Negotiations Underway To Increase Russian Trade With Cambodia

Commerce Minister Cham Pra­sidh met with Russian Em­bassy officials Friday, two days after Prime Minister Hun Sen announ­ced that Cambodia wanted to increase bilateral trade with Russia before Russia becomes a member of the World Trade Organization.

Russia, which embarked on the WTO-membership process in 1993, is the only major world economy not to have yet joined the organization.

Cambodia, which became a WTO member in 2004, has re­quested talks with Russia before it joins the organization.

“Russia is targeted as a place for Cam­bodia to open [its] market with,” Hun Sen said during a trade con­­ference at Phnom Penh’s Chak­­tomuk Theater on March 7.

“So we hope that his excellency Ambassador [Valery Tere­shchen­ko] will consider how many goods Russia could absorb from Cam­bo­dia in order to help Cambodia.”

Referring to the aid provided by the Soviet Union in the 1980s, Hun Sen said that Cambodia remembered how Russia had then helped the country, and was now in a position to return the favor and help Russia in its effort to join the WTO.

“This is a negotiation…please understand, because Cambodia is now opening its market,” he added.

Hun Sen’s comments were followed by a meeting between Cham Prasidh and Russian officials Fri­day, said Yi Sokhoun, who heads Cham Prasidh’s cabinet. The Rus­sian Em­bassy declined comment on the discussions, referring questions to Cambodia’s Commerce Ministry.

Russia, which has already comple­­ted bilateral negotiations with at least 29 WTO members, is not one of Cambodia’s top trading partners, according to the WTO.

“If we are able to export garments to the Russian market, then we have a market which will create many jobs,” Cham Prasidh had told reporters at the trade conference.

The ministry is interested in discussing quota-free and tax-reduced exports of garments, textiles and shoes to Russia, said Thon Virak, de­p­uty director of the ministry’s foreign trade department.

“If we can export sweaters to the [European Union], why can’t we export those goods to Russia, too?” he said.

In 2005, Cambodia exported $1 mil­l­ion worth of goods to Russia while Russia exported $3 million in goods—mostly truck parts—to Cam­bodia, Thon Virak said.

SRP lawmaker Son Chhay said he welcomed increased trade with foreign countries, but that Cambo­dia should use caution. “Russia has a lot of mafia,” he said.

On Jan 29, National Assembly and CPP Honorary President Heng Samrin announced that he had asked Russia to forgive Cam­bodia’s long-term debt to Mos­cow, adding that Russian officials have ex­press­ed an interest in

ex­ploring for oil in Cambodian waters.

According to Tim Smyth, managing director of Indochina Re­search, “Cambodia could benefit from Russia’s expertise as a global operator, on the technical and management levels.”

However, Cam­bodia should be aware that Russia’s approach towards managing its own oil reserves “leaves something to be desired in terms of transparency,” Smyth said.

He added that the Cambodian gar­ment industry is well prepared to open its market to Russia.

The sector, Smyth said, has used its good standing with the Inter­national Labor Organization to create a “niche product” to markets in the developed world.

But whether Cambodia’s reputation for fair labor practices would attract Russian buyers is uncertain, Smyth said. Cambodia, for its part “would have to assure them [that buying Cambodian garments] works in their interest.”

     (Additional reporting by Suzy Khimm.)

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