The senate on September 20 unanimously passed (38-0) two draft laws authorising the ratification of the Regional Comprehensive Economic Partnership (RCEP) agreement and the bilateral Cambodia-China Free Trade Agreement (CCFTA).
The two trade agreements are expected to help lift exports and investment to Cambodia, the upper house of the Parliament said in a statement.
Seen as the largest multilateral trade agreement in the world, the RCEP was signed virtually between 15 countries, comprising the 10 ASEAN member states and China, Japan, South Korea, Australia and New Zealand on November 15. India pulled out of the pact after learning that its trade tariff losses would outstrip benefits.
Defending the bill before the Senate, Minister of Commerce Pan Sorasak argued that the RCEP was a high-quality, modern, comprehensive, mutually-beneficial agreement that would ensure smooth and seamless supply chain expansions and regional investment processes.
Citing RCEP negotiations and research by Jakarta-based Economic Research Institute for ASEAN and East
Asia (Eria), he said the deal would boost the Kingdom’s gross domestic product (GDP) an additional two per cent, increase exports by an extra 7.3 per cent and raise investment by an added 23.4 per cent.
“This agreement will also send the world a signal of support for a multilateral free trade system based on legal principles,” Sorasak said, highlighting that the deal would also provide a significant contribution towards a faster economic recovery in Cambodia and the region from the Covid-19 crisis.
The Senate added that the RCEP has a combined GDP to the tune of $26.2 trillion, or 30 per cent of world GDP, engages 2.2 billion people, and accounts for about 28 per cent of global trade.
“The RCEP aims to foster an open environment that facilitates regional trade and investment expansion and contributes to global economic growth and development.
“This agreement is essential to provide opportunities for countries in the region, to safeguard the advantages of trade liberalisation and promote economic cooperation and recovery from the Covid-19 crisis,” it added.
It said the CCFTA will also broaden the market for Cambodian agricultural products such as fruits, vegetables and processed foods, which it emphasised the Kingdom is fully capable of producing in compliance with recognised hygiene rules and standards.
The deal will also create new jobs for Cambodians, provide investment opportunities for Cambodian businesspeople looking to provide goods and services to the Chinese market, as well as accelerate technological and knowledge transfer, the acquisition of new concepts and skills, and other forms of knowledge spillover from foreign direct investment, it added.
The CCFTA provides additional clarifications regarding procedures relating to the rules of origin, customs, sanitary and phytosanitary measures, and other technical barriers to trade to facilitate commercial exchanges across frontiers, it noted.
In summary, the two trade deals were drawn up to “design and create an investment and political environment that is conducive to foreign investors”, the Senate said.