The Cambodia Chamber of Commerce (CCC) has urged US companies to set up factories in the Kingdom for US- and China-bound exports, so as to take full advantage of lower tariffs afforded by free trade agreements (FTA) currently in force, the CCC said in a May 14 statement.
CCC president and ASEAN Business Advisory Council chairman Kith Meng made this suggestion at a working meeting with the US Chamber of Commerce on May 13 in Washington, where he highlighted Cambodia’s existing bilateral trade pact with China as well as the Regional Comprehensive Economic Partnership (RCEP) Agreement.
John Goyer, executive director of the US Chamber of Commerce for Southeast Asia, responded that the US “intends to diversify its production into ASEAN countries” and that Cambodia is an important destination not only due to its lower costs, but also for its higher quality products.
He said Cambodian enterprises should “strengthen their capacity to be able to connect to the high value-added chain”, and announced that the US Chamber of Commerce will examine the possibility of signing a memorandum of understanding (MoU) with the CCC to help boost economic ties between the two countries, according to the statement.
CCC vice-president Lim Heng told The Post that the meeting focused on the bilateral trade agreement with China, which he raised as a reason for US companies to invest in or establish factories in Cambodia, as they would be able to export products to China duty-free. He said it was a particularly pertinent opportunity as China has now raised tariffs on imports originating from the US.
He highlighted that, in addition to bilateral trade agreements which would enable tariff-free or lower tariff exports to China, US investors could also consider exporting products to the US under the Generalised Scheme of Preferences (GSP).
He said the CCC requested that the US Chamber of Commerce facilitate regular business visits by both chambers to either country, and sought cooperation and support for the ASEAN Business and Investment Summit to be held in November.
The CCC was also said to have encouraged US companies to invest in agricultural processing plants, and to explore the potential of other sectors such as the tourism and non-garment industries.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, said that the meetings between the Cambodian government and private sector and their US counterparts are indicative of good economic relations between the two countries, and would serve to boost trade volume between the two countries.
With the Kingdom as ASEAN chair, the meetings have been an opportunity to “show goodwill by connecting with the world powers”, he said, and were especially significant as they were held in the midst of the ASEAN-US Summit.
During its visit to the US, the CCC co-hosted with US Chamber of Commerce Southeast Asia and the US-ASEAN Business Council business meetings promoting investment opportunities between more than 200 Cambodian and US companies. Held in New York and Washington, the meetings also touched on cooperation between the two chambers of commerce and ways to bolster business and investment in both countries.
In 2021, trade between Cambodia and the US climbed 32.6 per cent to $9.159 billion from $6.906 billion in 2020, US Census Bureau figures indicate.
Last year, Cambodian exports to the US amounted to $8.7453 billion, up by 33.3 per cent from $6.5624 billion in 2020, and imports logged $413.7 million, ticking up by 20 per cent year-on-year from $343.9 million.
The Kingdom’s overall trade surplus with the US over the period widened by 33.98 per cent year-on-year from $6.2185 billion to $8.3316 billion.