South Korean ambassador to Cambodia Park Heung-kyeong is highly optimistic that the new Cambodian investment law and free trade agreement (FTA) signed between the two countries would be important factors in enhancing bilateral trade and encouraging more direct investment flows from South Korea to the Kingdom.
The ambassador made the remark on November 16 at the Cambodia-Korea Forum 2021, which was held to disseminate information regarding the new law to about 100 Korean investors.
The event was organised by the Council for the Development of Cambodia (CDC), in collaboration with the South Korean embassy in Phnom Penh and the Korea Trade and Investment Promotion Agency (Kotra).
Park stressed that diplomatic relations between the two countries – which he said have steadily improved since they were re-established in 1997 – have boosted bilateral trade to remarkably high levels, reaching more than $1 billion in 2019.
However, as Covid took off, Cambodia-South Korea trade dropped to $884.88 million in 2020 from $1.032 billion in 2019, as shown by statistics from the Korea International Trade Association (Kita).
The Kingdom exported more than $317 million in 2020, sliding by 5.4 per cent year-on-year, and imported over $567 million, plummeting by 18.6 per cent versus 2019, Kita reported.
But on October 26, the Cambodia-Korea Free Trade Agreement (CKFTA) was formally signed, paving the way for the two countries to increase bilateral trade and investment flows. The CKFTA will enter into force 60 days after both sides have notified each other that their respective internal procedures have been completed.
On the investment front, the ambassador noted that South Korea is Cambodia’s second largest investor, injecting a total of nearly $7 billion into the Kingdom since 1997.
In addition to the FTA and the investment law, the double tax agreement and other measures to combat fiscal evasion will also contribute to growth in bilateral trade and investment, Park said.
At the same event, Cambodian ambassador to South Korea Chring Botum Rangsay lauded the efforts of the CDC and relevant ministries to bring about the new investment law, which she noted was promulgated by the King on October 15.
She noted that the two countries are in the process of reviving economic activity, following the severe global supply-chain disruptions caused by Covid-19.
Botum Rangsay said the new law and FTA “would further boost trade and investment relations between the two countries” and “spur socio-economic recovery after the Covid-19 crisis”.
CDC secretary-general Sok Chenda Sophea said the Korean business community in Cambodia, represented by the embassy and Kotra, and other stakeholders have played an important role in boosting trade and investment relations between the two countries.
“With the new investment law, the Korean side will continue to help spread the word to Korean businesspeople and investors to expand their businesses and invest more,” he said.
He noted that Korean investment has historically focused on almost all major sectors, such as agriculture, textiles, car assembly, banking and securities.