The Cambodia-Thailand merchandise trade increased by over one-fifth on-year in the January-October period, nearly missing the $4 billion mark, although imports from Thailand accounted for an 82.34 per cent share, Customs reported.

Despite that, it may be possible to fill the trade gap in the long run, by stepping up and improving cooperation between the two countries, as well as ensuring Cambodia’s self-sufficiency in meeting domestic demand, analysts have said.

The 10-month commodity trade between the two countries amounted to $3.952 billion, up 21.40 per cent year-on-year from $3.255 billion, with a monthly average of $395.203 million, according to the General Department of Customs and Excise (GDCE).

Cambodian exports to and imports from Thailand over the period were to the tune of $698.010 million and $3.254 billion, respectively, bouncing up by 35.98 per cent and 18.67 per cent year-on-year, with monthly means of $69.801 million and $325.402 million.

Cambodia’s trade deficit with Thailand came to $2.556 billion, expanding by 14.68 per cent on a yearly basis.

GDCE figures indicate that bilateral trade has been on a loose monthly uptrend this year, having averaged $391.606 million a month in the January-March quarter, while Cambodian exports have been on a far more noticeable monthly downtrend, recording a monthly mean of $106.06 million in the same quarter.

October showed particularly weak performance, with two-way trade amounting to $325.0 million, down 19.6 per cent year-on-year and 18.57 per cent month-on-month, while Cambodian exports totalled $42.96 million, up 16 per cent year-on-year and rebounding by 4.3 per cent from September after a 24.90 per cent month-on-month drop.

Cambodia Chamber of Commerce (CCC) vice-president Lim Heng sees the steadily growing trade flows – which he expects to keep trending up higher – as an indication of good cooperation between the two neighbouring countries’ governments and peoples.

“Aside from enjoying good bilateral relations, both nations are also members of the Regional Comprehensive Economic Partnership [RCEP], [which will enable] the volume of trade between the two countries to ratchet up even further down the line,” he said.

The RCEP is the world’s largest trade pact, signed on November 15, 2020 by the 10 ASEAN member states and five additional Asia-Pacific countries – Australia, China, Japan, New Zealand and South Korea. The deal entered into force in Cambodia and nine other nations on January 1, 2022.

Heng speculated that the actual Cambodia-Thai trade volumes should be considerably higher than the reported figures, reasoning that not all goods exchanged at every border crossing make it into official tallies.

Cambodia is a big buyer of Thai construction materials, electronics and electric equipment, machinery, vehicles, fuel, fertilisers, cosmetics, and food and beverage products, he said, adding that it mainly exports agricultural items to Thailand.

Hong Vanak, director of International Economics at the Royal Academy of Cambodia, echoed Heng’s sentiment that the two countries’ proximity and good political relations underpin their steadily rising trade.

However, he suggested that Cambodia’s trade deficit with Thailand was “inevitable”, given that both countries produce similar commodities, although the latter is larger by land area – around 2.89 times as much – and has a much larger production capacity overall.

To help remedy the imbalance, Cambodia should seek to draw in additional foreign direct investment (FDI) inflows towards ensuring that the Kingdom can meet domestic demand, he opined.

“This imbalance will persist for quite a while, but we can temper it to some extent by striving to process more products locally and attracting investors. In addition, it is necessary to convince and encourage people to use more local goods.

“[However,] I’m not optimistic that the Cambodian-Thai trade balance will ever even out, no matter how many years go by,” he said.

In 2021, the merchandise trade between the two countries totalled $4.084 billion, up 8.57 per cent versus the previous year, according to the GDCE. Cambodian exports to Thailand shrunk by 30.81 per cent to $620.214 million, whereas imports grew by 20.89 per cent to $3.463 billion.

Cambodia’s trade deficit with Thailand expanded by 44.43 per cent last year, reaching $2.843 billion.