According to a Ministry of Commerce statement, Cambodia and Switzerland have pledged to strengthen trade relations and consider establishing a bilateral free trade agreement (FTA) as import-export flows between the two countries reach $1.4 billion in 2022.
The commitment was made on the sidelines of the “Davos” summit on January 19 during a working meeting on Cambodia-Switzerland economic cooperation between commerce minister Pan Sorasak and Helene Budliger Artieda, chief of Switzerland’s State Secretariat for Economic Affairs (SECO).
Since diplomatic relations were established in 1963, two-way trade between the two countries has consistently been in positive growth territory, according to the minister.
According to the commerce ministry, Cambodian-Swiss merchandise trade volume reached $1.445 billion last year, up 48.32 percent from $974.280 million in 2021, which was up 156.98 percent from $379.128 million in 2020. Customs confirmed all but the 2021 figure, which was slightly lower at $974.279 million.
Sorasak suggested considering a bilateral FTA to support positive developments in trade cooperation between the two countries and governments.
An FTA is an international treaty between two or more economies that aims to reduce or eliminate certain barriers to imports and exports while also protecting safety, security, health, and other legitimate regulatory goals. A pact of this type can also help to facilitate and promote stronger economic ties among signatories in areas such as investment and intellectual property protection.
The minister also thanked the Swiss government for its assistance and development programs in areas such as good governance, agriculture, food security, job training, and others.
Budliger Artieda welcomed the initiative, stating that the Swiss government has been and continues to support Cambodia’s transition and economic development efforts.
She expressed her commitment to strengthening bilateral ties and expanding cooperation in priority areas, including through international frameworks.
According to Commerce Ministry figures, Cambodian merchandise exports to and imports from Switzerland totaled $9.275 million and $1.436 billion, respectively, down 10.52 percent and up 48.95 percent year on year, expanding the Kingdom’s trade deficit with the landlocked Central European country by 49.60 percent to $1.427 billion.
Lim Heng, vice president of the Cambodia Chamber of Commerce (CCC), welcomed the meeting’s commitments, particularly the part about a potential FTA.
On January 24, Heng told The Post that the number of Swiss companies operating in Cambodia is still limited, but that more FTAs would improve access for Cambodian goods to more markets, attract new investors, and create more local jobs.
He reaffirmed the private sector’s unwavering support for entering into FTAs with new markets, which he said could provide a buffer for the Kingdom if it loses preferential tariff preferences under the EU’s “Everything But Arms” (EBA) trade scheme and similar regimes.
Many preferential trade agreements offered by a variety of jurisdictions exclusively grant duty- and quota-free access to the least developed countries (LDC), a grouping that Cambodia would need to leave in order to achieve its ambitious vision of becoming a “upper-middle income” economy by 2030 and a “high-income” economy by 2050.
“We expect these agreements to provide a leg-up in lieu of these preferential trade regimes, to drive economic growth in Cambodia through imports and exports,” Heng said, stressing that the CCC will be on stand-by to offer input in any FTA talks.
He also voiced appreciation to the Swiss government for its technical assistance, human resource training, and other “significant contributions” to Cambodia’s development.
Hong Vanak, director of international economics at the Royal Academy of Cambodia, stated that Switzerland, as a strong trading power and prosperous European economy with a large potential market, provides plenty of trade opportunities for Cambodia.
Given its proximity to and relations with the EU and other European markets, he believes an FTA with Switzerland would boost regional exports of garments and other textile-related items, bicycles, and agricultural products.
“Additionally, closer cooperation with Switzerland would be like improved cooperation with the EU, capturing the interest of investors from other countries in the Cambodian market,” Vanak added.
According to an unnamed commerce ministry official, Cambodia exports textiles, precious stones, and agricultural products to Switzerland while importing pharmaceuticals and machinery.
Nestle, the Swiss confectionery giant, has also announced plans to invest in Cambodia and establish a presence there in the “near future,” a move widely praised by local dairy farmers as a means of supporting the Kingdom’s fresh milk market.
On June 16, Sorasak paid a visit to the Nestle headquarters in Vevey, Switzerland, where a representative confirmed that the company was looking for more opportunities in Cambodia.
Source : phnompenhpost