Logo of Phnom Penh Post newspaper Phnom Penh Post - Kingdom, South Korea plan for post-FTA era

Kingdom, South Korea plan for post-FTA era

Content image - Phnom Penh Post
Prime Minister Hun Sen met with South Korean President Moon Jae-in on February 11, at the 2022 World Summit for Peace on the Korean Peninsula in Seoul. SPM

Kingdom, South Korea plan for post-FTA era

South Korea has pledged to expand economic and trade cooperation with Cambodia after a free trade agreement (FTA) signed by the two countries last year enters effect in the near future, Prime Minister Hun Sen affirmed in a statement at the weekend.

The premier met South Korean President Moon Jae-in on February 11, at the 2022 World Summit for Peace on the Korean Peninsula in Seoul.

At the meeting, Moon remarked that Cambodia is a key priority for South Korea, especially as the FTA nears implementation, and said the agreement was “being sent to Parliament” for ratification after “completion of the procedures”, according to the statement.

The president voiced satisfaction over the exceptional level of bilateral cooperation, and said Seoul would stick to the policy of encouraging Korean investors to enter the Cambodian market, using the new Law on Investment as a major enticement.

Moon also noted that there are 300 South Korean companies investing and doing business in Cambodia.

Hun Sen asked Moon for Seoul’s continued support for Cambodian industry, especially in the processing segment, suggesting a “plus one” business model, in which Korean companies could expand supply chain networks developed in Thailand or Vietnam to Cambodia.

In expectation of a considerable jump in Korean investment into Cambodia driven by the Kingdom’s new investment law, the premier suggested forging special cooperative partnerships in the fields of food processing and agro-industry for export to the East Asian nation.

Ministry of Commerce spokesman Pen Sovicheat told The Post early this month that the FTA would come into force 60 days after both countries deposit their instrument of ratification – which he called a “notification letter” – a document by which a country formally agrees to be bound by a treaty. He voiced confidence that the deal would enter into effect no later than June 30.

Cambodia Chamber of Commerce vice-president Lim Heng told The Post that the private sector is looking forward to the FTA, which he said is “more favourable” than a similar pact that the Kingdom struck with China – especially the tariff concessions on agricultural products.

"The agreement with Korea is more liberal than China's because tariffs on agricultural products are almost zero, whereas China’s still has some agricultural products taxed, such as rubber. On the other hand, the commerce ministry says it will pursue further negotiations with China," he said.

The bill authorising the ratification of the FTA was enacted into law by a Royal Code signed by the King on January 29.

Sovicheat previously reported that the agreement would grant more than 10,000 Cambodian goods duty-free access to South Korea.

Under the deal, coupled with the Regional Comprehensive Economic Partnership (RCEP), the Kingdom will lift tariffs on 93.8 per cent of goods traded, with South Korea scrapping duties on 95.6 per cent, Yonhap News Agency reported in October citing the South Korean trade ministry.

The two deals are expected to deliver significant gains to bilateral trade flows between Cambodia and South Korea, which grew 9.015 per cent last year to $965.132 million, from $885.322 million in 2020, according to data from the Korea International Trade Association (Kita).

In 2021, Cambodian exports to South Korea amounted to $341.503 million, up by 7.353 per cent year-on-year from $318.112 million, while imports clocked in at $623.628 million, rising by 9.947 per cent from $567.210 million in 2020.

Cambodia’s trade deficit with South Korea widened by 13.258 per cent from $249.099 million in 2020 to $282.125 million last year.

In December alone, bilateral trade was to the tune of $95.395 million, a 10.966 per cent uptick from $85.968 million in December 2020. Of that, Cambodia’s exports amounted to $32.439 million, rising by 23.916 per cent from $26.179 million, and imports clocked in at $62.955 million, up by 5.295 per cent from $59.789 million.

MOST VIEWED

  • South Korea’s first lady brings hope to ill boy

    South Korea’s first lady Kim Keon-hee – wife of current president of the Republic of Korea, Yoon Suk Yeol – met with a 14-year-boy with congenital heart disease during her trip to the Kingdom for the ASEAN Summit. After their meeting it was announced that the

  • Hun Sen gets Covid, shuns G20, APEC summits

    Prime Minister Hun Sen said he has tested positive for Covid-19 in Indonesia, where he is slated to attend the G20 summit in his capacity of the ASEAN chair. In a social media post addressing the Cambodian public, he said: “Before leaving Cambodia, I always

  • Moody’s sets outlook rating to ‘negative’ for Cambodia

    US global rating agency Moody’s Investors Service Inc on November 15 announced that it downgraded Cambodia’s outlook from “stable” to “negative” and maintained its B2 local and foreign currency issuer ratings. “The negative outlook reflects a deteriorating external position as illustrated by the severe

  • Hun Sen’s Covid infection caused by ‘weakened antibody’ after summit

    Prime Minister Hun Sen said exhaustion from heavy workload before and during the recent ASEAN Summit may have led to him contracting Covid-19 due to his weakened immune system, while rejecting speculations that the infection was caused by leaders of some countries who did not

  • Korean first lady paves way for ill boy’s surgery

    A 14-year-old boy with congenital heart disease who was lucky enough to meet with South Korean first lady Kim Keon-hee may get the chance of a lifetime and receive surgery and treatment at Asan Medical Center in Seoul, South Korea. After seeing his plight, many

  • Kingdom’s rice crowned world’s No1

    Cambodia’s Phka Rumduol jasmine variety has been crowned the World’s Best Rice for the fifth time at the TRT (The Rice Trader) World Rice Conference in Phuket, Thailand on November 17, according to leaders of the Kingdom’s apex rice industry body. Phka Rumduol