Cambodia and China 'close to signing' FTA

Legislation | | MIC Customs Solutions |

There may be a free trade agreement between China and Cambodia as early as this year.

Cambodia and China could have a free trade agreement signed and completed later this year after wrapping up their first round of negotiations, it has been claimed.

According to the Bangkok Post, the two nations held successful meetings last month and are hopeful discussions on the finer details will have been completed by the middle of 2020. This would then allow official documentation to be signed into law before December.

The Cambodian ministry of economy and finance said in a statement to the news provider: "This trade agreement is established to expand trade, investment, services and a deeper cooperation between the two countries."

Indeed, writing for the Khmer Times, Lin Menghour of the Asian Vision Institute explained an FTA could have benefits for both sides.

The agreement would encourage greater trade and investment thanks to the removal of tariff and non-tariff barriers, which may help Cambodia in its goal of becoming an upper-middle-income country by 2030.

Furthermore, the expert pointed out that Cambodia would benefit from having somewhere else to export its wide variety of products, thereby helping businesses to expand into more markets.

Cambodia currently exports mainly textiles, but also vehicles, rubber and fish to nations including the US, Hong Kong, Canada and the UK. 

For China, such a deal would have the advantage of further strengthening ties with the rest of south-east Asia, something it is keen to build upon during this new decade.

Should the Cambodia-Chinese FTA come to fruition, it may also help Cambodia in terms of prompting other nations that already have deals with China to begin trade talks there and opening it up as a potential market. 

China currently sends a significant amount of state aid to Cambodia and has also completed a number of infrastructure projects there, although concerns have been raised over exploitation of the land in exercises such as mining, something an FTA might need to address going forward.