Cambodia registered a trade surplus of $1.13 billion with Japan in 2020, according to the Japan External Trade Organisation (JETRO).
The Kingdom exported $1.61 billion of goods in 2020, a decline of 6.7 percent from 2019. Japanese imports dropped 13.8 percent to $484.69 million during the same period..The two countries’ 2020 bilateral trade in 2020 totalled $2.09 billion.
Leading exports to Japan were leather goods, paper, office supplies, cosmetics, furniture, footwear, bags and garments. Chief imports from Japan included machinery, automobiles, electronic goods, furniture, fabrics and plastics.
Last week, the two countries hosted their 21st Public-Private Sector Meeting to bolster foreign direct investments (FDIs) into the Kingdom.
“The COVID-19 situation has, [resulted in] withdrawals from and delays in investment decisions by Japanese companies. However, thanks to the efforts of the Cambodian government, the membership of the JBAC [Japanese Business Association of Cambodia] has remained the same or [only] slightly decreased compared with previous years,” JBAC Chairman Yogo Kanda said at the meeting.
Japanese Ambassador Masahiro Mikami also used the opportunity to confirm that the two countries had agreed to “gradually resume cross-border travel”.
The Kingdom enjoyed more than $2.7 billion of Japanese FDI in 2019. This accounted for more than 6 percent of the foreign investment in Cambodia that year.
Cambodian Chamber of Commerce Vice-President Lim Heng previously said that trade with Japan would likely pick up once vaccines begin to roll out in both countries.
Late last year, Japanese Foreign Minister Motegi Toshimitsu and Minister of Foreign Affairs Prak Sokhon announced that they were in the early stages of establishing a “Business Track”, which will allow business travellers to conduct business activities in limited areas during quarantine periods, according to a Japan’s Ministry of Foreign Affairs news release.
The National Bank of Cambodia forecast on December 31 that the Kingdom’s economic growth will bounce back and see 4 percent in economic growth this year if vaccines are effectively rolled out during the first half of this year.
There are also signs that bilateral trade with Japan may rebound significantly once the pandemic has passed thanks to the number of trade pacts executed in 2020.
Last year, the Cambodia and Japan agreed to a free trade agreement to further increase bilateral trade, while Japan revised its FTA agreement with the ASEAN bloc.
The two countries are also signatories to the Regional Comprehensive Economic Partnership (RCEP), which when ratified, is due to become the largest FTA in the world.
Peter A Petrie, a senior fellow at the US Brookings Institute’s East-West Center, conducted a computer simulation predicting that RCEP will raise national incomes globally by more than $100 billion by 2030.
“According to computer simulations we published, RCEP could add $209 billion annually to world incomes and $500 billion to world trade by 2030,” said Petrie.