Previous remarks by Cambodian government officials stressed that the agreement focused on improving agricultural exports to China. Cambodia and China have signed a bilateral free trade agreement that has been considered a blessing for Cambodia`s agricultural exports, but has been little detailed by the Cambodian government. In his words, the agreement could be a boost for Cambodia, which last year suspended some of its particular trade preferences with the European Union, a key market for its exports, because of human rights. The Cambodian government must ensure that its free trade agreement with China is centered on the interests of the people, writes Heimkhemra Suy. China also provides about 40% of Cambodia`s foreign direct investment and holds half of Cambodia`s foreign debt worth $7 billion in 2018. When the European Union announced in February that Cambodia`s preferential trade status “Everything but Arms” (EBA) would be partially abolished with it this month, it reinforced some analysts` concerns about China`s economic influence in the country. The negotiation and signing of the China-Cambodia Free Trade Agreement is an important consensus reached by the heads of state and government of both countries. Negotiations began in January 2020. After seven months and three rounds of formal negotiations, they announced the conclusion of the negotiations on 20 July 2020. The signing of the agreement means that the two sides have entered a new era of global strategic partnership, the joint creation of a Sino-Cambodian community with a common future and “Belt and Road” cooperation. This is a new milestone in the development of bilateral economic and trade relations and will certainly take bilateral economic and trade relations to a new level. The well-being of businesses and people in both countries continues to improve. The signing of the agreement implies the entry of the two countries into a new era of a partnership of comprehensive strategic cooperation, which the Sino-Cambodian community is building with a common future, and cooperation for the joint construction of the Silk Road Economic Belt and the 21st century Maritime Silk Road.
The free trade agreement is Cambodia`s first bilateral trade agreement and was concluded in less than a year. The two governments have given very few details on the Free Trade Agreement, other than to say that it would be a bullet in the arm of the Cambodian agricultural sector and that it contains about 300 products, without the critical export of rice, which currently has an export quota of 200,000 tonnes. Other agreements include the modernization of a hospital and drainage infrastructure in the coastal city of Sihanoukville, according to the Cambodian Ministry of Foreign Affairs. According to Fresh News, China also announced an additional $140 million in aid. Cambodian politicians must do two things to make the most of this free trade agreement. First, they must encourage potential Chinese investors to contribute to local development and create local jobs. Second, key local products should be identified and supported to enable Cambodian producers to compete with Chinese companies. Cambodia will then experience not only the risks, but also the benefits of freer trade with China. The agreement, for which talks began at the end of last year, covers sectors such as trade, tourism and agriculture, where both countries will reduce tariffs on their products. The free trade agreement with China is in pursuit of EU trade sanctions. Brussels has partially suspended Cambodia`s duty-free access to the bloc due to human rights violations. The Cambodian government will also lose some tax revenue, without taxing imports of Chinese goods as a result of the free trade agreement, although free trade advocates say this loss could be offset by the benefits of increased Cambodia`s exports to China.
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