Cambodia’s Foreign Minister (FM) has lead a delegation to South Korea to discuss bilateral cooperation as the formal signing of the Cambodia-South Korea Free Trade Agreement (CKFTA) should be inked by end of October, according to the ambassador.
The CKFTA signing was scheduled for mid-year but was postponed due to COVID 19. Park Heung-kyeong, Cambodia’s ambassador to South Korea told Cambodia Investment Review at the official groundbreaking ceremony between KOICA and RUPP on Friday, “I expect we will sign the agreement later this year around October.”
He added, “After the deal has been formalized, I expect we will have more trade between our two countries.”
FM Prak Sokhonn has lead a delegation to pay an official visit to South Korea at the invitation of the Republic of Korea’s foreign minister Chung Eui-yong, according to a ministry statement.
“Minister Prak Sokhonn will hold official talks with minister Chung Eui-yong during which matters of bilateral cooperation such as political and defense, development, economic, science and technology, will be discussed to further strengthen and expand the existing good relations between the two countries. Views on regional and international issues of common interests will also be exchanged.”
The meeting will also be participated by foreign ministers of the lower Mekong countries of Laos, Myanmar, Thailand and Vietnam, via video conference.
South Korea has been implementing what it calls a “New Southern Policy” for the region similar to US Lower Mekong Initiative and the Japan-Mekong Cooperation. The initiative has been designed to offer Mekong countries alternative sources of investment to China’s Belt and Road Initiative and Lancang-Mekong Cooperation.
S. Korea has been wanting to expand trade ties with emerging nations – such as Cambodia – and reduce its economic reliance on China and the United States, which accounts for around 40% of its overall annual exports.
The CKFTA is hoped to increase S. Korean investment in Cambodia. When formalized it will be the second bilateral trade deal Cambodia has signed after the China-Cambodia Free Trade Deal (CCFTA).
In 2020, Korea was the eighth largest export market for Cambodian goods, after the US, Japan, China, the UK, Canada, Thailand and Vietnam.
Cambodian exports to South Korea include garments and textiles, footwear, travel bags, spare parts, electronic equipment, rubber and agricultural products. South Korea exports automobiles, electronics, appliances, beverages, pharmaceuticals and plastic products.
Major exports include beverages, textiles and cargo trucks. South Korea mostly imports clothes and shoes from the Southeast Asian nation.
According to Korea Trade Organization, Cambodia-South Korea trade was $884.88 million in 2020, down from $1.03 billion in 2019. Cambodia exported more than $317 million of goods to South Korea in 2020, which was down by 5.4% year-on-year and imported over $567 million, down 18.6% over 2019.