The US continued to be Cambodia’s biggest trading partner abroad, accounting for 19.55% which contained $46.83 billion in international commerce in 2023. Hong Menea
The US and Cambodia’s commercial relations have changed dramatically in recent years, bringing possibilities and problems for the Southeast Asian country’s economic development.
The US, one of the major actors in the world economy, has a big power in how trade laws are formulated and how international cooperation is promoted. Improving commercial links with the US creates chances for Cambodia to grow its market share, attract foreign investment, and advance sustainable economic growth.
There is now a lot of room for improvement in the trade relations between the US and Cambodia. Over time, there has been a consistent increase in trade between these two countries, which benefits both parties by exchanging commodities and services.
The US continued to be Cambodia’s biggest trading partner abroad, accounting for 19.55% which contained $46.83 billion in international commerce in 2023.
The value of bilateral commerce between China and Cambodia from January to November 2023 was $13.42 billion. In 2023, Cambodia’s trade value with the EU was 4.61 billion US dollars, a decrease of 4.9 percent from 4.85 billion dollars the previous year.
Even though Cambodia and China get along well, the US and EU have the greatest trading relations, which indicates how crucial both the US and EU are to Cambodia’s economy. As such, it is imperative that the government of Cambodia fortify its positive ties with the US and other EU members.
Prior to the Joe Biden administration, Cambodia was granted duty-free access to the US market through the Generalised System of Preferences (GSP) program. This policy has played a significant role in increasing Cambodian exports to the US. The US is a major market for Cambodian exports of clothing, footwear, and agricultural goods.
However, the US imports a wide range of goods from Cambodia, which helps both nations’ economies flourish. To further improve commercial relations, it is necessary to address concerns about worker rights and international standard compliance, among other issues.
The US and Cambodian trade relations have been growing over time, opening up new avenues for cooperation and investment. Cambodia is a desirable location for US companies looking to expand their operations due to its affordable labour costs, welcoming investment laws, and developing infrastructure.
Access to a sizable and dynamic market is made possible by Cambodia’s participation in regional trade accords like the ASEAN Economic Community and the Regional Comprehensive Economic Partnership. By utilising these alliances and building on its advantages, Cambodia can improve trade ties with the US and open up new opportunities for development and economic expansion.
It is crucial to discuss the major issues and roadblocks that have impeded the expansion and development of commercial relations between Cambodia and the US when analysing these ties. The question of labour standards and human rights practices compliance is one of the main difficulties encountered.
The garment industry in Cambodia is a major source of the nation’s exports to the US, and the US has expressed concerns about violations of labour rights and the lack of progress in improving working conditions in this sector.
Additionally, these worries led to a partial revocation of Cambodia’s preferential trade access under the Generalised System of Preferences (GSP) program, which hurt the country’s exporters’ ability to compete in the US market.
Furthermore, concerns including safeguarding intellectual property rights, erecting regulatory obstacles, and market access restrictions have also posed challenges for bilateral trade between the two countries.
The potential for growth and sustainability in trade ties has been hampered by Cambodia’s export product lack of diversification and dependence on a small number of important industries for trade with the US. To address these issues and create a more favourable trading environment between Cambodia and the US, both governments must work together to increase transparency, raise labour standards, and encourage economic diversity.
Cambodia has a number of options for implementing programs and tactics to improve commercial relations with the US. Focusing on improving market access through trade agreements that lower tariffs and trade barriers is one practical strategy. Businesses in both nations can gain from expanded market prospects and expedited trade procedures by cultivating a favourable trade climate.
Improving trade relations between Cambodia and the US requires the involvement of both the public and private sectors. Through the implementation of trade facilitation laws, the removal of trade barriers, and the provision of assistance and incentives for firms wishing to engage in international commerce, the government plays a major role in fostering a favourable climate for trade.
Conversely, the private sector actively seeks out opportunities, makes contacts, and cultivates relationships with possible partners in the US market, all of which contribute to the growth of trade partnerships. Businesses in the private sector can use their networks, resources, and experience to find commercial possibilities, customer preferences, and market trends that can result in fruitful trade alliances.
Advancing efforts that support economic development and trade growth will require cooperation between government agencies, industry players, and foreign partners. Cambodia may establish a lucrative and long-lasting trading relationship with the US that is advantageous to both nations by cooperating towards a shared objective.
In conclusion, strategic planning, ongoing innovation, and solid alliances are the keys for Cambodia to realise its trading potential with the US.
Both Cambodia and the US should just focus on the points that both countries are able to work together in order to show joint outcomes and then other important cooperation will implement gradually. Through proactive measures and the embracement of growth and collaborative prospects, Cambodia can enhance its global market share and attain greater economic prosperity.
Seun Sam is a policy analyst at the Royal Academy of Cambodia.
The views expressed are his own.
