Bilateral trade between Japan and Cambodia fell by 7.42 percent to $1.346 billion from January to August 2020, compared with the same period in 2019, according to statistics released by the Japan External Trade Organisation (JETRO).
Cambodia’s exports to Japan dropped by 5.3 percent, valued at $1.045billion in the first eight months of 2020, while imports from Japan fell 14.2 percent compared with the same period in 2019.
According to the Ministry of Commerce, the potential products for export from Cambodia to Japan are apparels, footwear and electronics. JETRO said that Japan imported commodities and products from around the world, mostly food stuff, raw materials (wood, soy beans), mineral fuels (petroleum, LNG, LPG), manufactured goods (textile, yarn, and fabrics), electrical machinery, clothing, accessories and others.
Undersecretary of State and spokesperson at the Ministry of Commerce Penn Sovicheat said that during the COVID-19 pandemic, the export of Cambodian products has dropped except for milled rice exports and some other agricultural produces. He said Cambodia saw a fall in all market export destinations.
“Cambodia has yet to have a free trade agreement with Japan, but said the ministry is preparing to study a FTA between the two nations,” Sovicheat added. The two-way trade between Cambodia-Japan rose by 13 percent to $2.292 billion last year.
Hiroshi Uematsu CEO of PPSEZ, said that in the first half of this year, the exports from PPSEZ recorded a 5 percent increase compared with last year. He added that July’s export value hit the highest thus far this year.
“We export automobile parts, diamond, electric and electronics, garment, shoes, metal, plastic products, etc. to Japan, USA, Thailand, Vietnam, China, EU, etc.” Uematsu said.
He added that now Sumi Cambodia Wiring Systems has doubled its production with over 4,000 workers this year. “They are producing wire harness for the Japanese market. So, I foresee that exports to Japan is set to increase by the end of this year,” said Uematsu.
Last month, foreign investors have asked the Cambodian government to reduce the cost of certificate of origin (CO), which is currently far more expensive than other countries in Asean.
The certificate of origin is an official document used to certify that a product was wholly produced or manufactured in a country. It is generally a key document required by buyers and applies to individual products.
The suggestion was made by the Japanese Business Association of Cambodia (JBAC) in its 2020-2021 policy recommendation submitted to the government, saying that an application fee for a CO in Cambodia is more expensive than other Asean members, costing up to $58.
JBAC said in Vietnam a CO is free of charge regardless of whether it is subject to a tariff or not while in Thailand, there are three types of applications and the fee is $24.50. In Singapore it is around $7. In Malaysia it is $2.39 and in Japan it is $10.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.