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King signs South Korea FTA ratification into law

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Bilateral trade between Cambodia and South Korea reached $965.132 million last year, a 9.015 per cent surge from $885.322 million in 2020, according to data from the Korea International Trade Association (Kita). Heng Chivoan

King signs South Korea FTA ratification into law

A bill authorising the ratification of the Cambodia-Korea Free Trade Agreement (CKFTA) has been promulgated into law, moving the two Asian nations into the final stretch for the enactment of the deal, which is expected to unlock billions in bilateral trade and investment.

The bill sailed through the National Assembly on December 29, the 9th Committee of the Senate on December 30, and the Senate on January 6. All votes were unanimous. The document was enacted into law by a Royal Code signed by the King on January 29.

The CKFTA will come into effect 60 days after both countries deposit their instrument of ratification, or “notification letter”, a document by which a country formally agrees to be bound by a treaty, Ministry of Commerce spokesman Pen Sovicheat told The Post on February 3.

Sovicheat said his ministry is preparing the document for the Ministry of Foreign Affairs and International Cooperation to deposit. He seemed to suggest that South Korea had yet to submit its ratification instrument.

He voiced confidence that the free trade agreement (FTA) would enter into effect no later than June 30.

Under the CKFTA, coupled with the Regional Comprehensive Economic Partnership (RCEP), the Kingdom will lift tariffs on 93.8 per cent of goods traded, with South Korea scrapping duties on 95.6 per cent, Yonhap News Agency reported in October citing the South Korean trade ministry.

Royal Academy of Cambodia economics researcher Ky Sereyvath said that the signing of the Royal Code would deliver a fresh vote of confidence among public and private actors in the potential benefits of the trade pact.

The CKFTA will come into force soon, he said, calling on manufacturing market players to develop strategies to maximise benefits from this and similar deals.

He earlier noted that the deal fits well into the Kingdom’s diversification agenda, providing preferential treatment for a wide range of items – such as electronics and their components, car parts and apparel – whereas the FTA with China focuses more heavily on agricultural goods.

Rich Farm Asia Ltd CEO Hun Lak said the trade agreement is crucial for the Kingdom to ship a wide range of goods to South Korea, especially agricultural products, and stimulate the Cambodian economy.

Although fresh mangoes of the Keo Romiet variety grown in the Kingdom have been a moderate hit in South Korea, exports of the fruit remain limited given the number-four Asian economy’s stringent conditions for agricultural imports, he pointed out.

“Before the mangoes are shipped, they must be sterilised, and free from pests – especially the fly larvae occasionally found in mangoes. This requires a large financial investment, and there’s only one company in the market now,” Sereyvath said.

The delectable taste of the Keo Romiet mango has noticeably sparked the interest of South Korean fruit lovers, prompting the Ministry of Agriculture, Forestry and Fisheries to call on growers of all scales to adopt Cambodia Good Agricultural Practices (CamGAP) and register with its General Directorate of Agriculture for certification and accreditation for CamGAP, he added.

Following four formal rounds of negotiations and other meetings between working groups of experts, the CKFTA was virtually signed by commerce minister Pan Sorasak and South Korean Minister of Trade, Industry and Energy Yeo Han-koo on October 26.

Local economists and investors expect the CKFTA to fuel exports of merchandise such as agricultural products; apparel, footwear, bags and other textile-related goods; electronics and spare parts.

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