The Cambodian-German commodity trade came to $946.318 million in the first nine months of this year, up 20.29 per cent year-on-year, according to Customs, an increase attributed to the EU’s preferential commercial arrangements with Cambodia which may be lost down the road as the Kingdom sheds its “developing country” tag.

In response, local analysts are calling for a free trade agreement (FTA) with the world’s fourth-largest economy to seamlessly carry forward the momentum of bilateral economic cooperation.

In the January-September period, Cambodia’s commodity exports to Germany amounted to $828.872 million, up 26.37 per cent year-on-year and imports $117.445 million, down 10.22 per cent, according to the General Department of Customs and Excise of Cambodia (GDCE). The Kingdom’s trade surplus with the EU’s fourth largest country by area for the nine-month period expanded 35.49 per cent, from $525.089 million to $711.427 million.

In September alone, the Kingdom’s exports were to the tune of $81.34 million, up 4.1 per cent year-on-year but down 21.90 per cent month-on-month, and imports clocked in at $9.88 million, down 13.0 per cent year-on-year and 27.6 per cent month-on-month.

Speaking to The Post on October 26, Cambodia Chamber of Commerce vice-president Lim Heng predicted that the Kingdom’s exports to Germany would continue to trend upwards, driven by the duty-free provisions of the EU’s ‘Everything But Arms’ (EBA) trade scheme as well as the quality and variety of Cambodian merchandise available for export that also meets the requirements of the German market.

“I am optimistic that Cambodia’s exports to Germany will ratchet upward even further, although in the future, Cambodian exports there may lose their tariff exemptions under the EBA system,” he said.

Regardless, Heng hopes that with better Cambodian-German cooperation, the two governments may also consider launching formal talks on an FTA with each other.

He said that the bulk of Cambodian exports to Germany comprise garments, footwear and travel products, bicycles, electrical components and agricultural product, while key imports include vehicles, furniture and construction materials.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, argued that as the EU’s largest economy and most populous member state, Germany has high demand for imports.

Of note, Germany in May had recorded its first monthly trade deficit since 1991, at €1.0 billion ($1.0 billion), which was revised on August 3 to a €0.8 billion surplus, according to Reuters.

Vanak stressed that an influx of new German investors into the Cambodian market coupled with more orders from the European country for local products would be a boon for the Kingdom’s economy.

“Germany will continue to be an important target market for Cambodian goods given the good cooperation the two countries have in all fields. In addition, Germany is a major provider of aid to Cambodia,” he said.

At an October 10 meeting with German ambassador Stefan Anton Messerer, Prime Minister Hun Sen lauded Germany as Cambodia’s most important development partner in Europe, praising the cooperative ties between the two countries.

In 2021, the commodity trade between Cambodia and Germany totalled $1.045 billion, up 6.77 per cent over 2020 but down 12.85 per cent from 2019 and 13.35 per cent compared to the 2018 record of $1.206 billion, according to the GDCE.

Cambodian exports to Germany amounted to $880.78 million – up 0.39 per cent over 2020 but down 18.39 per cent from 2019 – and imports $164.584 million, up 61.7 per cent over 2020 and 36.74 per cent from 2019.

The Kingdom’s 2021 trade surplus with Germany was $716.198 million, down 7.65 per cent over 2020 and 25.31 per cent from 2019.