The loss of trade preferences in Europe would be more than offset if Cambodia manages to enter a free trade agreement (FTA) with China, said Cambodian Chamber of Commerce (CCC) president Kith Meng.
Meng on Tuesday said landing an FTA with the second-largest economy in the world will boost all sectors of economic activity in the Kingdom, allowing Cambodians to finally forget the losses incurred by the EU’s recent decision to partially withdraw the Everything But Arms (EBA) scheme.
He was speaking at the Cambodia Customs Forum on Tuesday, an event organised by CCC in collaboration with the General Department of Customs and Excise of Cambodia (GDCE).
“Cambodia is currently in talks with our Chinese friends to enter an FTA. If Cambodia were to have an FTA with China, I believe people will stop talking about the EBA. A lot of new factories will open up,” Meng said.
The real estate sector stands to reap enormous benefits from such a deal, he said, adding that: “If you wish to sell land, please wait a bit longer. Wait until we have the FTA, or you’ll regret it.”
In a press release issued last week, the Ministry of Economy and Finance said the first round of negations for the FTA have concluded. Negotiations will continue soon, and the deal is expected to be signed before the end of the year.
The ministry said the FTA would allow Cambodia to expand and diversify exports to the Chinese market as the Kingdom would enjoy preferential tax treatment. The agreement will reduce unnecessary procedures that hamper trade.
Cambodia Freight Forwarders Association president Sin Chanthy said an FTA with China would bolster economic growth, but noted that Cambodia must work on enhancing the quality of its products to make the most of the agreement.
“Trade between Cambodia and China is already quite large, so having this trade agreement will be good for economic growth in all sectors,” he said.
GDCE director-general Kun Nhem said Cambodia is now focusing on reforming its institutions, strengthening law enforcement, and improving the investment and business environments.
“Cambodia is implementing deep reforms and strategies in all areas,” he said.
Cambodia’s exports were worth $10.9 billion in the first nine months of last year, with China ranking as the fourth-largest buyer of Cambodian goods and accounting for seven per cent of exports, a National Bank of Cambodia report said.