Cambodia’s Commerce Minister Pan Sorasak told British Ambassador Bill Longhurst he would like to see the two countries enter into a free trade agreement (FTA) as soon as possible following Britain’s decision to leave the European Union (EU).
“The purpose of Commerce Minister Pan Sorasak’s meeting with British Ambassador to Cambodia Bill Longhurst was solely to talk about the FTA. Since Cambodia does not have an FTA yet with Britain, the minister wanted to push for one as soon as possible,” Soeng Sophary, spokesperson of the Ministry of Commerce, told Khmer Times yesterday.
Ms. Sophary, quoting Mr. Sorasak, said the FTA between Cambodia and Britain would strengthen bilateral trade and economic ties following Britain’s June 23 vote to leave the EU.
She said that Britain will respond to Cambodia by the end of the year or early next year since it is in the stage of transformation after it leaves the EU.
“The ambassador told the minister that Cambodia should wait until the end of this year to get a confirmation on whether Cambodia needed to sign the FTA with Britain or whether the current tariff-free agreement with the EU under the ‘Everything but Arms’ agreement will be sufficient,” said Ms. Sophary.
The EU is one of Cambodia’s largest trading partners after the United States and more than 40 percent of the country’s exports head to Europe. Cambodia’s EU exports are given preferential treatment under the “Everything but Arms” initiative for least developed countries.
Britain has yet to evoke Article 20 of the EU treaties to formally leave the European Union and observers point out it could take at least two years.
The British embassy in an email response to Khmer Times said while the country is still a member of the EU, it will continue to trade on the basis of EU-Cambodia arrangements.
“Arrangement for bilateral trade after Britain leaves the EU are to be determined in the period between now and exiting the EU. The United Kingdom’s new departments for international trade and exiting the European Union have made clear the UK’s desire to remain an open trading partner after we leave the EU. This would entail FTAs with a range of trading partners,” added the email.
Bilateral trade between Cambodia and Britain rose from about $749.01 million in 2013 to $807 million 2014, according to the Ministry of Commerce. Cambodia’s total exports to Britain in 2014 was $56.45 million.
According to Kaing Monika, deputy secretary general of the Garment Manufacturers Association in Cambodia, Cambodia will not feel the direct impact, for the time being, of Britain’s decision to leave the EU despite it being one of the main destinations for the country’s garment exports.
Mr. Monika said the EU accounts for about 45 percent of Cambodia’s total garment exports, with Britain as one of the main destinations.
“Let’s just hope that the EU can keep moving forward and any negative effect would be minimal. For us, it’s an external factor which is out of our control. Cambodia should just do its best to make sure our investment climate remains conducive,” he added.
“Brexit is a very complicated matter and it is too early for us to exactly predict the consequences. Many don’t really know what is going to happen next.”
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