Cambodia and Kyrgyzstan are exploring the possibility of launching formal negotiations for a bilateral free trade agreement (FTA), within the framework of the Eurasian Economic Union (EAEU), among other bilateral arrangements, according to the Kyrgyz embassy in Ankara.
Cambodian ambassador to Turkey Kim Heng Meas and his Kyrgyz counterpart Kubanychbek Omuraliev met on June 1 to discuss prospects for trade and economic cooperation under a potential Cambodia-EAEU FTA (CEFTA), and separate deals between the Kingdom and Kyrgyzstan on free trade, double tax avoidance and visa-free regimes.
An economic union comprising five member states – Kyrgyzstan, Armenia, Belarus, Kazakhstan and Russia, the EAEU is home to 184.6 million people and represents a combined gross domestic product (GDP) of $4.778 trillion, according to International Monetary Fund estimates for 2020.
On March 10, the Kingdom’s technical team and its Eurasian Economic Commission (EEC) counterpart held a virtual preparatory discussion to share thoughts and opinions ahead of the third round of preliminary working-level talks toward formally launching FTA talks and expanding trade markets and investments.
Ministry of Commerce undersecretary of state Samheng Bora led the Cambodian delegation at the meeting, and the EEC team was led by Division of Integration Development director Gohar Barsegyan.
The EEC is the executive body of the EAEU and is responsible for implementing decisions, upholding the bloc’s treaties and managing the day-to-day affairs of the five-nation bloc.
On December 4, 2019, Minister of Commerce Pan Sorasak and Hidetoshi Nishimura, president of Jakarta-based Economic Research Institute for ASEAN and East Asia (ERIA), launched a report on the feasibility study on the CEFTA at a ceremony held at the ministry.
Speaking at March 10’s discussion, Bora emphasised that the report examined the key impacts of the would-be pact on the Kingdom and ASEAN in terms of trade, investment, welfare and growth on the domestic and regional economy.
And the study in turn laid the groundwork for the FTA that would allow both sides to increase trade, investment and economic collaboration, he added.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, highlighted Kyrgyzstan’s “strong economic potential” from among EAEU member states.
He said June 1’s dialogue in Turkey demonstrates that the two sides “want to know more about what kind of goods can be exchanged in order to facilitate their domestic production, to boost production in accordance with the needs of partner countries”.
The two countries’ desire to expand bilateral cooperation and ink the CEFTA to further boost trade stems from the “historical fact” that the Kingdom has maintained solid relations with Kyrgyzstan for many years, he said.
“This bilateral relationship is very important in promoting trade and investment, to prop up the Cambodian economy. And the EAEU trade agreement is also very important to help offset losses from the 20 per cent [of items affected by the partial withdrawal] of the EU’s ‘Everything But Arms’ [EBA] scheme, and in preparation to prevent other risks that may occur in the future,” Vanak said.
According to Vanak, the better part of the Kingdom’s exports to the bloc comprise of agricultural products and textile products, while imports consist of agricultural machinery and pharmaceutical products.
The Kingdom could look into diversifying exports to its trading partners, he suggested.
Bilateral trade between Cambodia and the EAEU was worth $67.37 million last year, increasing by 18.22 per cent over $56.98 million in 2019, according to data from the commerce ministry.
Of that, the Kingdom’s exports were worth $52.19 million, inching up by 0.73 per cent year-on-year from $51.81 million in 2019, and imported $15.18 million, rocketing by 193.57 per cent from $5.17 million.