Cambodia, Thailand Agree to Ambitious Trade Goals

Prime Minister Hun Sen and his Thai counterpart, Prayuth Chan-ocha, agreed to boost bilateral trade by 300 percent—to $15 billion—by 2020 during meetings in which they also signed off on deals to open two new international border crossings and a railway line linking Phnom Penh and Bangkok.

During the 2nd Cambodia-Thailand Joint Cabinet Retreat in Bangkok, the two leaders signed a series of agreements aiming to increase trade, security and tourism, as well as cooperation in agriculture and labor, according to a joint press statement issued after the weekend meetings.

Prime Minister Hun Sen, left, speaks to his Thai counterpart, Prayuth Chan-ocha, during a signing ceremony at the Government House in Bangkok on Saturday. (Reuters)
Prime Minister Hun Sen, left, speaks to his Thai counterpart, Prayuth Chan-ocha, during a signing ceremony at the Government House in Bangkok on Saturday. (Reuters)

“On trade and investment, the two prime ministers agreed to triple the current bilateral trade volume by 2020,” the statement said. Total trade between the two countries reached $5 billion last year, with Cambodian exports accounting for $571 million, according to the Commerce Ministry.

The deals signed by Mr. Hun Sen and General Prayuth focused on the economic development of the countries’ shared border and included agreements to increase investment in transport infrastructure, border checkpoints and special economic zones (SEZs) in the border provinces of Banteay Meanchey and Koh Kong in Cambodia, and Sa Kaeo and Trat in Thailand.

“Train service between Phnom Penh and Bangkok would start operation by the end of 2016,” the statement said. The prime ministers “also agreed to expedite the opening of two additional international checkpoints,” it said.

“The aforementioned international checkpoints and the SEZs will transform the border area into a major trading and production hub,” the statement added, noting that this would open the border for the “free movement of people and labor in the area.”

The countries also signed a new labor agreement under which Thailand will train Cambodian workers, agreed to create “sister hospitals” along the border for migrant workers and pledged to promote the “Two Kingdoms, One Destination” tourism campaign.

During a press conference on Saturday following the top-level meetings in Bangkok, which marked the 65th anniversary of diplomatic relations between Cambodia and Thailand, Gen. Prayuth said relations between the countries were “the best” they had ever been, according to Thai media reports.

Also during the event, Mr. Hun Sen announced that he had invited the Thai prime minister to a joint retreat in Cambodia next year, and said he planned to write a song about how well the two countries were getting along.

“We have now seen the two sides sign a joint statement on various problems, including those related to migrant workers and training on human resources,” Mr. Hun Sen said, standing alongside Gen. Prayuth.

“The Thai side is responsible for constructing the railway and I will write a song for the ‘friendship bridge,’ and people from the two sides will be able to dance together with the song,” he said.

Jayant Menon, lead economist at the Asian Development Bank’s regional integration office, said that the deal to promote increased investment and the free flow of labor in border areas suggested that Cambodia had embraced Thailand’s potential as an employment destination for migrant workers.

Although an increase in Cambodian workers finding jobs at Thai SEZs may slow the development of Cambodia’s SEZs, Thailand ultimately offered better benefits and salaries, Mr. Menon said.

“If the government is recognizing this and facilitating this kind of labor movement, than I think this is a fantastic development,” he said. “I was worried they would become inward looking and nationalist.”

Mr. Menon said that while it was too soon to tell whether the $15 billion trade figure was achievable, there remained plenty of room for greater economic activity between the two countries.

“You would imagine that growth areas in Cambodia are not just for more agriculture products, but more processed products. And for Cambodia, importing more manufactured goods from Thailand,” he said.

(Additional reporting by Colin Meyn)

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