Phnom Penh and Beijing have agreed to bring the major bilateral Cambodia-China Free Trade Agreement (CCFTA) into force in January, and renewed a pledge to boost trade to $10 billion per annum, according to Prime Minister Hun Sen.
The prime minister made the remark on November 15 at a virtual meeting with his Chinese counterpart Li Keqiang to explore avenues to strengthen economic ties between the two countries.
Hun Sen lauded China for attaining 9.8 per cent economic growth in the first nine months of this year – a figure reported by the Chinese National Bureau of Statistics (NBS), which the prime minister said tops the rates logged by most if not all countries.
Li vowed to push for joint mechanisms and work plans between the two sides to draw up and renegotiate quotas on the direct import of Cambodian milled rice and other agricultural goods to China.
Ministry of Commerce spokesman Pen Sovicheat said that for the CCFTA to enter into force, both parties must sign a joint notification, which indicates that their respective internal procedures have been completed.
He noted that preparation of the notification on the Cambodian side falls on the Ministry of Foreign Affairs and International Cooperation, which he said had submitted the required draft documents to the Chinese.
He affirmed that the deal was set to enter into force in January as planned.
“The Ministry of Commerce hopes that the volume of trade between the two countries will continue to grow after this agreement enters into force, and especially that exports from Cambodia will increase further,” Sovicheat said.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post on November 16 that although China has long ranked as Cambodia’s largest investor, and would most likely continue to do so in the foreseeable future, the CCFTA greatly benefits the Kingdom.
He expects Cambodia to pursue similar agreements with regional and global partner countries.
The Kingdom has set an ambitious vision of becoming an “upper-middle income” country by 2030 and a “high-income” economy by 2050, as defined by the World Bank. Official designation as either status generally results in the removal from generalised systems of preferences and similar preferential arrangements granted by trade partners.
Heng said: “If we’ll no longer have the EBA [Everything But Arms trade scheme], or the GSP [Generalised System of Preferences] from the US in the future, we could urge the Royal Government to negotiate free trade agreements [FTA] with the EU as well as the US.
“The more deals, the more opportunities we’ll have for the evolution of production and export.”
However, although Hong Vanak, director of International Economics at the Royal Academy of Cambodia, believes that striking more FTAs is “a good thing”, he raises concerns over the Kingdom’s offering of commodities for trade.
“A difficult point is the commodities problem – having the kind of product that is suitable and meets their [trading countries’] needs.
“In Cambodia products and goods are still limited, and don’t meet the demand for exports,” he said.
Bilateral trade between Cambodia and China reached nearly $7.968 billion in the first nine months of 2021, increasing by more than 38.36 per cent year-on-year, the commerce ministry reported.
In January-September, the Kingdom exported $1.093 billion, up by more than 52.74 per cent year-on-year, and imported $6.875 billion, surging by 36.32 per cent compared to the same period in 2020.