The National Assembly yesterday ratified free trade agreements with China and South Korea that were originally signed by the ten member countries of Asean in 2009.
Similar free trade agreements made by other countries in the region and Asean nations have already resulted in a rise in Cambodian exports. The Asean-Japan Free Trade Agreement, which took effect in Cambodia in December, has triggered substantial growth in garment exports to Japan, which increased by 144.2 percent to $17.67 million between January and April.
“These agreements will contribute to Asean’s outlook,” said Kong Vibol, secretary of state at the Ministry of Economy and Finance, who defended yesterday’s votes. “It will contribute to the free flow of capital investment, goods, services and technology.”
Mr Vibol said that the total amount of Chinese “investment” in Cambodia had reached $8 billion by last month. Though it was unclear how much of this money came from private investment, or soft loan financing from the Chinese government.
Mr Vibol added that China had recently lifted taxes on 418 different goods for Cambodia, resulting in rising exports for “some agricultural products.”
Qian Hai, spokesman for the Chinese embassy in Phnom Penh, said that the latest free trade agreement with Asean nations would put Cambodia in a promising position to strengthen its ties with China.
“Right now in Cambodia we are concentrating more on infrastructure like roads,” Mr Qian said. “We want to help Cambodia to have their own ability to develop their economy.”
He added that China would be increasing its investment in the agricultural sector in the coming years, especially in rice production.
Speaking at the National Assembly yesterday, SRP lawmaker Cheam Channy welcomed the trade agreements with China and South Korea but said the government still had a lot to accomplish in reducing transportation costs as well as red tape for businesses.
“I would like the government to offer a proper price for services to investors,” he said.
Data from the Council for the Development of Cambodia show that approved Chinese investment accounted for over 20 percent of total investment in the country, most of which has occurred in the garment, energy and agricultural sectors.