Bilateral trade with South Korea up more than 31% in January
Bilateral trade with South Korea up more than 31% in January
Bilateral trade between Cambodia and South Korea reached $111.324 million in the first month of 2022, a 31.026 per cent surge from $84.963 million in January 2021, according to data from the Korea International Trade Association (KITA). This also marked a 16.384 per cent rise from $95.652 million in December 2021.
In January 2022, Cambodian exports to South Korea amounted to $33.024 million, up by 0.993 per cent year-on-year from $32.699 million and 1.802 per cent month-on-month from $32.439 million.
Meanwhile, imports clocked in at $78.300 million, rising by 49.816 per cent year-on-year from $52.264 million and 23.867 per cent month-on-month from $63.213 million.
Cambodia’s trade deficit with South Korea stood at $45.276 million in January, widening by 131.414 per cent year-on-year from $19.565 million and 47.127 per cent month-on-month from $30.773 million.
In general, Cambodia’s major exports to South Korea comprise garments, footwear, travel products, beverages, spare parts, electronics, rubber, pharmaceutical and agricultural products, while key imports include automobiles, electronics, kitchen appliances, beverages, pharmaceutical and plastics, according to the Ministry of Commerce.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, told The Post on February 28 that although the Kingdom’s exports to South Korea in January were less than half the value of imports – or 42.176 per cent – the uptrend in bilateral trade in spite of the Covid-19 crisis substantiates the two countries’ strong position as trading partners.
On the other hand, he said, the items that Cambodia imports from South Korea are used in the production of goods for export to international markets.
“Bearing in mind that Cambodia is a developing country, the need for it to import some products from abroad to support its production chain is certainly high,” he said.
Even so, Vanak believes that Cambodian exports to South Korea will get a significant lift when the bilateral free trade agreement (FTA) signed between the two countries enters into force.
Signed on October 26, 2021, the trade deal will provide duty-free access to more than 10,000 Cambodian goods to the South Korean market, according to the commerce ministry.
Under the deal, 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 previously reported, citing the South Korean trade ministry.
Vanak went on to say that the FTA “will help attract more investors to invest in Cambodia to produce and process for export to the Korean market”.
Although acknowledging that the deal would accelerate trade flows in goods between the two countries, Vanak suggested that the trade balance could be tilted in Cambodia’s favour, should the Kingdom adjust its production capacity to more optimally meet the demands of the Korean market.
He put forward agricultural products as a prime opportunity for export to South Korea.
The Kingdom attracted a total of $39 billion of new inward foreign direct investment (FDI) in the first half of 2021, with South Korea ranking as the second largest source of registered FDI with a 10.6 per cent share, or $4.1 billion, behind only China ($17.3 billion), according to data from the National Bank of Cambodia (NBC).
In 2021, bilateral trade between Cambodia and South Korea reached $965.132 million last year, a 9.015 per cent surge from $885.322 million in 2020, according to data from KITA.
