCEP) and ASEAN-Korea Free Trade Agreement (AKFTA).
An FTA is an international treaty between two or more economies designed to reduce or eliminate certain barriers to imports and exports among them, generally while safeguarding safety, security, health and other legitimate regulatory objectives. Such a pact can also serve to facilitate and promote greater economic ties among signatories in areas such as investment and intellectual property protection.