Vietnam and Cambodia agree to expand trade ties

Photo source:Zing

During Cambodian Prime Minister Hun Sen’s official visit to Vietnam during December 20-21, both countries’ leaders agreed to assign theVietnamese Ministry of Industry and Trade and Cambodian Ministry of Commerce to finalise the Vietnam-Cambodia Border Trade Agreement, which will help facilitate investment and trade flows.

In late October 2016, the two ministries also signed an agreement on stepping up bilateral trade.

Previously, it was expected that the two-way trade turnover would reach $5 billion in 2015. Nevertheless, due to both countries’ difficulties, the figure turned out to be only $3.37 billion—up merely 2 per cent year-on-year.

In the first 10 months of the year, the turnover hit almost $2.4 billion, down 14.3 per cent year-on-year. Of this, Vietnam raked in $1.8 billion from exports to Cambodia, down 11.4 per cent, and import turnover from Cambodia was $586 million, down 22.3 per cent year-on-year.

According to the Vietnamese Ministry of Foreign Affairs, the two-way trade turnover for this year is forecast to be even lower than last year’s $3.37 billion.

Prime Minister Nguyen Xuan Phuc suggested that the two countries further boost their transport and electricity connectivity, tourism, telecommunications, and banking within the framework of a master plan to connect the Cambodian, Lao, and Vietnamese economies.

Notably, the two ministries will negotiate a government-level agreement on transport co-operation and another to build a highway connecting Ho Chi Minh City and Phnom Penh, which is expected to be inked next year.

The two ministries will also conduct a survey on the two countries’ “One door-one stop” model, which is expected to be launched at the Moc Bai–Ba Vet border gate.

Leaders on both sides also agreed to further facilitate high-level visits by leaders and officials from ministries, agencies, localities, and trade unions, while working closely together to effectively implement already-clinched deals.

Also during this visit, the two sides signed an agreement on judicial assistance in criminal matters between the two governments, an agreement on the transferring of sentenced persons between the two countries (extradition?), and another between the Vietnamese Committee for Ethnic Minority Affairs and the Cambodian Ministry of Cults and Religion.

Currently, Vietnam is Cambodia’s fifth biggest foreign investor (after China, South Korea, the EU, and Malaysia), with 183 valid investment projects registered at $2.86 billion.

Vietnamese investors began speeding up investments in Cambodia in 2008. However, due to land-related impediments, many of them have found it difficult to expand investment capital. They mostly focused on the fields of rubber plantation, telecommunications, services, and banking.

Cambodia currently has 12 valid investment projects in Vietnam, registered at over $54 million.