The Cambodia-Canada goods trade volume stood at $332.184 million in the first five months of 2023, down 28.07 per cent year-on-year and down 29.89 per cent half-on-half, according to Customs (GDCE).
This is despite the fact that the Kingdom shipped more merchandise in May to the G20 (Group of 20) member state than it did in any other month this year, at a whole 21.36 per cent higher than the monthly average – and also marking a 42 per cent jump from April.
In the January-May period, Cambodian goods exports to Canada amounted to $324.087 million, down nearly 28.25 per cent year-on-year and down 28.99 per cent half-on-half, according to provisional GDCE data in “International Merchandise Trade Statistics” bulletins.
The Kingdom imported $8.097 million worth of goods from the world’s ninth largest economy, down 20.0 per cent year-on-year and down 53.4 per cent half-on-half.
Cambodia’s trade surplus – the amount by which a country’s exports exceed its imports – with the North American nation for the five-month period clocked in at $315.991 million, narrowing by 28.44 per cent year-on-year as well as by 28.03 per cent half-on-half.
Canada was Cambodia’s 10th biggest trading partner for the period, representing 1.722 per cent, 3.529 per cent and 0.080 per cent of the Kingdom’s international trade ($19.293 billion), exports ($9.183B) and imports ($10.109B), respectively, GDCE figures indicate.
Royal Academy of Cambodia economist Hong Vanak commented that the large, economically-developed nation is a major buyer of Cambodian textile-related goods – including “travel goods” – especially so before Covid-19.
“Travel goods” is a local designation that includes suitcases, backpacks, handbags, wallets and similar items, generally corresponding to heading 4202 of the Harmonised System (HS) of Tariff Nomenclature.
However, Vanak said, consumers have cut back on their non-food purchases as most households suffer income squeeze as a result of the current global economic downturn. Still, he stressed, a healthy world economy leads to greater consumer spending, including on travel goods.
“The global economic crisis has caused a sharp drop in orders from Canada for Cambodia, [mostly for textile-linked items]. Since Canadian orders make up a large portion of the bilateral trade volume, this growth will only be achievable if the status of global economic growth improves and tourism recovers,” he opined.
Vanak predicted that as more people start travelling again, demand for garments, footwear and travel goods will soar, and stated that the Kingdom is well-known for being a major supplier of textile-related products, including to several well-known firms and brands.
GDCE statistics indicate that, in May alone, Cambodian exports to Canada were $78.661 million, down 29.0 per cent year-on-year but up 42.09 per cent month-on-month, and imports were $2.30 million, down more than 24 per cent year-on-year and down nearly 27 per cent month-on-month.
Canada was Cambodia’s sixth largest export destination in May, representing 1.960 per cent, 4.035 per cent and 0.105 per cent of the Kingdom’s international trade ($4.132B), exports ($1.949B) and imports ($2.182B), respectively.
In a previous interview, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng drew attention to the observed correlation between international events and foreign trade, remarking that significant negative issues tend to result in disruptions to trade.
He attributed the 21.61 per cent year-on-year fall in Cambodia-Canada trade reported by the GDCE for the first quarter – ended March 31 – to the Russo-Ukrainian conflict and overall global economic woes.
An end to the armed conflict would “surely” allow for international trade momentum to build, as well as enable a recovery in Cambodian exports to Canada and other “key target” markets, he posited.
“I’m confident that international trade between Cambodia and Canada will continue to show positive signs from the second quarter onwards,” Heng said, adding that the CCC’s representative office in Toronto is working to bring Canadian direct investment to the Kingdom as well as to create markets for Cambodian products.
According to Heng, high-potential Cambodian exports to Canada encompass garments, footwear and travel goods, electrical and electronic components, and bicycles, whereas the bulk of imports are electronics.
According to the National Bank of Cambodia (NBC), foreign direct investment (FDI) inflows into the Kingdom between August 5, 1994, when the old Law on Investment was enacted, and December 31, 2021 totalled 168.8 trillion riel ($41.0 billion), rising by 11.2 per cent from the nearly 152 trillion riel recorded by end-2020.
Canada was the ninth largest investor in the Kingdom for the period with $1.1 billion, or a 2.8 per cent market share, after the Greater China region, South Korea, Singapore, Vietnam, Japan, Malaysia, Thailand and the UK. The Greater China region encompasses mainland China, Hong Kong, Macau and Taiwan.
According to the GDCE, the Cambodia-Canada merchandise trade in 2022 was valued at $1.154 billion, up 16.06 per cent against 2021.
Cambodian goods exports to and imports from Canada amounted to $1.121 billion and $33.877 million, respectively up 17.36 per cent and down 15.07 per cent year-on-year, expanding the Kingdom’s trade surplus with the American country by 18.77 per cent to $1.087 billion versus $914.940 million in 2021.
Canada was the fifth largest buyer of Cambodian merchandise in 2022, accounting for 4.98 per cent of the global total of $22.483 billion, compared to the top four: the US ($8.969 billion; 39.89%), Vietnam ($2.169 billion; 9.65%), mainland China ($1.241 billion; 5.52%) and Japan ($1.173 billion; 5.22%).
No breakdown was immediately available of the particular items traded between Cambodia and Canada at any point during the 2022-2023 period.
However, according to online portal Trading Economics, the majority of the $954.83 million in Cambodian exports to Canada in 2021 constituted textile-related items, topped by “articles of apparel, knitted or crocheted” at $593.05 million, followed by “articles of apparel, not knitted or crocheted” ($141.91 million) and “footwear, gaiters and the like” ($86.71 million).
The next items were: “other made-up textile articles; sets” ($42.69 million), “articles of leather; saddlery and harness; travel goods” ($40.36 million), “furniture, lighting, signs, prefabricated buildings” ($14.30 million) and “vehicles other than railway, tramway” ($9.10 million) – the last of which includes bicycles.
The next four were: “rubber and articles thereof” ($7.45 million), “plastics and articles thereof” ($6.60 million), “wood and articles of wood; wood charcoal” ($3.75 million) and “explosives, pyrotechnics, matches, pyrophorics” ($3.14 million).
For reference, the 11 categories respectively correspond to chapters 61, 62, 64, 63, 42, 94, 87, 40, 39, 44, 36 of the harmonised tariff schedule.