Cambodia-Korea FTA comes into force today
Khmer Times | 1 December 2022
Cambodia-Korea FTA comes into force today
by Kang Sothear
The Cambodia-Korea Free Trade Agreement or CKFTA comes into force today and will be used by two parties to encourage more investors from The Republic of South Korea to invest in the Kingdom and export products to the Korean counterpart and third countries, according to a senior official of the Ministry of Commerce (MoC).
Article 10.10 of CKFTA states that the free trade agreement between the two countries shall be effective 60 days after Cambodia obtained a diplomatic notification from its South Korean counterpart as per their negotiation and consent, said an official, who is also the spokesman of MoC.
Seang Thai, Secretary of State of MoC, told Khmer Times yesterday that Cambodia received a diplomatic note on the finalised internal procedures of South Korea on 2 October 2022 and the document indicated that CKFTA shall enter into force on December 1, 2022, in accordance with the statement of the Article.
“In addition to that, both parties will form a joint committee and workforces to track and monitor the operations and implementation of this agreement to achieve high effectiveness,” Thai said. The notification came after the Embassy of the Republic of Korea issued a notification to the Ministry of Foreign Affairs and International Cooperation (MFAIC) of the Kingdom of Cambodia on October 2, 2022.
Lim Heng, Vice-President of the Cambodia Chamber of Commerce (CCC), told Khmer Times that MoC and CCC itself have been waiting for the official beginning of CKFTA and it is most likely that they would organise events such as consultative workshops with stakeholders, especially private sector on the implementation of the agreement.
Heng went on to add that the private firms applauded the CKFTA as it would be another gateway for them to expand exporting their goods in addition to the current markets and tax preferences such as Everything But Arms (EBA) and Generalised System of Preferences (GSP) offered by the United States will run out of for Cambodia shortly.
“We will discuss to gain maximum benefits from the agreement, issues that would happen to us while we are implementing and at the same time, we will also discuss responses to those issues or challenges, which means solving problems, while implementing,” said Heng, adding that there would not be any applausive events for the enacted agreement.
“The more important thing is the implementation and during the implementation, we would see the problems and challenges or requirements and then we will put those on the table to find responses for maximising its profits,” he said. Cambodia would rather be more dependent on such free trade agreements, he added.
He further said the Cambodian government has set goals to establish this type of agreement with other countries such as Japan, India and the United Arab Emirates. Government officials from different ministries discussed Cambodia’s readiness for the second round of negotiation on the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA) to be held in December this year.
Under CKFTA, Cambodia is expected to receive over 95 percent of the total tariff lines from the Republic of Korea to export 92 percent of all of its goods to the latter at zero percent of customs duty immediately after the agreement is entered into.
Pen Sovicheat, Undersecretary of State of MoC, told Khmer Times that CKFTA will provide additional benefits from the trade between the two countries as the tariff lines, tariff rates and some conditions under the RCEP that also include the Republic of Korea are still limited, unlike CKFTA. “So, CKFTA will fulfill the things we have received through RCEP and expand our markets in that country, which enables us to expect that the bilateral trade would be boosted further, but the rest percentage of tariff lines that we have not received yet refers to some goods that are still sensitive to the partner’s economy and so they cannot give us, while some goods require complete fulfilment of technical conditions,” Sovicheat said.
The spokesman said CKFTA will allow Cambodia to export peppers, bananas, cashew nuts, potatoes, pineapples, coffee, fruits, corn, longans, tobaccos, meats, aquaculture products, sugar, rubbers, apparel, textiles, footwear, bicycles, travel materials, bags, accessories, industrial goods and more, while the Republic of Korea will be allowed to export electronic devices, automobiles, construction machinery, agriculture machinery, cloth raw material, processed cloth, cosmetics, food, groceries, construction materials and spare parts and more.
CKFTA is expected to foster Cambodia’s exports to the Republic of Korea such as garments, textiles, foot wears, bags, accessories, electronic devices, rubbers and agricultural products, according to the statement, adding that CKFTA is the second bilateral free trade agreement for Cambodia following the bilateral free trade agreement between the Kingdom and China that was enforced in January this year.
The National Assembly of the Republic of Korea on September 27, 2022, gave its formal consent to CKFTA through its ratification to make Cambodia’s second bilateral trade agreement officially valid and effective for enforcement in a most likely 60-day period of time.
