Foreign Trade in Cambodia During Pandemic

As a result of Cambodia's rapid economic development, both exports and imports have increased. Apparel is the main export product, while textiles, petroleum products, and automobiles are the main imports. Despite the fact that the pandemic has harmed overall manufacturing exports, exports of bicycles, electrical components, and vehicle parts and accessories are growing, and exports of rice and other agricultural commodities have increased. Domestic visitors have contributed to the travel and tourism industry's partial recovery. Foreign direct investment in non-garment industries and agriculture has increased in recent years, owing to Free Trade Agreements.

Another field where the kingdom is relying on better trading relations to help it recover is through the new free trade agreements (FTAs) it has signed or is negotiating.

The China-Cambodia Free Trade Agreement, Cambodia's first bilateral trade agreement, is set to go into effect in early 2021. Cambodia's main trading partner, China, accounts for 23.6 percent of the country's overall trade in 2019. The agreement covers approximately 300 goods and will aid Cambodia's agriculture, agro-processing, and manufacturing sectors in becoming more competitive in the Chinese market.

Then there's the forthcoming Cambodia-South Korea Free Trade Agreement, which is nearing completion. Garments, boots, travel goods, rubber, drugs, agricultural products, and electronic equipment components are expected to benefit as a result of this.

On a regional level, the newly formed Regional Comprehensive Trade Partnership (RCEP), which will build the world's largest trading bloc, is expected to significantly improve Asian economic trust.

Dr Deborah Elms, Founder and Executive Director of the Asian Trade Center, said, "RCEP will enable Cambodian products to be sent to around 15 countries, creating significant opportunities for garments, footwear, and agricultural products in major markets such as China, South Korea, Japan, and Australia."

“While Cambodia has access to these markets through ASEAN agreements, the RCEP should make it easier to use and allow for greater integration across Asia,” she added.

According to the World Bank, only signing the agreement would increase Cambodia's exports to China by 23%.