Logo of Phnom Penh Post newspaper Phnom Penh Post - Cambodia signs world’s largest free trade pact

Cambodia signs world’s largest free trade pact

Content image - Phnom Penh Post
Finance minister Aun Pornmoniroth during the virtual meeting on November 15. Finance Ministry

Cambodia signs world’s largest free trade pact

A visceral hit of merriment captured Cambodia’s trade and investment sector as the leaders of 15 Asia-Pacific nations signed the blockbuster Regional Comprehensive Economic Partnership (RCEP) trade pact on Sunday.

Insiders voiced their enthusiasm for the agreement which they say will allow the Kingdom to expand trade and attract more investment from signatory countries.

Leaders of the 10 ASEAN states, Australia, China, Japan, New Zealand and South Korea witnessed the signing of the RCEP agreement via video link following the conclusion of the 4th RCEP Summit on the same day.

Notably absent from the signing was India, which withdrew from negotiations in November last year.

Minister of Economy and Finance Aun Pornmoniroth delegated authority to Minister of Commerce Pan Sorasak to sign the accord.

Marking ASEAN’s largest free trade pact, the RCEP has a combined gross domestic product (GDP) to the tune of $26.2 trillion, or 30 per cent of global GDP, and engages 2.2 billion people, according to the ASEAN Secretariat.

ASEAN secretary-general Lim Jock Hoi said: “The signing of the RCEP Agreement is a historic event as it underpins ASEAN’s role in leading a multilateral trade agreement of this magnitude, despite global and regional challenges and eight years of negotiations.

“RCEP will give a much-needed boost for a swift and robust recovery for businesses and peoples in our region, particularly during the current Covid-19 pandemic crisis.”

Singapore’s Minister of Trade and Industry Chan Chun Sing told reporters following the signing that the pact will enter into force once six ASEAN countries and three non-ASEAN partners have ratified it, as reported by Bloomberg.

Cambodia’s commerce ministry lauded the deal as a historic regional achievement that will reinforce intellectual property and investor protection, promote globalisation, and support the rules-based multilateral trading system anchored in the World Trade Organisation.

“It is an indispensable prerequisite for the principles of free and fair trade, and an important driving force for sustainable socio-economic development.

“The RCEP agreement will be also an important catalyst in contributing to economic growth, improving the livelihoods of people in the region, and helping to restore regional economic development after the Covid-19 pandemic,” it said.

Royal Academy of Cambodia economics researcher Hong Vanak told The Post last month that RCEP is a platform for ASEAN that was years in the making.

He said the deal will re-orient the trade and investment landscape in the region, encourage commercial exchanges among members and serve as a vital driving engine for the manufacturing sector.

“This means that the countries in the region will enjoy more opportunities to promote exports to other members. At the same time, the RCEP will help to promote trade flow and attract more investments with members to the region,” Vanak said.

With RCEP negotiations as a base, the Jakarta-based Economic Research Institute for ASEAN and East Asia (ERIA) found that the deal would boost the Kingdom’s 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.

The ASEAN Secretariat said: “The deal will improve market access with tariffs and quotas eliminated in over 65 per cent of goods traded and make business predictable with common rules of origin and transparent regulations, upon entry into force.

“This will encourage firms to invest more in the region, including building supply chains and services, and to generate jobs.”

It noted that the agreement comprises 20 chapters, 17 annexes and 54 schedules of commitments that cover market access, rules and disciplines, and economic and technical cooperation.

MOST VIEWED

  • WHO: Covid in Cambodia goes into new phase

    The World Health Organisation (WHO) in Cambodia said that Cambodia has reached a new phase of the pandemic with “decreasing case numbers, high vaccination coverage and a more transmissible circulating variant threatening a hidden surge”. In a press release on September 6, the WHO said that

  • 'Pursue your goals, reach out to me': Young diplomat tapped as envoy to South Korea

    Chring Botum Rangsay was a secretary of state at the Ministry of Foreign Affairs and International Cooperation before being designated as the new Cambodian ambassador to South Korea. According to her official CV published on the foreign ministry’s website, she started her first government

  • International air visitor arrivals dip 93%

    The number of foreign tourists entering Cambodia through the Kingdom’s three international airports witnessed a sharp 92.5 per cent year-on-year decline in the first seven months of this year, according to the Ministry of Tourism. The airports handled 51,729 international tourists in the January-July period versus

  • School reopening ‘offers model for other sectors’

    World Health Organisation (WHO) representative to Cambodia Li Ailan said school reopening process should be used as a role model for reopening other sectors currently mothballed by the Covid-19 pandemic. Li strongly supports the government’s decision to reopen schools, saying it is a decision

  • Covid jab drive for 6-11 age group to begin Sept 17

    Prime Minister Hun Sen has permitted Covid-19 vaccinations for over 1.8 million children aged 6-11 across the country from September 17 in order for them to return to school after a long hiatus. Hun Sen also hinted that vaccinations for the 3-6 age group will follow in

  • Is Cambodia’s microfinance sector running its course?

    Economic growth and the strength of the banking system might have prompted a slow decline of the microfinance segment that has been raising a population ‘The MFI business model is over,” opined David Van, a Cambodian investment expert, recently. He felt that in a couple