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The second round of formal negotiations on the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA) concluded on December 21, further boosting confidence in the bilateral treaty’s strengthening impact on Cambodia’s economic growth.
The three-day follow-up talks, held in Phnom Penh, come nearly two months after the first round of talks, which took place in the UAE capital Abu Dhabi on December 19-21.
CEPA is a free trade agreement (FTA) that is generally designed to cover a broader scope beyond goods, and can include services, investment, dispute settlement, intellectual property rights, government procurement and other forms of specialized economic cooperation.
The Cambodian negotiating team is led by Tek Reth Kamrong, Secretary of State at the Ministry of Commerce, while the UAE is led by Juma al-Kait, Assistant Undersecretary for Foreign Trade at the UAE Ministry of Economy.
In a statement, the Commerce Department confirmed that recent talks had ironed out several points of disagreement to help ensure CEPA’s comprehensive, long-term and flexible framework to better build common ground and interests.
It noted that progress has been made in provisions on key areas of sustainable and inclusive socio-economic development, such as: trade in goods and services; investment; tourism; finance; agriculture; e-commerce; education; industry; dynamism; and technology.
Reth Kamrong and al-Kait said the second round of negotiations was generally “smooth” and “efficient”, based on common and complementary interests and in line with international trade rules, with a “pleasant” outcome, the statement said.
Both teams are confident that the agreement will significantly strengthen bilateral cooperation, strengthen friendly relations between the two countries, and improve connectivity, especially between ASEAN and the Middle East, adding that the third round of talks will be held in the UAE next year.
In late October, Commerce Department spokeswoman Penn Sovicheat told the Post that CEPA negotiations were expected to conclude in 2023.
Meanwhile, Ky Sereyvath, an economics researcher at the Royal Academy of Cambodia, emphasized in an interview with The Post on Dec. 22 that the UAE’s high-income status and lack of agricultural production highlighted the potential of signing CEPA with the alliance of seven emirates for the Cambodian economy. .
Citing an example, he drew attention to the fact that the UAE economy relies heavily on revenues from oil and gas, services and tourism.
“The United Arab Emirates is a rich country and when this trade agreement comes into effect, it will bring huge benefits to Cambodia. This is a great opportunity for Cambodian agricultural exports,” he claimed.
While acknowledging that he was not aware of the specific oil and gas issues discussed in the CEPA talks, Sereyvath suggested that the Kingdom could benefit from imports and investment from UAE players in the sector, arguing that the UAE is a major oil producer and exporter and a member OPEC (Organization of Petroleum Exporting Countries).
Lim Heng, vice-chairman of the Cambodian Chamber of Commerce (CCC), commented that the agreement could bring investors to the local oil, gas and energy market and stimulate exports to the UAE and other Arab countries, many of which he noted are closer to the UK than Europe or America.
“I am optimistic that access to the UAE market will boost Cambodia’s exports, especially of agricultural products, which the Arab world produces very little, even though Cambodia’s production is increasing every year,” he said.
For reference, preliminary data on exporters’ invoices released by the Cambodian Ministry of Agriculture, Forestry and Fisheries shows that in the first 10 months of this year, Cambodia’s agricultural export revenue was close to US$3.07 billion.
Commerce Department spokesman Sovicheat could not be reached for comment by press time.
However, in a previous interview with The Post, he claimed that the bilateral CEPA would liberalize trade to a greater extent than Cambodia’s free trade agreements with China and South Korea, which came into effect this year.
The agreement will also highlight opportunities for cooperation in oil, mineral resources, meat production and agriculture, among other important areas, he said, noting that the UAE has signed CEPA with India, Israel and Indonesia.
He added that the kingdom was still exploring the “huge” export potential of agricultural products, textile-related products and general components to the UAE and across the Middle East.
“We hope that this agreement will incentivize players from Middle Eastern countries to invest in Cambodian manufacturing to export there. With all the agreements between them, accessing the UAE market is like opening the door to export to regional countries,” Sovicheat said.
In the first eight months of 2022, total trade between the two countries reached $279 million, up 40 percent year-on-year, according to the Ministry of Commerce. Despite the Covid-19 crisis, Cambodia-UAE trade volume increased by 52.66% to US$151.547 million in 2021 from US$99.271 million in 2020.
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