Thousands of Cambodian products could soon be shipped duty-free to the Eurasian Economic Union (EAEU) market, a huge free-trade bloc, after the Kingdom made moves to sign an agreement with the union.
The potential free-trade agreement (FTA) was disclosed during a discussion between Cambodian Prime Minister Hun Sen and his counterpart Dmitry Medvedev, the Russian Prime Minister. The talk was held on the sidelines of the Asean Business and Investment Summit in Thailand’s Bangkok on Sunday.
Mr Hun Sen said Russia has taken big efforts to support the negotiations.
“We would also like to thank Russia’s principle support for efforts in helping to negotiate the free trade agreement between Cambodia and the union,” he was quoted as saying in a Facebook post.
The prime minister said Cambodia is now asking Russia to formally support Cambodia’s official request to the Eurasian Economic Commission to sign the deal.
“This is a very import move and we expected that the free trade agreement between Cambodia and the EAEU will be signed in the near future once the negotiation is completed,” Mr Medvedev was quoted as saying on Mr Hun Sen’s Facebook post.
Russian News Agency TASS reported that five Asean nations –Brunei, Indonesia, Cambodia, Thailand, and the Philippines – have expressed interest in signing free trade agreements with EAEU.
Mr Medvedev said the union is open to cooperate with those nations.
“I would like to point out that the union is open to cooperation with all interested partners and welcomes the interest those five Asean countries have shown,” he said.
He noted that the EAEU has experience in creating a common market and so far free trade agreements had been signed with Vietnam, Singapore, and China, while talks for creating one with India are underway.
EAEU is an international organisation for regional economic cooperation composed of five member states: Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan. Together, these countries are home to 183 million people and represent a combined gross domestic product of about $5 trillion.
Speaking to Khmer Times on Tuesday, Cambodia Chamber of Commerce Vice-President Lim Heng said EAEU will offer great opportunities in terms of trade expansion for Cambodian products.
He said about 4,000 to 5,000 types of Cambodian goods will be allowed duty-free in the EAEU if the FTA is signed. Most would be agricultural and textile products.
“This is a good opportunity for the Cambodian economy. We would be able to attract more foreign investors to our country as well as export new products to the Union,” he said.
“The Cambodia Chamber of Commerce and the Ministry of Commerce have been working to make the agreement a reality. If it happens soon, it will be great for Cambodia,” he said.
Cambodia is hoping to follow the example of Vietnam, which signed an FTA with the EAEU in 2016.
That has resulted in bilateral trade with Russia growing from essentially zero to $10 billion per annum in the past two years, while Russian investments into Vietnam totalled about $1 billion, according to research by Dezan Shira & Associates.
“There are advantages for Russian and EAEU investors in Cambodia and Vietnam as both are Asean members and as such have FTAs with both China and India,” it said.