Signing of Korea trade deal postponed
Signing of Korea trade deal postponed
The formal signing of the Cambodia-South Korea Free Trade Agreement (CKFTA), scheduled for mid-year, will be postponed due to disruptions from the Covid-19 outbreak stemming from the February 20 community incident, according to a spokesman for the Ministry of Commerce.
Minister of Commerce Pan Sorasak and his South Korean counterpart Yoo Myung-hee signed the agreed minutes on the conclusion of negotiations over the deal via video link on February 3, with both sides scheduling an official signing ceremony in June.
Ministry spokesman Seang Thay told The Post on April 26 that negotiations on the terms of the CKFTA were completed in February.
At the time, the two sides expected a formal agreement to be signed in the middle of this year, when Cambodia is due to host the 13th Asia-Europe Meeting (ASEM13), he said. The Korean leader will come to Cambodia to witness the official signing.
"Currently, Cambodia is facing the February 20 community incident, so plans to formally sign a Cambodia-Korea trade agreement will not be as expected," he said.
He added that when the agreement enters into force, it will provide many benefits for Cambodia's economic growth, as Cambodian products will have a wider market.
Goods exports from Cambodia to Korea will grow particularly strongly, because the Kingdom will receive more and newer concessions through the deal, Thay said.
At the same time, tariffs on imports to Korea will also be reduced. "This is also an opportunity to attract foreign investment into Cambodia to produce and export to Korea," he said.
ASEM13 will be postponed for the second time, from June to end-2021, according to a press release issued by the Ministry of Foreign Affairs and International Cooperation on March 4.
Cambodia Chamber of Commerce vice-president Lim Heng said that the CKFTA would have a positive impact on Cambodia's trade balance because Korea is a country with a growing economy and high demand for products from Cambodia. This agreement will be a magnet to attract more Korean investors to invest in Cambodia.
"The Cambodia-Korea Free Trade Agreement will increase the export of Cambodian goods to Korea, as there will be some tax exemptions, especially for agricultural products," he said.
According to Heng, Cambodia's exports to Korea include garments and textiles, footwear, bags, spare parts, components for electronic equipment, rubber and agricultural products. South Korean exports to Cambodia including vehicles, electronics, electrical appliances, beverages, pharmaceuticals and plastic products.
In 2020, Korea was the eighth largest export market for Cambodian goods, after the US, Japan, China, the UK, Canada, Thailand and Vietnam.
Cambodia exported $99.07 million worth of goods to the Korean market in the first quarter of 2021, up from $93.85 million, or 5.6 per cent compared to the same period in 2020, according to data from the Korea International Trade Association.
Meanwhile, imports from Korea fell 0.6 per cent from $147.84 million to $146.94 million. In 2020, the total trade volume between the two countries was worth $884.88 million, down 17.77 per cent from $1.032 billion in 2019.
