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Ministry calls for exporters to prepare for post-Brexit UK

Content image - Phnom Penh Post
A view of a container storage yard at a port terminal in Kandal province. Bilateral trade volume between Cambodia and the UK reached $813.22 million in the first 11 months of this year, falling 17.61 per cent from the $987.09 million logged in the same period last year, according to the Ministry of Commerce. Heng Chivoan

Ministry calls for exporters to prepare for post-Brexit UK

The Ministry of Commerce has informed local manufacturers and exporters that Cambodia had been designated a “least developed country” (LDC) under the UK’s Generalised Scheme of Preferences (GSP), a status that confers considerable advantages when exporting goods to the former EU member.

Pursuant to this, the ministry on December 24 called for them to apply for a “Certificate of Origin Form A” (CO Form A) to certify the origin of their goods and qualify for duty-free export to the UK from January 1.

The call came after the UK Department for International Trade on December 17 announced the list of eligible LDCs. Cambodia was included among 46 other countries.

Starting on January 1 as the post-Brexit transition phase ends, the 47 countries will be able to trade with the UK on preferential terms as determined by its GSP programme.

“Exports to the UK from these [least developed] countries have quota-free access and nil rates of import duty on all goods other than arms and ammunition,” according to the announcement from the UK’s international trade department.

While Cambodia will be granted preferential access to the UK market, the document acknowledged concerns about the country’s internal political situation.

“The UK will continue to raise human rights issues with the Government of Cambodia and continue to monitor the situation,” it said.

The ministry referred those who wish to apply for a CO Form A for their goods to its online automated system at https://co.moc.gov.kh.

Ministry spokesman Seang Thay told The Post: “Cambodia exports about $1 billion in goods each year to the UK out of a total trade volume of around $4 billion exported to the entire European market – so the UK accounts for a huge chunk of that market.

“And this preferential treatment will further boost Cambodia’s exports to the UK, as well as attract investments from businesses in other countries looking to seize this opportunity.”

Garment Manufacturers Association in Cambodia (GMAC) secretary-general Ken Loo told The Post on December 25 that the UK used the UN’s LDC classification as its criteria for countries that would receive preferential duty-free treatment.

The UK’s GSP programme essentially offers very similar terms to those the EU had granted to Cambodia under the Everything But Arms (EBA) scheme, which it partially withdrew over human rights concerns, he said.

On August 12, the European Commission (EC) officially withdrew 20 per cent of EBA from Cambodia. The suspension affects one-fifth or €1 billion ($1.23 billion) of the country’s annual exports to the EU’s 27-nation bloc.

Loo said: “The UK has [traditionally been Cambodia’s] largest market in the EU, accounting for 25 to 30 per cent of total exports to the bloc [prior to its departure from the EU].

“Starting in January, we expect to see an even larger volume of exports to the UK than before, given that we’ve retained preferential trade status with them but not the EU.”

Bilateral trade volume between Cambodia and the UK reached $813.22 million in the first 11 months of this year, falling 17.61 per cent from the $987.09 million logged in the same period of last year, according to the ministry.

Similarly, Cambodia’s exports during the period were worth $766.77 million, down 16.02 per cent from the $913.01 million posted in the first 11 months of last year, the ministry said, citing data from the Ministry of Economy and Finance’s General Department of Customs and Excise.

Cambodia’s imports from the UK were valued at $46.45 million for the period, tumbling 37.30 per cent year-on-year from $74.08 million in the corresponding months last year.

Most of Cambodia’s exports to the UK consisted of clothing, footwear, bicycles, milled rice and agricultural products, while the country’s imports from the UK mainly consisted of cars and machinery, the ministry said.

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