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Cambodia ‘easy’ on EU-Vietnam trade deal

Sok Chan / Khmer Times Share:
Cambodian farmers not unhappy with European Union-Vietnam free-trade deal. AFP

Cambodia will not show concern over the impact of the ratification of the European Union (EU)-Vietnam Free-Trade Agreement (EVFTA) which is expected to enter into force on Aug 1, according to senior government officials.

The officials said that the Cambodian government has been issuing many sharp measures to boost the country’s competitiveness and to support the private sector.

Commerce Ministry spokesman Seang Thay, said in the situation of a free market, everything is based on competition. He added that there are many free-trade agreements (FTAs) negotiations in the region that are not only the one between Vietnam and the European Union. So, in reality, each country will not do anything to ban the process of the FTA of one country and they absorb the opportunity to win others.

“For Cambodia, the government has issued many sharp policies to strengthen itself to prove a higher competitiveness especially to respond to the measures of the European Commission which plans to withdraw the EU’s preferential trade scheme under the Everything-but-Arms (EBA) [treaty],” Thay added.

He added that not only the Ministry of Commerce but other governments’ relevant institutions have been negotiating to open more markets through free-trade deals. He added that when Cambodia’s competitiveness is strong, the EVFTA will not have much impact on Cambodia.

“All the countries in the world do not enjoy only FTAs in the region, but they go further to bilateral free trade agreements. However, for Cambodia, we have to seek measures to improve policies and investment, trade and also strengthen our competitiveness. We have been now strengthening and facilitating many sectors so, when we are strong, we are not concerned about one country having an FTA with others,” Thay added.

At present, Cambodia has been negotiating FTAs with eight countries, but we could not say when they are going to be completed. However, the Cambodian government wants a positive result for the FTA, and the negotiation must be comprehensive, according to Thay.

Thay added that the situation of the negotiation with one country is different from another. Therefore, we cannot apply the method of the FTA negotiation with China to apply to the FTA with the UK, the United States or others. What we do is based on the situation, so sooner or longer, it is based on the bargaining.

On June 8, the Vietnamese lawmakers adopted resolutions ratifying the EVFTA and the EU-Vietnam Investment Protection Agreement (EVIPA) during a plenary sitting of the 14th National Assembly (NA)’s ninth session in Hanoi, according to local Vietnam’s Nhan Dan (People) newspaper.

It said that the EVFTA is the EU’s second deal with a member of the Association of Southeast Asian Nations (Asean), after Singapore, and is one of few the bloc has signed with a developing country.

The agreement is expected to help increase Vietnam’s gross domestic product (GDP) by an annual average of 2.18-3.25 percent in the first five years of implementation and 4.57-5.30 percent in the following five years.

Cambodia’s economic observers noticed that with the EVFTA, the Vietnamese product exports will be cheaper than Cambodia by 20 to 30 percent for instance on rice and garment exports. They said EU buyers would opt to buy them from Vietnam.

The observers added that Cambodia exports were for decades subsidised by the EBA – not that those goods were competitive but the EBA gave Cambodia a leverage which we are now losing if revocation of EBA takes effect in August.

They added that some strong advocacy over decades for Cambodia seriously enhanced its competitiveness but has often fallen on deaf ears because of a non-cohesive approach caused by “dysfunctionality within the government apparatus”.

During a news conference yesterday, Agriculture Minister Veng Sakhon said EVFTA has not caused any problem for Cambodia. He said that if EVFTA could boost Vietnam exports and can absorb more Cambodia agriculture products, it is a good sign.

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