A senior official of the Ministry of Commerce said negotiations on the free-trade agreement (FTA) between Cambodia and China have achieved about 70 percent success so far and they are expected to sign the agreement by the end of the year.
Secretary of State of the Ministry of Commerce Sok Sopheak said that during the second round of the FTA negotiations, both parties achieved the good result from the 10 negotiation working groups through an online platform used to combat the spread of COVID-19. The first round took place in Beijing on Jan 20 and 21.
Sok added that both negotiating teams agreed on several chapters in the second round, including investment cooperation, economic and technical cooperation, One-Belt-One-Road Initiative cooperation and an e-commerce system.
“We have achieved lots for the second round of negotiations on the Cambodia-China FTA. However, we cannot reveal details publicly because some tasks are still under internal discussion,” Sok added. “The negotiating groups have agreed in principle on some unresolved issues and agreed and assigned certain tasks to smaller groups to bring those issues under further discussion and to report to the head of the negotiators by no later than May 2020. We hope that the negotiations in terms of technical groups will be completed by June this year. Some chapters we have completed in principle but those have to pass through the minister of commerce and both the Cambodia and Chinese governments.”
“Until today, the COVID-19 pandemic has cut the supply chain and value chain. Cargo transportation and orders have been cancelled because some countries are in a state of emergency, so it affects trade. Therefore, we are conducting negotiations via video so that when COVID-19 ends, we can resume our economic activities with China and make them recover quickly.”
In terms of timeframe, Sok said he is looking at June to share the proposal document with the relevant ministries and institutions. If there are no issues, the governments of both countries should be on target to sign the free-trade deal some time later this year.
“We conducted negotiations in December 2019, January 2020 and April 2020. Some countries take at least three years for negotiations. However, because Cambodia is in Asean, there is already a relationship. We just need to reform the law and the procedure of the law to facilitate investment, trade, imports and exports etc,” Sok further explained.
If successfully concluded, the FTA would be a new mechanism that boosts and diversifies the economic potential and visions of the two nations, according to Sok.
He said the purpose of this trade agreement is to expand trade, investment, services and a deeper cooperation between the two countries. Vitally, it will also enable Cambodia to export its “bountiful” products to the China market.
“With regard to investment, the FTA will contribute to the convenience of existing investors, expanding their businesses while attracting more investment to Cambodia,” he added.
Chheang Vannarith, president of the Asian Vision Institute, said on an earlier occasion that there will be a huge opportunity for the Kingdom when it comes to increasing the amount of its products being sent to the world’s second largest economy and the world’s biggest population of 1.4 billion.
“Through the FTA, Cambodia will be able to further boost exports, especially agriculture products, to market, and it will also strengthen the Kingdom’s value chain,” he said, explaining that Cambodia will become a significant market for the largest companies in China. He added that free trade will enable the country to attract investment from medium-sized Chinese manufacturers, allowing those companies to supply their products to large-scale companies in China.
The trade volume between the two countries has steadily increased from $5.16 billion in 2016 to $7.4 billion in 2018, according to government figures. The aim is to reach $10 billion in bilateral trade by 2023.