Trade with South Korea plunges 19%
Trade with South Korea plunges 19%
Bilateral trade between Cambodia and South Korea in the first nine months of 2021 was worth $720.52 million, down by 18.6 per cent from $885.32 million in the same period in 2020, as the recently signed Cambodia-Korea Free Trade Agreement (CKFTA) raises fresh hopes for an uptick in trade between the two countries.
In the January-September period, the Kingdom exported $259.08 million, dipping by 18.55 per cent year-on-year, and imported $461.43 million, falling by 18.64 per cent, data from the Korea International Trade Association (Kita) show.
The CKFTA was signed on October 26 by Minister of Commerce Pan Sorasak and his South Korean counterpart Yeo Han-koo. The agreement is expected to boost exports and employment opportunities, and increase the gross domestic product (GDP) and aid a quick recovery as the two economies emerge from the Covid-19 crisis.
Through the deal, Cambodia hopes to ship more merchandise to the Korean market, especially garments, footwear, bags and other textile-based products; electronics and spare parts; rubber and agricultural products.
Cambodia Chamber of Commerce vice-president Lim Heng told The Post on October 31 that domestic productions chains would face lingering Covid-induced problems throughout this year, and that Korean imports would remain contained.
Acknowledging that Cambodian exports often fall short of consumer demand, Heng believes that the CKFTA will make up a fair amount of that deficit.
“The bilateral trade agreement will not only help attract Korean companies to invest in Cambodia, but some foreign companies that produce for export to the Korean market may open factories as well,” he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, underlined that the Covid-19 crisis had slowed down some production chains and reduced demand for some products as people’s incomes fell.
By the same vein, Korean investment in Cambodian production for export to the East Asian country remains limited, he said.
Although he expects the CKFTA to buoy trade between the two countries, Vanak called on Cambodia to woo more Korean investors and explore how to produce goods that will command high demand in South Korea, noting that consumers there are exposed to a wide range of products.
Cambodia mainly exported garments, footwear, travel products, beverages, spare parts, electronics, rubber, pharmaceutical and agricultural products, and imported vehicles, electronics, kitchen appliances, beverages, pharmaceuticals and plastics, Kita reported.
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 on October 26 citing the South Korean trade ministry.
And according to Ministry of Commerce spokesman Pen Sovicheat, the trade deal would provide more than 10,000 Cambodian goods duty-free access to South Korea.
Kita figures show that Cambodia-South Korea trade amounted to $884.88 million in 2020, from $1.032 billion in 2019.
Cambodia exported more than $317 million of goods to the South Korean market in 2020, down by 5.4 per cent year-on-year, and imported over $567 million, plunging by 18.6 per cent over 2019.
