Ministry works on plan to win in trade
Ministry works on plan to win in trade
Ministry of Commerce officials are combing over a list of nine products, commodities, services and incentives to develop a trade strategy that maximises the benefits of the newly-inked free trade agreement (FTA) with China.
According to the ministry, the officials are focusing on garments and footwear as finished products along with fisheries, milled rice, cassava and natural rubber as commodities.
Also on the list are light manufacturing installation and food processing as services, as well as increased use of special economic zones as a means to encourage Chinese investment in Cambodia.
Speaking at a meeting held at the ministry on December 25, secretary of state Seang Thay said his ministry is studying data it has collected to prepare a game plan that best utilises the FTA with China.
He said: “This current research centres on maximising the export of Cambodian goods to China while fully understanding the conditions required for entry into the Chinese market.”
Cambodia and China signed the bilateral FTA on October 12 following three rounds of negotiations held between January and July. The deal introduces zero tariffs on some goods moving between the two countries.
Not limited to Cambodian-Chinese exchange, Thay said the study also seeks to examine trade relations in the larger context of the global economy, including the Kingdom’s total exports and specifically to the markets of its other major trading partners.
He said the working team is analysing the strengths, weaknesses, opportunities and threats (SWOT) of Cambodian products to categorise them by the phase of their life cycles in each market – “introduction”, “growth”, “maturity” or “decline” – and better understand how to promote them and take advantage of current market conditions.
According to the ministry, the team is also looking into tariff regimes (import customs duties) that exert a strong influence on the economies of the Kingdom and the world.
Examples of the tariff systems include the World Trade Organisation’s (WTO) Most Favoured Nation (MFN) principle, the ASEAN-China Free Trade Agreement (ACFTA), China’s preferential tariffs for Cambodia, as well as the trade implications of the Kingdom’s status as a Least Developed Country (LDC).
The research aims to shed light on how to make the most of Cambodia’s exports and potential technical challenges that may serve as obstacles to the Kingdom exporting a certain product to a given market.
Cambodia Chamber of Commerce vice-president Lim Heng could not be reached for comment on December 27, but he previously told The Post that when the FTA with China enters into force, goods exported from the Kingdom to the Asian economic powerhouse are expected to grow in volume considerably, especially agricultural products.
But to profit from the opportunity for export growth, he cautioned the Kingdom’s investors and producers to ensure that their products are consistently high quality.
He also called on them to strictly adhere to regulatory standards and guidelines such as hygiene, and to be aware of the requirements for each target country.
“I believe that our exports will continue to show strong overall growth as the implementation of the bilateral free trade agreement between Cambodia and China next year contributes to further national economic development,” Heng said.
In the first nine months of this year, Cambodia’s exports totalled $14.1 billion, up 20.07 per cent from the same period last year, according to data from the Ministry of Economy and Finance.
The import of goods from abroad to Cambodia was valued at $13.6 billion during the period, down 8.7 per cent from the first nine months of last year.
