Cambodia and Russia are planning a joint feasibility study on a potential free trade agreement (FTA) aiming to reinforce trade and investment ties between the two countries and offset lacklustre import/export figures exacerbated by Covid-19.
Ministry of Commerce secretary of state Sok Sopheak said this on December 1 when he led a ministerial delegation to meet newly-minted Russian ambassador to Cambodia Anatoly Borovik via video link.
Borovik stressed that Covid-19 had led to a global decline in consumer spending, orders and goods transport, as well as a deceleration of bilateral trade growth between the two countries.
He praised the government leadership for taking effective measures against the pandemic, noting the absence of Covid-19-linked fatalities.
Sopheak pointed out achievements of the Kingdom’s FTA strategy, including signing an agreement with China on October 12 and completing the fourth round of talks with South Korea on another.
These, coupled with the Regional Comprehensive Economic Partnership (RCEP) agreement inked on November 25 and existing agreements within the ASEAN Plus One framework, have provided the Kingdom access to a wide range of markets, he said.
ASEAN Plus One refers to ASEAN’s respective cooperation mechanism with Hong Kong and mainland China, India, Japan, South Korea, Australia and New Zealand.
Sopheak said: “In this context, Cambodia needs more investment from the Russian Federation, especially in the field of light and medium machinery to strengthen the Cambodian industry’s competitive edge and increase exports.”
In this spirit, he said, Cambodia expresses its intent to conduct a feasibility study on a bilateral FTA with Russia as soon as possible.
He requested the Russian side to invite Cambodian businessmen and investors to events organised by the Chamber of Commerce and Industry of the Russian Federation down the line and introduce them to a new world of trade and investment opportunities.
Bilateral trade between the two countries was to the tune of $45.15 million in the first 10 months of the year, representing an increase of 4.5 per cent year-on-year, ministry figures show.
Of that amount, Cambodia exported some $38.75 million worth of products, down 4.8 per cent year-on-year, and imported $6.4 million, gaining a gargantuan 155.68 per cent year-on-year, the data show.
Last year, total trade between the two countries reached more than $55.39 million, sinking 40.44 per cent from the $93.00 million logged in 2018, according to the ministry.
The Kingdom is also in FTA talks with the Eurasian Economic Union (EAEU), a common market comprised of five nations of the former Soviet Union – Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.
The EAEU represents a combined population of 183 million and a gross domestic product (GDP) of $5 trillion, according to the Washington, DC-based International Monetary Fund (IMF).
In December, minister Pan Sorasak pointed out that an FTA with the EAEU would provide a welcome impetus for industrial diversification and expansion of financial services, transport, digital economy and agricultural services.