Cambodian exports to Canada soar as Kingdom weighs free trade deal
Cambodian exports to Canada soar as Kingdom weighs free trade deal
Cambodia's January-August exports to and trade surplus with Canada both rose by around one-quarter on-year, a pattern that is expected to continue, driven by preferential commercial arrangements and initiatives spearheaded by the representative offices of the apex Cambodian trade body, as the Kingdom pushes for a lucrative free trade pact with the world’s ninth largest economy.
In the first eight months of 2022, bilateral trade between Cambodia and Canada came to $804.406 million, up 22.61 per cent year-on-year, with the Kingdom’s exports worth $780.188 million, up 24.03 per cent, and imports totalling $24.217 million, down 10.4 per cent, according to the General Department of Customs and Excise of Cambodia (GDCE).
The Kingdom’s trade surplus with Canada for the period expanded by 25.58 per cent on a yearly basis, from $602.001 million to $755.971 million. As the fifth biggest buyer of Cambodian goods over the first eight months of the year – after the US, Vietnam, China and Japan – Canada accounted for a 4.99 per cent share.
Speaking to The Post on October 3, Cambodia Chamber of Commerce (CCC) vice-president Lim Heng commented that, prior to Covid-19, the Kingdom’s exports to Canada had been on a years-long upward trajectory.
Heng ascribed this year’s export growth momentum on the Canadian market, and its expected continuation for the foreseeable future, to improved diplomatic relations between the two countries, benefits for certain Cambodian goods under Canada’s General Preferential Tariff (GPT) regime, and the existing and subsequent CCC representative offices on Canadian soil.
With Canadian Prime Minister Justin Trudeau reportedly planning to attend the ASEAN Summit in Cambodia next month, Heng anticipates a number of key talks aimed at promoting bilateral trade cooperation between the two countries.
He shared that Cambodian-made goods exported to the Canadian market mainly comprise garments, footwear and travel goods, bicycles, electrical equipment and electronic components, and agricultural products, while imports from Canada include cars, construction materials, and modern technological equipment.
On May 27, the CCC opened a representative office in Toronto, Canada – its first-ever international outpost – to serve as a central information hub to encourage foreign investment and stimulate trade between the two countries, and provide a direct channel for importers across the world to order Cambodian-made goods. The Kingdom’s apex trade body is also planning a second office in Montreal, also in eastern Canada.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, argued that the upswing in exports evinces that the Kingdom’s products meet the quality needs of the Canadian market.
“The goods that Canada buys from Cambodia are similar to those that the US does. Hence, in order to effectively preserve the aforementioned market, Cambodia must strive to improve the quality of its products even further. Export diversification must also be considered,” he said.
During a meeting with Canadian ambassador Sarah Taylor in February, Minister of Commerce Pan Sorasak asked Ottawa to explore the possibility of establishing a bilateral free trade agreement (FTA) with the Kingdom and arranging business meetings between investors of the two countries.
He also called on Canadian investors to take advantage of the potential opportunities offered by Cambodia’s FTAs with China and South Korea, as well as the Kingdom’s membership in the Regional Comprehensive Economic Partnership (RCEP).
He also made the case that Cambodia has seen some substantial reforms that ensure a conducive business environment, with the new Law on Investment as a predominant highlight.
In 2021, trade between the two countries totalled $994.716 million, expanding by 23.27 per cent year-on-year, with Cambodian exports worth $954.828 million, up 27.07 per cent, and imports $39.888 million, down 28.16 per cent, according to the GDCE.
The Kingdom’s trade surplus with Canada expanded by 31.48 per cent to $914.940 million in 2021, from $695.884 million a year earlier.
