Two high-ranking Cambodian officials have issued fresh rallying calls for South Korean entities to invest in the Kingdom and take advantage of its bilateral and multilateral trade pacts, especially the Cambodia-Korea Free Trade Agreement (CKFTA) that took effect on December 1.
Minister of Commerce Pan Sorasak and Council for the Development of Cambodia (CDC) secretary-general Sok Chenda Sophea were speaking at the Cambodia-Korea Business and Investment Forum on January 27, 2023 in Seoul, South Korea, the commerce ministry said in a statement later that day.
Two senior Korean officials also took part in the event – trade minister Ahn Duk-geun and the foreign ministry’s deputy economic affairs minister, Kang Jae-kwon – along with representatives of 150 companies from either country.
The statement noted that five memorandums of understanding (MoU) were signed at the ceremony, in a bid to create new opportunities and establish business and investment networks between the two countries.
One concerned a joint venture between “World Bride [sic] Group” and “Luxury Brand Group”, and another covered market and supply information sharing between “Season Fresh Cambodia” and “Empire Trading Co Ltd”.
The third was a “comprehensive strategic partnership agreement” (CSPA) between the Cambodia Food Manufacture Association (CFMA) and “Empire Trading Co Ltd” on a variety of targeted exchanges aimed at supporting bilateral investment and trade.
The fourth was another CSPA, between “Alliances of Cambodia Agricultural Products Exporters Co Ltd” and “AGT Corporation”, on business and marketing partnerships as well as technology exchanges.
And the fifth was a bilateral partnership agreement between the Kampot-Kep Chamber of Commerce and “Miracle City World Group” on information exchange as pertaining to social development, education, culture, arts and sport.
Delivering the opening remarks, Sorasak hailed the fruits of cooperation between the two countries, mentioning the CKFTA as well as development in the trade, investment, economic and “all” other spheres, the statement said.
He highlighted the need for close and active cooperation among private sector actors of both countries through dialogue, trade fairs, business matching and similar avenues to gain a better grasp of the export market and associated demand, and thereby unlock new opportunities, consolidate business and investment networks, and encourage joint ventures.
Also at the forum, Ahn propounded that the CKFTA will further propel Cambodia-South Korean trade and investment, providing an overall boost in confidence, and also spoke highly of relations between the two countries, especially in the fields of trade, investment and human resource exchanges, the statement noted.
He remarked that the free trade agreement (FTA) focuses on the expansion and strengthening of supply chain infrastructure as per common interests, as well as cooperation in digital and green economic development, including clean energy initiatives.
Kang voiced optimism that the CKFTA, coupled with the Regional Comprehensive Economic Partnership (RCEP) and the new Cambodian Law on Investment – promulgated on October 15, 2021 – would ratchet up bilateral trade and investment flows, the statement affirmed.
Speaking at the same event, the CDC’s Chenda Sophea brought up a concessional loan agreement signed at end-2022 for a Cambodia-Korea Friendship Bridge between the capital and Kandal province’s Arey Ksat town, the council said in a separate statement.
Although noting that the bridge is slated to cost about $246 million, he contended that the project could provide a significant shot in the arm for the local transport and logistics industry to compensate for the costs.
Reflecting on the modern technologies and “determined spirit to overcome all obstacles” that have been brought by South Korean investors to the Kingdom, Chenda Sophea called on more players from the peninsular country to enter the Cambodian market and profit from FTA use as well as the incentives granted by the new investment law.
He especially encouraged Korean automotive and electronics investors to consider incorporating Cambodia into their regional supply chains, pointing out that the government on December 9 approved an official roadmap for local development in these domains.
The roadmap is designed to turn Cambodia into a regional and global production hub for automotive and electronic components, draw in more investment in the field, and boost exports by billions of US dollars in the long run.
Sorasak on January 27 also met Korea Trade and Investment Promotion Agency (KOTRA) president Yu Jeoung-yeol at KOTRA headquarters to promote two-way trade and investment, the commerce ministry said in a notice on the same day.
The minister presented Cambodian agro-processing and packaging as a winning investment opportunity, particularly of cassava and rubber as well as banana, durian, mango and other tropical fruits, the quality and diversity of which he suggested could find favour with Korean consumers.
Seemingly open to the idea, Yu opined that the CKFTA will step up cooperation in digital technology and agriculture, the notice said.
The KOTRA president added that his agency is looking to add more investors to the 200 Korean companies currently investing in Cambodia, especially in the aforementioned areas, in addition to vehicle components and wood products.
According to Sorasak, the commerce ministry expects the CKFTA to fuel Cambodian exports to South Korea, particularly garments, footwear, bags and textile-related items, general spare parts, electronics, rubber and agricultural products.
General Department of Customs and Excise (GDCE) data show that the Cambodia-South Korea merchandise trade in 2022 was valued at $778.924 million, up 0.63 per cent over 2021.
Cambodia’s exports to and imports from South Korea came in at $233.638 million and $545.286 million, respectively, up 20.38 per cent and down 5.98 per cent year-on-year, narrowing the Kingdom’s trade deficit with the East Asian country by 19.2 per cent, from $385.871 million in 2021 to $311.648 million in 2022.