Minister of Commerce Pan Sorasak plans to lead a delegation to South Korea next month to sign the Cambodia-Korea Free Trade Agreement (CKFTA), if the Covid-19 situation permits, according to a senior official.
Many observers share the opinion that the East Asian economy will outstrip most rivals as buyers of Cambodian merchandise once the agreement comes into force, with China cited as a notable exception.
The minister and his South Korean counterpart on February 3 signed the agreed minutes on the conclusion of negotiations over the free trade agreement (FTA), which is widely expected to be signed this year.
Ministry spokesman Pen Sovicheat told The Post on September 20 that the FTA would provide more than 10,000 Cambodian goods duty-free access to South Korea, saying that a virtual signing ceremony was not out of the question.
“Like the Cambodia-China Free Trade Agreement, the CKFTA is another success story of efforts made by the Ministry of Commerce to open up markets for the export of Cambodian goods,” he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, previously told The Post that the two countries have cultivated strong trade relations, which will become all the more “special” when the FTA enters into force.
Even so, he encouraged the Kingdom to incorporate more commercially viable commodities into its export portfolio, to make the most out of its trade arrangements with trading partners.
“The diversification of products for export to foreign markets will better position Cambodia to excel in international trade.”
The ministry’s Sovicheat said the FTA will create a pipeline of opportunities for agricultural and agro-industrial goods; finished textile-based products such as garments, footwear and travel bags; rubber; spare parts and electronic components; light industrial products; and a host of other goods churned out by domestic producers in and out of special economic zones (SEZ).
The trade deal will also facilitate the import of electronics, pharmaceuticals and auto parts, as well as raw materials, machinery and other equipment needed for industry, which will trigger a rise in productivity and bring improvements in the quality of export products, he said.
Bilateral trade between Cambodia and South Korea in the first half of this year was worth more than $451.98 million, surging by 6.72 per cent from $423.51 million in the same period in 2020, according to data from the Korea International Trade Association (Kita).
In the January-June period, the Kingdom exported $159.40 million, down by 1.6 per cent year-on-year from $162.06 million, and imported $292.59 million, up by 11.9 per cent from $261.45 million a year earlier. This means that the trade deficit widened by 34.0 per cent from $99.4 million to $133.2 million.