The border clashes with Thailand have tempered bilateral trade this year, though the election of more Cambodia-friendly Puea Thai have led to hopes that growth will resume this years, officials say.

“The political issue is the main cause of the drop, leading to less imports than before,” Thai Embassy commercial counsellor Jiranan Wongmongkol said yesterday.

Violence had erupted along the border between Cambodia and Thailand in February and again in April, resulting in several casualties on both sides.

Trade between Cambodia and Thailand totalled US$1.43 billion in the first six months, an increase of about one per cent on the period last year, according to figures from the Foreign Trade Promotion Office.

Thailand’s exports to Cambodia increased by three per cent to $1.332 billion during the period, though Cambodia’s shipments to its western neighbour decreased by 18 per cent in the six months compared year-on-year, hitting $98 million.

Meanwhile, Cambodia’s total overall trade increased 49 per cent during the first six months of 2011 to $5.473 billion, according to previous Ministry of Commerce data.

The political issue is the main cause of the drop, leading to less imports than before

University of Cambodia economics lecturer Chheng Kimlong said approved investment from Thailand had shown signs of decline this year.

“Thailand’s [approved] direct investment occupied an 18 per cent share of the total in Cambodia in 2008 and 2009. But it dropped to 0.8 per cent last year,” he said.

The relationship between businesses on both sides of the border had declined during the conflict, he said.

“It’s quite simple. When they see uncertainty, they will suspend or stop their trading or investing activities,” he said.

He said the election of Puea Thai brought hope that both countries would improve their trading relationship into the future. “This will draw investor and businessmen’s attention. It tells us that people are getting their confidence back,” he said.

Minister of Commerce Cham Prasidh said last month that the recently elected Puea Thai government would improve Cambodia's trade situation with Thailand.

“I do believe that our trade relations will improve, as well as the armed confrontation along the border,” he said.

“The Puea Thai party prefers peacefully negotiation with its neighbours – especially if they have a strong relationship with our government.”

Cham Prasidh said trade shows should increase bilateral trade ties further.

The Thai Embassy’s Jiranan Wongmongkol said Cambodian consumers would support Thai products, as consumers trusted their quality.