Cambodia's trade value with the other 14 members of the Regional Economic Comprehensive Economic Partnership (RCEP) reached $31.03 billion last year, marking a four per cent increase over 2021, according to commerce ministry data.
The RCEP is the world’s largest free trade agreement (FTA), involving the 10 ASEAN countries of Cambodia, Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, as well as five additional Asia-Pacific nations: Australia, China, Japan, New Zealand and South Korea.
The pact kicked in on January 1, 2022 in 10 out of 15 countries, including Cambodia, and has since taken effect in all signatory states, except for Myanmar and the Philippines.
Figures posted by the Ministry of Commerce show that, in 2022, Cambodian exports to and imports from the other 14 RCEP member states stood at $6.344 billion and $24.687 billion, respectively, marking seven per cent and three per cent increases on a yearly basis.
By comparison, General Department of Customs and Excise data show that Cambodian exports to and imports from the top nine RCEP trading partners reached $6.268 billion and $24.361 billion in 2022, respectively, up 6.93 per cent and 2.62 per cent compared to a year earlier.
These trading partners are, in order by trade volume, mainland China, Vietnam, Thailand, Singapore, Japan, Indonesia, South Korea, Malaysia and Australia.
Commerce ministry undersecretary of state and spokesman Penn Sovicheat commented that the number of exporters taking advantage of the RCEP or the Cambodia-China Free Trade Agreement (CCFTA) – which also took effect on January 1, 2022 – recorded a significant uptick in the second half of last year.
This, he said, was evinced by a rise in requests for the corresponding certificates of origin.
Sovicheat affirmed that the ministry has published materials for exporters comparing FTA versus non-FTA tariff levels; detailing sanitary, phytosanitary, rules of origin, and other technical requirements; and outlining ways to squeeze the most value out of these trade pacts.
A year on after entering into force, the RCEP has been hailed by analysts and the local business community for its role in boosting production and trade, attracting investors, and general economic development.
Although Logistics and Supply Chain Business Association in Cambodia president Chea Chandara welcomed the increase in export flows among RCEP member states, he believes that a greater portion of Cambodian exports could be benefitting from the pact’s concessions.
“Since Cambodia is a major producer of agricultural products, by promoting the processing of produce for export under the agreement, economic growth will undoubtedly improve accordingly,” he said.
Hong Vanak, director of International Economics at the Royal Academy of Cambodia, remarked that the RCEP has stimulated investment and export growth, and has been a key economic driver for Cambodia, but highlighted the Kingdom’s trade deficit with the remainder of the bloc – which slightly increased in 2022 to over $18.34 billion.
“On the other hand, Cambodia is indeed a developing country, and there is high demand for a variety of raw materials to be used by factories and enterprises for processing and construction.
“In a free market regime, there is no limit on import or export volumes, so that member states can produce for the betterment of export, to meet the needs of high-demand countries,” he said.
To step up the volume of Cambodian exports benefiting from the RCEP or similar deals, the local business community should be more aware of the Kingdom’s strengths, such as agriculture, he suggested.
He called for strengthening Cambodia’s agricultural potential and an increase in the export of higher value-added products, to reap in more revenues from international markets.