China, Cambodia sign free trade pact, to slash tariffs
China and Cambodia signed a free trade agreement on Monday, put together in under a year and aimed at slashing tariffs and boosting market access between Beijing and one of its most important Asian allies.
The agreement, for which talks started late last year, covers sectors that include trade, tourism and agriculture, under which both countries will cut duties for their products.
Details of the agreement were not released, but Cambodian commerce ministry spokesperson Seang Thay said China would give tariff-free status covering about 98 percent of its imports from Cambodia, while up to 90 percent of China’s exports to Cambodia would be exempt from tariffs. The Cambodian exports that are covered are mostly agricultural. China is Cambodia’s main market for rice, mangoes and bananas.
The signing was attended by the Chinese government’s top diplomat, State Councillor Wang Yi and Cambodian Prime Minister Hun Sen at a ceremony streamed online.
“The signing of the agreement signifies even stronger ties between the two countries and marks another key historical milestone for Cambodia China relations,” Cambodia’s Commerce Minister, Pan Sorasak, told the ceremony.
The agreement, which he said he hoped would come into effect early next year, “would provide a more robust economic partnerships through a higher degree of market access, liberalization for goods, services and investment,” he said.
Hun Sen spoke highly of the agreement, saying that it is of great significance economically and politically. He believes that through friendly cooperation between the two countries, Cambodia’s development will get better.
Wang Yi said that the signing has sent a strong signal and it will help Cambodia address challenges brought by the COVID-19 pandemic and will promote the socioeconomic development in the Southeast Asian nation.
The China-Cambodia deal is the first-ever bilateral free trade agreement for Cambodia.
Depending on its terms, the deal could be a boost for Cambodia, which suffered the suspension last year of part of its special trade preferences with the European Union, a key market for its exports.
That included reimposing tariffs on certain garments and footwear, which are central to manufacturing jobs and its economy.
Cambodia is the first leg of Wang’s visits to Southeast Asia. He will also make visits this week to Malaysia, Laos and Thailand, along with a transit visit to Singapore. On Sunday, Wang met with Cambodian Deputy Prime Minister Hor Namhong on further developing bilateral relations.
Wang said despite COVID-19, bilateral friendship has been lifted to a higher level after the concerted fight against the pandemic. China stands ready to further consolidate political trust and enhance mutual support, to jointly chart the course and promote development of bilateral ties in the post-pandemic era. He added that in addition to traditional areas, both sides should explore new cooperation in emerging fields like AI, 5G, big data, cloud computing, etc, to cultivate new growth points.
Cambodia has made significant achievement with China’s strong support, said Namhong, adding that it wants to cooperate with China on coronavirus vaccine and establishing fast-track and green-channel for personnel and logistics to contribute to the socio-economic development in both countries. Cambodia is willing to work with China to implement the plan of action for building the Cambodia-China community of shared future, lifting the bilateral ties to a higher level, said Namhong.