FTA to exempt 340 items from tariffs
FTA to exempt 340 items from tariffs
When the Cambodia-China Bilateral Free Trade Agreement (FTA) comes into effect, at least 340 of the Kingdom’s commodities will be exempt from tariffs, Ministry of Commerce secretary of state Sok Sopheak said on Tuesday.
The agreement is scheduled to be signed next month.
Sopheak, who is also the head of the FTA negotiation group with China, was speaking at a press conference on the results of the FTA talks at the Council of Ministers.
Exempt items include pepper, dried chilli, cashew nut-products, garlic, honey and seafood products such as mussels, crabs and snails, he said. “We have sufficient means to produce goods for export to China, especially vegetables, fruits, fish and meats.”
During the additional negotiations leading up to ratification of the agreement, he said, the Kingdom will push to include milled-rice, natural rubber and sugar in the list of goods exempt from tariffs.
He noted that exports in excess of China’s quota limit are currently charged a tariff.
The FTA, he said, would eliminate tariffs on 98 per cent of Cambodia’s total exports and 90 per cent of China’s shipments into the Kingdom.
He said both sides agreed to encourage Chinese and other international investors to set up factories in the Kingdom to export to China and other destinations. Of note was the interest in commercial livestock farming investments.
At the same time, he said, the Kingdom is eyeing more imports of processed industrial supplies such as auto parts and steel.
“According to an assessment and analysis of the size of the market opened [by the agreement], Cambodia will increase its exports to China by 25 per cent per annum, or even higher in the event a more favourable policy of production, investment, transport, fiscal and trade facilitation can be arranged,” Sopheak said.
Royal Academy of Cambodia economics researcher Ky Sereyvath said the FTA will create a new pole for the Kingdom – not only for trade, but also for investment flows.
He said: “The FTA will help Cambodia diversify exports beyond garments to other industrial products.
“The agreement will not only attract investment from China but also from other countries.”
Chan Sopheap, deputy director-general of the Ministry of Economy and Finance’s General Department of Policy, told the press conference that the FTA will expand the market for the Kingdom’s commodities beyond the gains provided by the creation of the ASEAN-China Free Trade Area (ACFTA) on January 1, 2010.
He noted that the agreement eliminated tariffs on 94.7 per cent of Cambodia’s total exports to the area, which is less than the FTA is expected to deliver.
“Under the Cambodia-China Free Trade Agreement, we have secured the entry for more than 340 items to the Chinese market, most of which are agricultural products and processed finished products from Cambodia’s industrial sector,” Sopheap said.
Bilateral trade between Cambodia and China was worth $9.42 billion last year, up 27.29 per cent from $7.4 billion in 2018, data from the Chinese embassy in Phnom Penh showed.
