New Shipping Pact Boosts Regional Trade

Cambodian and Vietnamese officials have begun shipping on the Mekong River under a new agreement both sides hope will help cut costs and time for moving goods between Ho Chi Minh City and Phnom Penh, thus strengthening economic ties between the two countries.

There has been an agreement on shipping of goods between the two cities on the Mekong since 1998, but the new deal eliminates customs taxes—and bureaucratic delays—on Phnom Penh-bound goods shipped through Vietnam, Phnom Penh Port Director-General Hei Bavy said. The countries ministries of commerce reached the agreement in September.

Many countries ship to Cam­bodia through Vietnam to save time. Shipping goods from Japan, Korea and other countries to eastern Cambodia is 12 hours faster when going through Viet­nam than when going through Sihanoukville, Hei Bavy said.

Goods shipped through Ho Chi Minh City are taken up the Mekong River to Phnom Penh. Under the old trade agreement, Vietnamese authorities placed tariffs upon and inspected those goods, Hei Bavy said. As a result, the goods were delayed and their prices increased.

According to at least one estimate, the new agreement cuts transport time in half and costs by two-thirds.

Vietnam has three transfer points for Cambodian trade. Two belong to the Ministry of Public Works of Vietnam, and the third belongs to Ho Chi Minh City. The deal allows shippers to dock at any of those ports en route to Cambodia, Hei Bavy said.

“Cambodia and Vietnam have had an agreement for Mekong River shipping since 1998, but it has not made Phnom Penh’s port busy yet,” Hei Bavy said, adding the deal should boost business.

Amid a global economic slowdown which preceeded—but has been intensified by—the Sept 11 attacks on the US, Cambodia has been trying to expand its trade.

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