Harrison White
After Prime Minister Hun Manet’s compelling speech at the 2023 Cambodia-US Business Forum in New York, the Cambodian business sector is abuzz with discussions about the promising avenues for partnerships with American companies. Speaking to CIR Leader Talks H.E. Allen Dodgson Tan, a Cambodian-American entrepreneur who has been working in Cambodia since 2010 and served as the President of the American Chamber of Commerce Cambodia from 2019 to 2020, shared his expert opinions on this subject. He is currently an Advisor to the Council for the Development of Cambodia and Group Vice President of WorldBridge Group.
Discussing the opportunities presented by Hun Manet’s pitch, Allen Dodgson Tan emphasized the alignment between the Cambodian government’s priorities and U.S. companies’ core strengths. “U.S. businesses excel at improving efficiency and quality through technology. The Royal Governments focus on human capital development and technology transfer provides a conducive environment for Cambodian companies to collaborate with U.S. firms,” Tan said.
Cambodian Companies Recognizing the Value of American Technology
He pointed out that Cambodian companies have already begun to recognize the value of American technology. As a real-world recent example, he cited SCAFCO Grain Systems silos that were installed at a rice mill in Battambang. “SCAFCO’s technology stood out, even if there were less expensive options available. In the same vein, Cambodian consumers prefer Ford trucks and cars because of their proven quality. This is a trend that other Cambodian businesses can emulate to deliver superior value to their markets,” Tan elaborated.
Reflecting on the importance of respecting business-norms, transparency and trust are paramount when dealing with U.S. companies, according to Tan. He also stressed the need for Cambodian firms to be forthright about their business challenges when engaging with American investors. “Honest dialogues about risks and challenges are always preferable to obfuscation. A clear strategy for mitigating risks can go a long way in forging a strong business relationship,” he advised.
The Prime Minister, in his opening remarks, emphasized Cambodia’s integration into global supply and value chains through a series of free trade agreements. Tan sees these agreements as advantageous platforms for Cambodian businesses. “Cambodian firms, especially those involved in manufacturing or processing for export, can pitch these trade preferences when negotiating partnerships with American companies. Given the ongoing diversification of supply chains by U.S. companies, Cambodia is well-placed to become a more significant player,” he said.
Start By Reaching Out to Existing Networks and Organizations
To effectively engage with U.S. partners, Tan recommends Cambodian companies start by reaching out to existing networks and organizations. “The American Chamber of Commerce in Cambodia is a valuable resource for Cambodian businesses looking to meet U.S. partners. The U.S. Embassys Commercial Services office is another avenue, as they assist American firms in identifying local partners,” he said. Tan also encouraged Cambodian companies to express interest in joining trade events and delegations to the United States through these organizations, as this would keep them abreast of upcoming opportunities.
As for his recent appointment as an Advisor to the Council for the Development of Cambodia, Tan said, “My role is focused on promoting Cambodia as an attractive destination for foreign investment. The Council grants investment incentives and facilitates dialogue between the private sector and the government on investment-related issues. With the new government’s proactive stance on reducing bureaucracy and business costs, Im optimistic about Cambodias future as a business hub in Southeast Asia.”
WorldBridge Group, which was a significant sponsor of the Cambodia-US Business Forum, views its participation as a steppingstone for future events. “WorldBridge has a history of forming international partnerships, including with American companies. The forum provided an unparalleled opportunity to support the new Prime Ministers message and connect with American businesses. The event exceeded expectations, garnering robust support from the US ABC and U.S. Chamber of Commerce,” Tan revealed.
United States Remains Cambodia’s Largest Export Destination
Despite the expiration of the Generalized System of Preference (GSP) trade scheme in late 2020, the United States remains Cambodia’s largest export destination. The U.S. market is crucial for Cambodia whether the GSP is renewed or not. Meanwhile, due to impacts such as the Ukraine war and inflation, Cambodia is looking to diversify its export markets for garments, footwear, and travel goods.
Trade data from the Office of the U.S. Trade Representative indicates a growing relationship between the U.S. and Cambodia. U.S. goods exports to Cambodia in 2022 amounted to $446 million, a 7% percent increase from 2021. In contrast, U.S. goods imports from Cambodia reached $12.2 billion in 2022, a significant 39% percent jump from 2021. This upward trend in trade reflects the potential for mutually beneficial partnerships between the two nations, underscored by the recent 41+ percent increase in the U.S. goods trade deficit with Cambodia, which stood at $11.8 billion in 2022.
As Cambodian businesses navigate this new era of opportunity, Cambodias increasing integration into global trade networks and the government’s focus on improving the business climate, Cambodian companies appear well-positioned to forge lasting and rewarding partnerships with U.S. investors.
