Officials and prominent business players brainstormed on the possible contents of the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA) as well as local products to be proposed as priority items under the deal during talks with Abu Dhabi going forward, at a first-of-its-kind consultation meeting held at the commerce ministry on November 14.
The meeting comes after Cambodia and the UAE held the first round of formal talks on the CEPA, in Abu Dhabi from October 24-26, with results by and large lauded as “remarkable”.
A CEPA is a type of free trade agreement (FTA) generally designed for a more holistic coverage beyond just commodities, and can contain provisions for services, investments, dispute resolution, intellectual property rights, government procurement, and additional forms of specialised economic cooperation.
Ministry of Commerce secretary of state Tek Reth Kamrong said the CAM-UAE CEPA would open new markets, increase investment opportunities and deepen cooperation in other economic fields, thereby enhancing the overall Cambodian trade and investment liberalisation environment and bringing economic windfall to the Kingdom.
Participants explored market demand in the seven-emirate union, as well as some of the requirements that the predominantly Muslim country may be looking to set for imports from Cambodia, in terms of rules of origin, sanitary and phytosanitary standards, and compliance with Islamic conventions, the ministry noted in a statement.
Cambodia Logistics Association (CLA) president Sin Chanthy, who attended the meeting, commented on the importance of the participation of all relevant parties on devising a list of promising locally-made goods for ministry officials to present to the UAE for possible preferential treatment under the CEPA.
“The ministry wanted stakeholders – such as producers, exporters and transporters – to present their issues at the meeting, in order to attain a valuable [CEPA] that benefits all sectors,” he told The Post on November 15.
As is the norm with FTAs, Chanthy believes the deal will eliminate all tariffs on a number of Cambodian exports to the Middle Eastern country.
“When the agreement between the two countries materialises, it’ll be very beneficial for Cambodia to export goods to the United Arab Emirates, and merchandise imported from the UAE will also be cheaper than before,” he said.
Keo Mom, CEO of Ly Ly Food Industry Co Ltd, one of the Kingdom’s largest food processing enterprises, declined to comment on the particular goods mentioned at the meeting, noting only that it is still too early to compile a meaningful list.
“The meeting sought to discuss how to boost trade between the private sectors of the two countries as well as preparations to that effect,” she said, remarking on the high development level of the UAE economy.
Ministry of Commerce spokesman Penn Sovicheat, who also attended the meeting, was unavailable for comment on November 15, but he had told The Post last month that the CAM-UAE CEPA would liberalise trade to a greater level than Cambodia’s bilateral FTAs with China and South Korea.
The deal will also underline opportunities for collaboration in oil, mineral resources, meat production and agriculture, and other key areas, he said, noting that the UAE has signed CEPAs with India, Israel, and most recently, Indonesia.
He shared that the initial plan was for a more standard FTA between Cambodia and the UAE that by and large focuses on goods and services trade, investment and economic cooperation. However, more opportunities were identified after further deliberation, prompting the upgrade to a CEPA, he said.
He added that the Kingdom is still exploring the perceived vast export potential for agricultural products, textile-related items, and general components to the UAE, and by extension, the entire Middle East.
“We hope that the agreement will inspire players from Middle Eastern countries to invest in Cambodian manufacturing for export back there. Entering UAE markets is like opening a gateway for exports to regional countries, due to all the agreements between them,” Sovicheat said.
Bilateral trade between Cambodia and the UAE hit $151.547 million in 2021, up 52.66 per cent from $99.271 million a year earlier, according to the commerce ministry.
Cambodia’s exports to the UAE accounted for $52.116 million, up 18.93 per cent from $43.822 million in 2020, and imports $99.431 million, up 79.32 per cent from $55.449 million. The Kingdom’s trade deficit with the UAE expanded 306.95 per cent to $47.315 million in 2021, from $11.627 million a year earlier.
Major items traded between the two countries include garments, footwear, bicycles, travel goods, tobacco, milled rice, electrical equipment, vehicles and components thereof, rubberised asphalt, tuber sugars, animal feed, oil, plastics and paper.