Freight activities at Sinhanoukville Autonomous Port in April. Hong Menea
Trade between Cambodia and the UK, particularly the former’s exports, is projected to rise following the introduction of the latter’s Developing Countries Trading Scheme (DCTS). This comes even as trade between the two kingdoms fell by over 14 per cent to approximately $589 million in the first eight months of 2023.
The Ministry of Commerce said on October 3 that DCTS has been initiated to replace the former Generalized Scheme of Preference (GSP) with an aim to foster sustainable economic growth in developing countries like Cambodia.
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Recent figures from the General Department of Customs and Excise (GECE) show that in the January-August period, Cambodia-UK trade was valued at $588.91 million, marking a 14.3 per cent decline from $687 million during the same interval in 2022.
Cambodian exports to the UK accounted for $527.94 million of this sum, a drop of 15.8 per cent. Conversely, UK’s exports to Cambodia increased slightly by two per cent, totalling $60.97 million. This has led to a trade surplus for Cambodia of $366.97 million.
Among Cambodia’s trading partners, the UK ranks tenth, preceded by nations including China, the US, Vietnam and Thailand.
Hong Vanak, an economic researcher at the Royal Academy of Cambodia, told The Post on October 5 that the UK’s preferential treatment to countries like Cambodia is pivotal for bolstering exports to the UK. He noted that it is also possible for some Cambodian products to find their way into other European markets through this avenue.
He emphasised the need for the country to diversify its product range and elevate quality to meet consumer demands.
“While preferential tariffs enhance price competitiveness, quality remains a crucial aspect of competition,” he added.
Vanak said Cambodia’s improved production capacity, especially in agriculture, presents a prime opportunity to elevate its exports. He attributed the recent slump in exports to the global economic downturn, exacerbated by the Russia-Ukraine conflict.
Lim Heng, vice-president of the Cambodia Chamber of Commerce (CCC), attributed the decrease to waning orders from the UK amid a global economic crisis, which has compelled consumers to curb spending. Heng is optimistic about Cambodia’s export potential, especially given its robust production chain.
“With sustained international demand, including from the UK, I believe Cambodia’s international trade volume will surge. I am hopeful that by 2024, Cambodia’s export processing capabilities will further enhance,” he stated.
Most of the goods Cambodia exports to the UK include garments, shoes, bags, bicycles and agricultural produce. In contrast, UK shipments to Cambodia mostly include automobiles, machinery and electronic equipment.
For reference, GECE’s 2022 report highlighted a bilateral trade value with the UK of nearly $977.44 million, a significant 23.98 per cent jump from $788.65 million in 2021.
