Cambodia-China Free Trade Agreement (Ccfta)
Both free trade agreements are due to enter into force on 1 January 2022. “The government has also taken steps to mitigate the economic and social impact of the pandemic. These measures included free COVID-19 vaccines and treatments, remittances to poor households, economic incentives and credit restructuring programs,” he said. “This agreement will play a huge role in boosting domestic production, especially in certain agricultural segments such as bananas, mangoes, cassava, longan, cashew nuts, etc.,” Thay said. RCEP will eliminate up to 90% of tariffs on goods traded between its signatories over the next 20 years, while the DCFTA will increase the share of duty-free goods in goods traded between Cambodia and China to more than 90% for both countries. A senior Commerce Ministry official said negotiations on the Cambodia-China Free Trade Agreement (FTA) have so far been about 70 percent successful and are expected to sign the agreement by the end of the year. . The EU and India agreed on 8 May to resume long-stalled trade talks to resume relations at a video summit titled “According to initial DCFTA estimates”, the trade pact will add $325 million, or less than two percent of total GDP, to the Cambodian economy, while Cambodia`s withdrawal from EBA status will affect one-fifth of the country`s exports to the EU. a total of $1.1 billion. Through the DCFTA, Cambodia hopes to increase bilateral trade with China from $8 billion in 2020 to $10 billion by 2023. This is a timely development for Cambodia, as businesses continue to suffer from the European Union`s (EU) withdrawal from The All But Arms (EBA) status in 2020. EBA status was withdrawn due to what the EU considered to be serious and systematic human rights violations in Cambodia.
The EBA offers duty-free access to EU markets to 49 of the world`s poorest countries. Other benefits include freer movement of goods and additional opportunities to attract foreign investment to Cambodia, as well as a boost for Cambodian agricultural exports to the Chinese market, he said. according to the Cambodian Ministry of Commerce. In comparison, Cambodia has recorded a trade surplus with the EU and the United States, and relations have brought foreign currency to the country. Any renewal of EU tariffs could cost the economy an additional $130 million each year, although the total cost may be higher due to the loss of investment. Bilateral trade between Cambodia and China reached nearly $7.968 billion in the first nine months of 2021, up more than 38.36 percent year-on-year, the Ministry of Commerce reported. RCEP is a mega-trade pact between 10 ASEAN member states and its FTA partners, namely China, Japan, South Korea, Australia and New Zealand. The agreement is expected to help facilitate economic relations between the two countries.
It aims to diversify the export destination of Cambodian products; promoting bilateral trade, services and investment; and promote post-Covid-19 economic recovery in both countries. Cambodia and China plan to increase bilateral trade to $10 billion by 2023. Heng said: “If in the future we no longer have the US EBA [Everything But the Arms Trading System] or the GSP [Generalised System of Preferences], we could ask the Royal Government to negotiate free trade agreements with the EU and the US. Although Hong Vanak, director of international economics at the Royal Cambodian Academy, said it was “a good thing” to conclude more free trade agreements, he expressed concern about the kingdom`s supply of raw materials for trade. The kingdom has set itself the ambitious vision of becoming an “upper middle-income” country by 2030 and a “high-income” economy by 2050, as defined by the World Bank. The official provision as one of the two statutes generally leads to the abolition of generalised systems of preferences and similar preferential arrangements granted by trading partners. Earlier last month, Foreign Minister and International Cooperation Prak Sokhonn and his Chinese counterpart Wang Yi pledged to work together in China to speed up domestic procedures for ratifying the DCFTA, promote trade, investment and tourism between the two countries for the benefit of the people and build a common destiny. Anthony Gill, acting director of the Asian Development Bank (AfDB) for Cambodia, said Cambodia would benefit from the two agreements, saying they would help expand market access and attract more investment to Cambodia. .
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