Prime Minister Hun Sen says he wants the nation to have many trade agreements with different partners to diversify its economic partners and attract more foreign direct investment.
“We are keen to have trade agreements with difference partners,” Mr Hun Sen said during a news conference, noting that the Kingdom is now pushing to sign free trade agreements (FTAs) with developed economies.
Currently, Cambodia does not have any bilateral FTAs with any major individual economic partners. However, Mr Hun Sen said the Kingdom is taking steps to negotiate several – namely with South Korea, and the Eurasian Economic Union – a bloc of countries in central and northern Asia and Eastern Europe with a combined gross domestic product (GDP) of $5 trillion.
Cambodia will make a trade deal with China this year after the two countries wrapped up first-round negotiations.
“We have just finished a first-round negotiation of a trade deal with China and, as planned, this agreement will be signed when the Chinese Prime Minister attends the 13th ASEM [Asia-Europe Meeting], which is scheduled to take place in Phnom Penh in November,” he said.
In addition, the prime minister said the United Kingdom wants to maintain a policy to continue preferential trade with least-developed countries (LDC) such as Cambodia especially after departing the European Union.
“If the UK wants to have an FTA with Cambodia, we welcome it. The UK also requested us to become a dialogue partner with Asean,” Mr Hun Sen said, adding that Cambodia will certainly help to support the UK to become a comprehensive partner with Asean.
Last September, Heather Wheeler, UK parliamentary undersecretary of state at the Foreign and Commonwealth Office, met Foreign Minister Prak Sokhonn at the Foreign Ministry headquarters in Phnom Penh, where Wheeler told Prak that the UK will request Cambodia’s support to become a dialogue partner of Asean after it leaves the EU.
It’s not been made clear whether the UK will have to abide by a recommendation by the European Commission to slash its existing trade deal with the EU known as the Everything but Arms agreement before the transition period for the UK leaving the EU ends on Dec 31.
Wheeler said the UK wants continue to boost trade with Cambodia, which currently stands at around $1 billion.
Diversification is another key term being used by Cambodian policy makers and analysts alike, said Chheang Vannarith, president of Asian Vision Institute.
“There are three layers of diversification at the international, national, and local levels. Internationally, Cambodia needs to build more economic and strategic partnerships, expand export markets and make new friends,” he added.