Logo of Phnom Penh Post newspaper Phnom Penh Post - South Korea FTA set to be signed Oct 26

South Korea FTA set to be signed Oct 26

Content image - Phnom Penh Post
Minister of Commerce Pan Sorasak (right) speaks with his then-South Korean counterpart Yoo Myung-hee on February 3. Heng Chivoan

South Korea FTA set to be signed Oct 26

The Cambodia-South Korea Free Trade Agreement (CKFTA) is set to be signed on October 26, ushering in a new chapter that will open up fresh avenues in trade and investment between the two Asian nations, according to a senior Ministry of Commerce official.

Ministry undersecretary of state Pen Sovicheat told The Post on October 20 that Minister of Commerce Pan Sorasak and the South Korean trade minister would virtually endorse the CKFTA.

This comes more than eight months after the agreed minutes on the conclusion of negotiations over the trade deal were signed, cementing the terms and conditions for the free trade agreement (FTA).

Under the CKFTA, coupled with the Regional Comprehensive Economic Partnership (RCEP), the Kingdom will lift tariffs on 93.8 per cent of goods traded, with South Korea scrapping duties on 95.6 per cent, Yonhap News Agency reported in February.

Under the deal, more than 10,000 Cambodian goods will be granted duty-free access to South Korea, according to Sovicheat.

Improved access to the South Korean market will create a wealth of opportunities for primary and processed agricultural goods; textiles-based merchandise such as garments, footwear and travel bags; rubber; spare parts; electronic components; light industrial products; and a host of other wares churned out inside and outside of special economic zones (SEZ) in the Kingdom, he said.

The FTA will also facilitate the import of electronics, pharmaceutical products and auto parts, he added.

He portended that heightened purchases of South Korean intermediate and capital goods such as raw materials, machinery and other equipment used in domestic production would lead to a meaningful surge in productivity and quality of goods for export.

Much like the Cambodia-China Free Trade Agreement, the CKFTA “is another indicator of the efforts and successes of the Ministry of Commerce in opening up markets for the export of Cambodian goods", he said.

Bilateral trade between Cambodia and South Korea in the first half of 2021 was worth $451.98 million, up by 6.72 per cent from $423.51 million in the same period last year, according to data from the Korea International Trade Association (Kita).

In January-June, Cambodian exports amounted to $159.4 million, down by 1.6 per cent year-on-year from $162.06 million, and imports clocked in at $292.59 million, up by 11.9 per cent year-on-year from $261.45 million. This means that the trade deficit widened by 34.0 per cent from $99.4 million to $133.2 million.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, previously told The Post that the two countries have cultivated strong trade relations, which will become all the more “special” when the FTA enters into force.

Even so, he encouraged the Kingdom to incorporate more commercially viable commodities into its export portfolio, to make the most out of its trade arrangements with trading partners.

“The diversification of products for export to foreign markets will better position Cambodia to excel in international trade.”

MOST VIEWED

  • Construction begins on $1.5B Kampot seaport

    The International Multi-Purpose Logistics and Port Centre, principally invested by Kampot Logistics and Port Co Ltd and projected to cost $1.5 billion, has officially broken ground in Bokor town, Kampot province. The multi-purpose logistics and port centre, located in Prek Tnaot commune, will be built on

  • Cambodia eyes key role in electronics, auto hubs in SEA

    Two roadmaps, part of the LDC’s economic diversification plan, were designed to see it through its migration process, but experts say the journey might be arduous, particularly in the presence of two established hubs in the region By 2028, Cambodia hopes to have exited the

  • Hun Neng, lawmaker and PM’s brother, passes away aged 72

    Hun Neng, chairman of the 4th Commission of the National Assembly, has passed away from heart disease at the age of 72 on the afternoon of May 5, according to the Ministry of Information. Hun Neng is the older brother of Prime Minister Hun Sen, and was

  • CCC team off on US business trip

    The Kingdom’s leading economists and private sector representatives have called on the US to renew its tax preferential status for Cambodian exports, as a Cambodia Chamber of Commerce (CCC) delegation departed for a weeklong business visit to the US, where they will meet with

  • PM meets with US business giants

    Prime Minister Hun Sen has met with a number of major US companies who have expressed interest in investing in Cambodia, in a meeting convened by the US-ASEAN Business Council (US-ABC). A delegation of companies – including Amazon, Meta, Chevron, ConocoPhillips, ExxonMobil, Ford, Visa and Pernod

  • Massive stingrays may live in Mekong’s deep pools

    US scientists have suggested that unexplored deep pools in the Mekong River in an area of Stung Treng could potentially be home to significant populations of giant freshwater stingrays, one of the world’s largest freshwater fish species. This comes as a fisherman hooked a 180