The Cambodia-Korea Free Trade Agreement (CKFTA) will facilitate the import of South Korean electronics, pharmaceuticals and auto parts, as well as raw materials, machinery and other equipment needed for industry in Cambodia, a commerce ministry spokesman says. LG ELECTRONICS
Bilateral trade between Cambodia and South Korea in the first 10 months of 2021 was worth $791.59 million, down by 10.6 per cent from $885.32 million in the same period in 2020, as the prolonged Covid-19 community transmission continues to take its toll.
In January-October, the Kingdom exported $283.08 million, shrinking by 11 per cent year-on-year from $318.11 million, and imported $508.51 million, down from $567.21 in the year-ago period, data from the Korea International Trade Association (Kita) show.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on November 16 that the spread of Covid-19 was the main culprit behind the drop in trade between the two countries, which has led to reductions in household incomes, economic growth and demand for products in all sectors.
He also noted that the two countries’ portfolios of products are similar, which he said requires the Kingdom to further diversify production to expand its export markets.
“Obstacles to travel and transportation caused by the effects of the Covid-19 outbreak have led to a decline in orders between Cambodia and Korea,” Vanak said.
On the other hand, he pointed out that trade has steadily begun to pick up over the last month, and said that pace would book a sharp leap in momentum when the Cambodia-Korea Free Trade Agreement (CKFTA) signed late last month enters into force.
For reference, Kita previously reported that Cambodia-South Korea trade had dropped 18.6 per cent year-on-year in the first nine months of this year, around eight percentage points more than in January-October.
The CKFTA was signed on October 26, in the expectation that the deal would boost exports and employment opportunities, increase the gross domestic product (GDP) and aid a quick recovery as the two economies emerge from the Covid-19 crisis.
Vanak said: “Cambodia’s decision to reopen to fully-jabbed travellers from November 15 will also contribute to the growth of Cambodia-Korea trade to another echelon, before booming when the bilateral free trade agreement comes into force.”
Ministry spokesman Pen Sovicheat told The Post in September that the CKFTA would provide more than 10,000 Cambodian goods duty-free access to South Korea.
He 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; electronic components; and light industrial products.
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 added.
Kita figures show that Cambodia-South Korea trade amounted to $884.88 million in 2020, from $1.032 billion in 2019.
Cambodia exported more than $317 million of goods to the South Korean market in 2020, down by 5.4 per cent year-on-year, and imported over $567 million, plunging by 18.6 per cent versus 2019.
