Free Trade Agreement with EAEU bloc may diversify export market

PHNOM PENH (The Phnom Penh Post/ANN) - As the government moves to a Free Trade Agreement (FTA) with the Eurasian Economic Union (EAEU), garment and rice industry insiders expect the new trade corridor to diversify the Kingdom’s export market.

As the government moves to a Free Trade Agreement (FTA) with the
Eurasian Economic Union (EAEU), garment and rice industry insiders
expect the new trade corridor to diversify the Kingdom’s export market.

The Ministry of Commerce on Wednesday released a report on the
results of its assessment of a potential FTA deal between Cambodia and
the EAEU.

Garment Manufacturers Association in Cambodia
secretary-general Ken Loo told The Post on Thursday that the Kingdom’s
garment and footwear sectors would gain a new market if an FTA is
signed.

“We will have duty-free access to exports, but we don’t know when we’ll reach the FTA. That is all I can say,” he said.

Cambodia Rice Federation vice-president Chan Sokheang said the
agreement will boost the competitiveness of the Kingdom’s export-rice
processing industry among its neighbours.

“Our export market will grow further and will not rely on just the
European and Chinese markets. We have to open up more markets.

“Today, our premium varieties of rice are in very fierce competition
with those of our neighbouring countries. The agreement will allow us to
boost our competitiveness,” he said.

Speaking at the report launch ceremony, Minister of Commerce Pan
Sorasak said the benefits of the FTA noted in the study include
industrial diversification and expansion of financial services,
transport, digital economy and agricultural services.

“An FTA will enable the two parties to increase economic cooperation, trade in goods, services and investment.

“We expect to increase trade and investment opportunities and mutual
investment. Cambodia can increase its garments and textiles exports,
agricultural products and other goods,” he said.

The EAEU is an economic bloc covering Eastern Europe and comprises
five countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.
The bloc has a combined population of 176 million and posted a gross
domestic product of $2.5 trillion in 2016, Sorasak said.

Last month, Prime Minister Hun Sen discussed the agreement with
Russian Prime Minister Dmitry Medvedev during the 14th East Asia Summit
in Thailand.

Speaking at the Asean Business and Investment Summit last month,
Medvedev said as the EAEU had signed an FTA deal with Vietnam in 2015
and with Singapore on October 1, it is currently in talks with “other
partners in Asean” about possible FTAs as well, Singapore’s The Straits
Times reported.

He also called for joint efforts with Asean to tackle monopolies by
high-tech companies to allow a “healthy competition and the introduction
of new promising ideas”, The Straits Times said.

Ministry of Commerce secretary of state Tek Reth Kamrong told
reporters in March that the EAEU has provided tariff-free access for 46
Cambodian made products for three years due to the Kingdom’s Least
Developed Countries (LDC) classification.

Though preferential status will last until Cambodia has graduated
from its LDC rank, Reth Kamrong said the negotiation for an FTA deal
with the bloc is a good initiative.

EAEU tariff preferences granted to Cambodian goods include rice, silk, textiles, meat, vegetables and coffee.

Garment, textile and footwear industry exports rose 13.18 per cent
year-on-year during the first nine months of this year to more than
$7.973 billion, data from the General Department of Customs and Excise
shows.

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