Cambodia can import nearly all types of goods to the European Union duty-free. However, many local businesses are unaware of how to export to the EU and take advantage of the trade benefit, EU officials said yesterday at a seminar designed to help explain the export process.
The EU is Cambodia’s second largest export market after the US, which imposes duties on Cambodian goods, and there is an opportunity to expand that trade, said Mikael Sami, a trade expert and first secretary at the EU delegation in Bangkok.
“They don’t know about the rules. There is a lack of knowledge but the information is there,” he said, adding that many Cambodian businesses lack overall know-how in export, which requires a large amount of paperwork.
Cambodia, like 48 other least developed countries, can export nearly all goods duty-free under the Everything But Arms initiative, which as the name suggests, excludes weaponry from receiving the duty free status.
Cambodia shipped about $650 million in goods to the EU in the first 11 months of 2009, most of it garments, according to the most recent Commerce Ministry statistics available.
Rafael Dochao Moreno, the charge d’affaires for EU delegation in Cambodia, said learning how to take advantage of the duty-free status will help develop and diversify Cambodia’s economy and increase Cambodian exports to the EU.
“I would like to see Cambodian exports to the EU both increase and diversify. Giving traders access to that information is an important step in that direction,” he said.
Han Rutten, the director for Intra Co Cargo and Tour, a trade, tourism and logistics company, said that garment factories and agricultural companies generally understand how to ship to the EU but that teaching other companies how to do that is key to developing the country’s manufacturing base. However, the government must also reduce the amount unofficial payments and paperwork to export, he said.
“It’s crucial. Everybody complains about the cost of importing and exporting goods. It is very, very high compared to neighboring countries it has everything to do with being competitive,” he said.
According to a 2009 World Bank report Cambodia is now ranked 127th out of 183 countries with regards to trading across borders, compared to 122nd in last year’s report. According to the report, businesses take 30 days to import goods and 22 days to export, a process that requires the completion of 11 documents. By contrast in Thailand, which is ranked 12th in the same category, it takes businesses 13 days to import and 14 days to export and only four documents are required.
Sok Sopheak, general director of the general directorate of trade at Commerce Ministry, said the ministry has already taken steps to reduce unofficial payments and the amount of paperwork such as certificate of origin.
“It is something that takes time,” he said.