Trade with RCEP’s member states up one-tenth on-year

Content image - Phnom Penh Post
A cargo ship travels along the Mekong River near the Phnom Penh Autonomous Port’s LM17 container terminal in Kandal province’s Kien Svay district. Heng Chivoan

Cambodia's trade value with the other 14 members of the Regional Economic Comprehensive Economic Partnership (RCEP) topped $24 billion in the first nine months of 2022, marking a roughly one-tenth year-on-year increase, according to commerce ministry data.

The RCEP is the world’s largest free trade agreement, involving the 10 ASEAN countries of Cambodia, Brunei, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, as well as five additional Asia-Pacific nations: Australia, China, Japan, New Zealand and South Korea.

 

The pact kicked in on January 1 in 10 out of 15 countries, including Cambodia, and has since taken effect in all signatory states, except for Myanmar and the Philippines.

Figures posted by the Ministry of Commerce show that, in the January-September period, Cambodian exports to and imports from the other 14 RCEP member states each topped $4.7 billion and $19.6 billion, respectively, marking six per cent and 12 per cent increases year-on-year.

By comparison, General Department of Customs and Excise data show that Cambodian exports to and imports from the top nine RCEP trading partners reached $4.648 billion and $19.105 billion during the period, respectively, up 6.23 per cent and 11.62 per cent year-on-year.

These trading partners are, in order by trade volume, mainland China, Vietnam, Thailand, Singapore, Japan, Indonesia, South Korea, Malaysia and Australia.

Royal Academy of Cambodia economics researcher Ky Sereyvath described the RCEP as a fresh burst of momentum for the Kingdom’s regional export diversification drive, and a fertile source of opportunities to attract more investment inflows.

“With the RCEP, Cambodia has gained magnificent opportunities to not only step up exports of goods at competitive prices thanks to the tariff-free treatment, but at the same time, we have a chance to import products at more affordable rates to supply the domestic market and counteract the rising inflation, for the people,” he told The Post on November 23.

 

“Moreover, the agreement will also open door for Cambodia to welcome investment flows, but that’ll require us to properly prepare skilled labour and a sound tax system, as well as to build a level playing field for fair market competition,” Sereyvath added.

On November 2, Prime Minister Hun Sen lauded the RCEP as “an important mechanism and a strategy that demonstrates our unwavering commitment to safeguarding the rules-based multilateral free trade system, maintaining economic openness and upholding a spirit of cooperation”.

The premier was speaking at a High-Level Forum at the 10th-Anniversary of the RCEP Agreement that was organised by the Jakarta-based Economic Research Institute for ASEAN and East Asia (ERIA).

Citing figures by “major international institutions” to illustrate the sheer scale of the RCEP, Hun Sen told the forum that “a full-pledged implementation” of the deal “will boost trade volume by approximately $40 billion, increase real income by up to 2.5 per cent [and drive up] trade activities amongst RCEP members by 12.3 per cent.

“[It will also lift] an additional 27 million people into the middle class … by 2035 [and by estimates], increase global incomes by up to $263 billion.

“A study by ERIA in early 2022 shows that Cambodia’s gross domestic product [GDP] could rise by around two-to-3.8 per cent, exports would grow between 9.4 and 18 per cent, job opportunities would increase by 3.2-6.2 per cent annually, and tax revenue could increase by two-to-3.9 per cent, [while] overall investment could increase by around 23.4 per cent,” he said.