Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom, South Korea plan for post-FTA era

Kingdom, South Korea plan for post-FTA era

Content image - Phnom Penh Post
Prime Minister Hun Sen met with South Korean President Moon Jae-in on February 11, at the 2022 World Summit for Peace on the Korean Peninsula in Seoul. SPM

Kingdom, South Korea plan for post-FTA era

South Korea has pledged to expand economic and trade cooperation with Cambodia after a free trade agreement (FTA) signed by the two countries last year enters effect in the near future, Prime Minister Hun Sen affirmed in a statement at the weekend.

The premier met South Korean President Moon Jae-in on February 11, at the 2022 World Summit for Peace on the Korean Peninsula in Seoul.

At the meeting, Moon remarked that Cambodia is a key priority for South Korea, especially as the FTA nears implementation, and said the agreement was “being sent to Parliament” for ratification after “completion of the procedures”, according to the statement.

The president voiced satisfaction over the exceptional level of bilateral cooperation, and said Seoul would stick to the policy of encouraging Korean investors to enter the Cambodian market, using the new Law on Investment as a major enticement.

Moon also noted that there are 300 South Korean companies investing and doing business in Cambodia.

Hun Sen asked Moon for Seoul’s continued support for Cambodian industry, especially in the processing segment, suggesting a “plus one” business model, in which Korean companies could expand supply chain networks developed in Thailand or Vietnam to Cambodia.

In expectation of a considerable jump in Korean investment into Cambodia driven by the Kingdom’s new investment law, the premier suggested forging special cooperative partnerships in the fields of food processing and agro-industry for export to the East Asian nation.

Ministry of Commerce spokesman Pen Sovicheat told The Post early this month that the FTA would come into force 60 days after both countries deposit their instrument of ratification – which he called a “notification letter” – a document by which a country formally agrees to be bound by a treaty. He voiced confidence that the deal would enter into effect no later than June 30.

Cambodia Chamber of Commerce vice-president Lim Heng told The Post that the private sector is looking forward to the FTA, which he said is “more favourable” than a similar pact that the Kingdom struck with China – especially the tariff concessions on agricultural products.

"The agreement with Korea is more liberal than China's because tariffs on agricultural products are almost zero, whereas China’s still has some agricultural products taxed, such as rubber. On the other hand, the commerce ministry says it will pursue further negotiations with China," he said.

The bill authorising the ratification of the FTA was enacted into law by a Royal Code signed by the King on January 29.

Sovicheat previously reported that the agreement would grant more than 10,000 Cambodian goods duty-free access to South Korea.

Under the deal, 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.

The two deals are expected to deliver significant gains to bilateral trade flows between Cambodia and South Korea, which grew 9.015 per cent last year to $965.132 million, from $885.322 million in 2020, according to data from the Korea International Trade Association (Kita).

In 2021, Cambodian exports to South Korea amounted to $341.503 million, up by 7.353 per cent year-on-year from $318.112 million, while imports clocked in at $623.628 million, rising by 9.947 per cent from $567.210 million in 2020.

Cambodia’s trade deficit with South Korea widened by 13.258 per cent from $249.099 million in 2020 to $282.125 million last year.

In December alone, bilateral trade was to the tune of $95.395 million, a 10.966 per cent uptick from $85.968 million in December 2020. Of that, Cambodia’s exports amounted to $32.439 million, rising by 23.916 per cent from $26.179 million, and imports clocked in at $62.955 million, up by 5.295 per cent from $59.789 million.

MOST VIEWED

  • All Covid restrictions for inbound travellers lifted

    Cambodia has apparently taken the final step towards full reopening of the country without Covid-19 restrictions by removing all requirements for inbound travellers, who until now had to show health certificates indicating that they have tested Covid-19 negative in the past 72 hours as well as

  • Typhoon Noru brings flash floods – 16 dead

    An official warned that that the 16th typhoon of the season, Noru, had brought heavy rains to areas the Mekong River and flooded thousands of homes in the provinces bordering Thailand. As of September 27, the death toll from the flooding had risen to 16. National Committee

  • Cambodia stands firm on 5PC: No invite for Myanmar to ASEAN Summit this year

    Cambodia has not invited Senior General Min Aung Hlaing, chairman of Myanmar’s ruling State Administration Council (SAC), to the 40th and 41st ASEAN Summit and related meetings scheduled for next month in Phnom Penh. The government will instead invite a non-political representative from Myanmar

  • Mushrooming borey projects and home financing – a cause for concern?

    A spurt in housing developments is typically a sign of a growing economy but underneath all that might lay some anxiety of credit growth as developers offer financing to buyers at higher rates, an activity the central bank identifies as ‘shadow banking’ Earlier this year,

  • Thai Senate delegates in Cambodia to discuss anti-graft co-op

    A delegation from Thailand's Senate was in Phnom Penh on September 28 to meet their Cambodian counterparts to discuss strategies for fighting corruption and enhancing cooperation. The Thai delegates were from its Senate’s Committee on Studying and Inspecting Corruption, Misconduct and Strengthening Good Governance. They

  • Hun Sen’s rare visit to Cuba: What’s going on?

    Back on August 17, Prime Minister Hun Sen announced that he would deliver a speech at the 77th UN General Assembly (UNGA) at the UN headquarters in the US’ New York City, visit Cuba and attend the state funeral of the slain Japanese Prime Minister Shinzo