Cambodia and South Korea yesterday announced they have signed an agreement to launch a joint feasibility study into the creation of a free trade agreement.
The agreement to conduct the study was signed between South Korea’s Trade Minister Yoo Myung-hee and Cambodian Commerce Minister Pan Sorasak in the Korean city of Busan, where a two-day Asean summit is being held.
The move follows a meeting between the countries’ heads of state in March where they agreed to increase bilateral trade volume and explore the possibility of entering into an FTA.
“Today’s agreement was signed after a consultation conducted by technical officials from both countries. The agreement concerns negotiation procedures to establish a joint feasibility study,” a statement from the Ministry of Commerce said.
The statement did not disclose how long the study will take, but South Korean media outlets have speculated it could take a year.
South Korea’s free trade deals with Singapore and Vietnam went into effect in 2006 and 2015, respectively.
“The FTA between Cambodia will become a crucial deal that helps Korean firms penetrate deeper into the Southeast Asian nation with prominent growth potential,” local Korean media quoted Ms Myung-hee as saying.
Figures from the Ministry of Commerce showed that the trade volume between Cambodia and South Korea reached $756 million last year, an increase of around 15 percent compared to 2017.
South Korea mainly exported knitted textiles, trucks and beverages to Cambodia while importing mostly clothes and shoes.
Prime Minister Hun Sen encouraged Korean private investors to learn more about the Kingdom’s business potential and to contribute to the country’s economic development.
“I would like to call on the private sectors and Korean investors who have not come to Cambodia to learn about the potential and investment opportunities in Cambodia and to invest in Cambodia to contribute to the development of the country. We will take full advantage of all these achievements,” the prime minister said.
Chheang Vannarith, president of the Asian Vision Institute, recently said there is huge potential to expand bilateral trade relations between the countries.
“However, in order to advance it to a comprehensive strategic partnership, both sides also need to strengthen security cooperation. So far, South Korea has not shown much security and strategic interests in engaging Cambodia and Southeast Asia in general,” Mr Vannarith said.
Cybersecurity and maritime security cooperation, according to him, would be potential areas of cooperation.
As Cambodia tries to harness the Fourth Industrial Revolution and embrace a digital economy, protection of critical infrastructure and key resources is becoming more vital, he added.