Bilateral trade between Cambodia and South Korea reached $869.735 million in the first 11 months of 2021, an 8.805 per cent surge from $799.354 million in the same period last year, according to data from the Korea International Trade Association (Kita) posted at the weekend.
From January-November, Cambodian exports to South Korea amounted to $309.074 million, up by 5.872 per cent year-on-year from $291.933 million, while imports clocked in at $560.661 million, soaring by 10.492 per cent from $507.421 million in the same period last year.
Cambodia’s trade deficit with South Korea widened by 16.752 per cent from $215.488 million to $251.587 million.
Last month alone, bilateral trade was to the tune of $78.419 million, a 4.254 per cent uptick from $75.218 million in November 2020. Of that, Cambodia’s exports amounted to $26.077 million, rising by 5.205 per cent, and imports clocked in at $52.341 million, up by 3.787 per cent.
The Kingdom’s trade deficit expanded by 2.418 per cent from $25.644 million in November 2020 to $26.264 million last month.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on December 20 that trade between the two countries has steadily increased,
even as the Covid-19 crisis prompted countries around the world to tighten their borders.
That number will increase further when the bilateral Cambodia-Korea Free Trade Agreement (CKFTA) between the two countries enters into force soon, he predicted.
“Even with Covid-19 variant Omicron now threatening the global economy, I am still optimistic that trade between the two countries will continue to grow.
“In addition, the free trade agreement [FTA] signed by the two countries will also help attract more Korean investors to Cambodia,” he said.
He added that Cambodia has a pool of skilled human capital that seees marked growth every year.
On the other hand, Vanak suggested that Cambodia’s trade deficit with South Korea would require the Kingdom to make more efforts to produce and process new products for export to the Korean market, ranging from agricultural to industrial products.
Cambodia Chamber of Commerce vice-president Lim Heng shared Vanak’s optimism that the FTA would build up a considerable head of steam for Cambodian exports to the East Asian country, providing duty-free access or partial tariff reductions to a broad spectrum of merchandise.
Highlighting South Korea’s export potential for Cambodian goods, Heng said: “Cambodia must make more efforts to diversify its production to meet the needs of the Korean market.”
Prime Minister Hun Sen told a December 16 Cabinet meeting that Cambodia would benefit a lot from the CKFTA, especially in terms of trade and investment flows from South Korea.
“We need the FTA to materialise soon, as we’ll be able to further open the South Korean market – meaning that we’ll have more export destinations, and not have to rely on a single one,” he said, noting that a similar deal with China will also take effect soon.
According to the Ministry of Commerce, the CKFTA will provide duty-free access for more than 10,000 Cambodian items to the South Korean market.
Under the CKFTA, 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 late October citing the South Korean trade ministry.