The second round of formal negotiations for the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA) concluded on December 21, further building confidence in the bilateral treaty’s reinforcing effects on economic growth in the Kingdom.
This three-day follow-up round of talks was held in Phnom Penh, nearly two months after the first, which was organised in the Emirati capital of Abu Dhabi from December 19-21.
A CEPA is a type of free trade agreement (FTA) that is generally designed for a more holistic coverage beyond just commodities, and can contain provisions for services, investments, dispute resolution, intellectual property rights, government procurement, and additional forms of specialised economic cooperation.
The Cambodian negotiation team is headed by Ministry of Commerce secretary of state Tek Reth Kamrong, while the UAE’s is led by Emirati Ministry of Economy assistant undersecretary for foreign trade affairs Juma al-Kait.
The latest talks ironed out several points of disagreement, to help ensure a comprehensive and long-term yet flexible framework for the CEPA that better establishes common positions and interests, the commerce ministry affirmed in a statement.
It indicated that progress was made on provisions concerning key areas to sustainable and inclusive socio-economic development such as: trade in goods and services; investment; tourism; finance; agriculture; electronic commerce; education; industry; energy; and technology.
Reth Kamrong and al-Kait signalled that the second round had generally gone “smoothly” and “efficiently”, with “pleasant” results based on common and complementary interests, in line with international trade regulations, the statement said.
Both teams are confident that the deal will significantly enhance bilateral cooperation and strengthen friendly relations between the two countries, as well as improve connectivity, particularly between ASEAN and the Middle East, it said, adding that the third round of talks is set to be held in the UAE next year.
In late October, commerce ministry spokesman Penn Sovicheat had told The Post that CEPA talks were expected to be concluded in 2023.
Meanwhile, speaking to The Post on December 22, Royal Academy of Cambodia economics researcher Ky Sereyvath stressed that the UAE’s high-income status and lack of agricultural production underscore the potential of a CEPA with the seven-emirate union for the Cambodian economy.
Offering an example, he drew attention to the UAE economy’s heavy reliance on revenues from petroleum and natural gas, services and tourism.
“The United Arab Emirates is a wealthy country, and when this trade agreement comes into force, it’ll bring a bounty of benefits to Cambodia. This is a superb opportunity for Cambodian agricultural exports,” he claimed.
Although admittedly unaware of the particular oil and gas issues discussed at the CEPA talks, Sereyvath suggested that the Kingdom could benefit from imports and investments from Emirati players in the field, arguing that the UAE is a major oil producer and exporter as well as a member of OPEC (Organisation of the Petroleum Exporting Countries).
Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that the pact could bring in investors to the local oil, gas and energy markets, as well as spur exports to the UAE and other Arab countries, many of which he noted are closer to the Kingdom than Europe or the US.
“I’m optimistic that access to the UAE market will boost Cambodian exports, especially of agricultural products, which are rather scarcely produced in the Arab world, although production in Cambodia is increasing every year,” he said.
For reference, Cambodia earned nearly $3.070 billion from agricultural exports in the first 10 months of this year, preliminary data based on exporters’ invoices released by the Ministry of Agriculture, Forestry and Fisheries showed.
Sovicheat, the commerce ministry spokesman, could not be reached for comment by press time.
However, in a previous interview with The Post, he claimed that the bilateral CEPA would liberalise trade to a greater extent than Cambodia’s FTAs with China and South Korea, both of which took effect this year.
The deal will also underline opportunities for collaboration in oil, mineral resources, meat production and agriculture, and other important areas, he said, noting that the UAE has signed CEPAs with India, Israel and Indonesia.
He added that the Kingdom is still exploring the “vast” export potential for agricultural products, textile-related items, and general components to the UAE, and by extension, the entire Middle East.
“We hope that the agreement will inspire players from Middle Eastern countries to invest in Cambodian manufacturing for export back there. Entering UAE markets is like opening a gateway for exports to regional countries, due to all the agreements between them,” Sovicheat said.
According to the commerce ministry, trade between the two countries totalled $279 million in the first eight months of 2022, up 40 per cent year-on-year. And despite the Covid-19 crisis, Cambodia-UAE trade in 2021 rose by 52.66 per cent to the tune of $151.547 million, from the $99.271 million recorded in 2020.