Nearly two years have passed since the Cambodia-China Free Trade Agreement (CCFTA) came into effect in early January 2022. This period has witnessed significant growth in bilateral trade, as well as a surge in Chinese investment in Cambodia.
The CCFTA was signed by then-Minister of Commerce Pan Sorasak and his Chinese counterpart, Zhong Shan, on October 12, 2020. The signing was observed via video link by former Prime Minister Hun Sen and Chinese Foreign Minister Wang Yi.
Under the terms of the CCFTA, 98 per cent of Cambodia’s exports to China and 90 per cent of China’s exports to Cambodia are exempt from tariffs. The agreement was implemented on January 1, 2022.
Ministry of Commerce spokesperson Penn Sovicheat told The Post about the various trade agreements with China which Cambodia is a signatory to.
“We have the CCFTA with China. Being an ASEAN member, the Kingdom is also a signatory to the ASEAN-China Free Trade Agreement (ACFTA). Moreover, we’re part of the Regional Comprehensive Partnership Agreement (RCEP), which is a multilateral free trade agreement,” he said.
He noted that exporters currently use the frameworks of these three agreements for access to the Chinese market. Among them, the RCEP is the most favoured. Both the ACFTA and the RCEP offer numerous duty-free pathways, while the CCFTA introduces several additional tariff exemptions.
“We anticipate that for products not covered by the ACFTA or the RCEP, exporters will utilise the CCFTA. There’s a consistent rise in exports in both product categories and trade volume,” he said.
“For milled rice exports, Cambodia has a 400,000-tonne quota, which may increase next year. Exports of other agricultural products, like cassava, mango, banana and Pailin longan, have also grown in volume and
value under the RCEP. We have also been exporting a significant quantity of aquaculture products to China, with the export of up to 12 types of fishery products recently permitted,” he added.
“We hope to maximise the benefits of both the CCFTA and the ACFTA, using them complementarily. If certain products don’t receive zero tariffs under one agreement, the other might offer relief. I expect China to remain a crucial trade ally for Cambodia, not just under the Belt and Road Initiative (BRI) but also via the synergies of the above three agreements,” Sovicheat continued.
Anthony Galliano, group CEO of Cambodian Investment Management Co Ltd, shared his insights about Cambodia’s trade relations.
“China is Cambodia’s largest trading partner, with trade volume projected to hit $12 billion,” he told The Post.
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Author: May Kunmakara
Publication date: 09 Oct 2023
Source: The Phnom Penh Post