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Second round of UAE CEPA talks Dec 19-21

Phnom Penh Post - 29 November 2022

Second round of UAE CEPA talks Dec 19-21
By Hin Pisei

Cambodia is set to host the second round of formal talks on the bilateral Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA) from December 19-21, with the deal expected to have substantial positive effects on the Kingdom’s trade with the Middle East.

A CEPA is a type of free trade agreement (FTA) generally designed for a more holistic coverage beyond just commodities, and can contain provisions for services, investments, dispute resolution, intellectual property rights, government procurement, and additional forms of specialised economic cooperation.

Cambodia and the UAE held the first round of formal negotiations on the deal, in Abu Dhabi from October 24-26, with results by and large lauded as “remarkable”. The ministry is now conducting a series of consultation meetings with relevant parties to gather more input before the follow-up round.

In preparation for the second round, Minister of Commerce Pan Sorasak on November 28 led an inter-ministerial meeting to gauge the status of the talks and brainstorm a set of key points to be raised with the Emiratis.

During the meeting, Sorasak cheered on the CEPA negotiating team – headed by commerce ministry secretary of state Tek Reth Kamrong – to forge ahead with a proactive and highly-responsible attitude to ensure that the deal is fit for purpose and delivers meaningful benefits for consumers, producers, businesspeople, investors and the general public, the ministry said in a statement.

Penn Sovicheat, ministry spokesman and deputy head of the CAM-UAE CEPA negotiating team, confirmed to The Post the December 19-21 dates for the second round of talks, which he said would be presided over by Sorasak.

Sovicheat underscored that the deal would be “larger” than Cambodia’s bilateral FTA’s with China and South Korea, and bring many positive effects to the Kingdom.

“The CAM-UAE CEPA will be comprehensive and long-term. Cambodia has included some key items as goods for export to the UAE market, such as agricultural products, [as well as whole] and processed halal foods made of beef and chicken,” he said.

Halal foods are those permissible under Islamic Law, as defined by the religion’s holy book, the Quran. The consumption of pork and alcohol are famously prohibited by religious edicts.

Sovicheat added that to optimise its impact on economic development and sustainability as well as maximise its economic benefits, the deal has been organised into several chapters.

These include: trade in goods and services; investment; electronic commerce; trade facilitation; technical barriers to trade; sanitary and phytosanitary measures; intellectual property; economic cooperation; and small- and medium-sized enterprises.

The CEPA will not only open the door wider for trade between the two countries, but also enable more Cambodian merchandise to be resold in Middle Eastern and African countries, with the UAE serving as a gateway, Sovicheat said, listing footwear and general spare parts and components as a major Cambodian export to the Arab world.

At the talks, Cambodia will focus on the possible benefits stemming from the import of Emirati energy, oil and fertiliser, as well as sending skilled workers to study and work in the associated sectors to gain experience with the emerging technologies and advanced processes involved, he added.

He stressed that the negotiations will be dealt with the “utmost care”, and regarded as a model for similar talks with other countries in the future.

Last month, Sovicheat said the talks are expected to be completed by 2023.

Royal Academy of Cambodia economics researcher Ky Sereyvath commented that the UAE is a rich country with a less productive agricultural sector than Cambodia’s, saying that strong market relations could substantially increase the amount of agricultural items shipped to the seven-emirate union from the Kingdom.

“This is the next step in Cambodia’s diversification into the Arab market. Shipping there can also be easier than shipping to Europe and the US due to the closer proximity,” he said.

Sereyvath echoed Sovicheat’s sentiment that, through the CAM-UAE CEPA, Cambodia can also gain the knowledge and experience needed to develop its mineral and oil resources.

Bilateral trade between Cambodia and the UAE hit $151.547 million in 2021, up 52.66 per cent from $99.271 million a year earlier, according to the commerce ministry.

Cambodia’s exports to the UAE accounted for $52.116 million, up 18.93 per cent from $43.822 million in 2020, and imports $99.431 million, up 79.32 per cent from $55.449 million. The Kingdom’s trade deficit with the UAE expanded 306.95 per cent to $47.315 million in 2021, from $11.627 million a year earlier.

Major items traded between the two countries include garments, footwear, bicycles, travel goods, tobacco, milled rice, electrical equipment, vehicles and components thereof, rubberised asphalt, tuber sugars, animal feed, oil, plastics and paper.

 source: Phnom Penh Post