CKFTA offers opportunities for Cambodia's downstream processing sector

In that model, South Korean companies could expand their supply chain network developed in not only China but also Vietnam or Thailand, it said.

CKFTA was signed into law in Cambodia in January and is expected to be ratified by June this year.

The CKFTA should boost bilateral trade with South Korea agreeing to remove tariffs on 95.6 per cent of products imported from Cambodia while the latter will eliminate duties on 93.8 per cent of imported goods.

Cambodia-South Korea bilateral trade was valued at $885 million in 2020 and grew by 9 per cent to $965 million in 2021 (bilateral trade had reached over $1 billion before the pandemic).

Further, Cambodia imported over $600 million from South Korea in 2021 while exports reached $341 million to the East Asian nation.

Meanwhile, CKFTA falls under South Korea’s ‘New Southern Policy’, considered to be Seoul’s first unified diplomatic initiative and aims to advance relations with India and the Association of Southeast Asian Nations (ASEAN).

In addition to increasing trade, Cambodia is hoping South Korean firms can help diversify its economy away from its mainstays of garment and textile manufacturing and tourism, ASEAN Briefing said.

Garment and textile manufacturing make up some 80 per cent of Cambodia’s exports, contributes to 30 per cent of its gross domestic product (GDP) and employs over 800,000 workers nationwide.

There are more than 300 South Korean manufacturing firms in Cambodia that are mostly operating in the light manufacturing industry, producing goods such as clothing, footwear, travel bags and footwear.

Fibre2Fashion News Desk (DS)