Sign up | Log in



Home  >>   Daily News  >>   Cambodia >> Economy >>TPP puts Cambodia’s trade, investment in the spotlight
NEW UPDATES Asean Affairs  8 October  2015  

TPP puts Cambodia’s trade, investment in the spotlight

The conclusion of the Trans-Pacific Partnership agreement has industry insiders in Cambodia split over whether or not the new pact will limit the Kingdom’s trade growth potential in the US market and see future investments diverted to Vietnam.

Ending a long-drawn negotiation process that lasted five years, the 12 members of the Trans-Pacific Partnership (TPP) – which includes the US, Japan, Canada and Vietnam – agreed on a framework Monday that will liberalise trade between the members and “foster inclusive development and promote innovation across the Asia-Pacific region”.

Ken Loo, secretary-general of the Garment Manufacturers Association of Cambodia, said that while the agreement was expected, it could eat into the Kingdom’s already dwindling economic competitiveness, which is plagued by rising labour costs and logistical deficiencies.

“We’re not competitive, that’s why exports to the US have been declining every year, because we’re losing market share,” he said yesterday.

According to Loo, even without the TPP in place, Cambodia is already losing market share in the US. Exports to the US accounted for only 32 per cent of total garment shipments this year, compared with 50 per cent three years ago.

The TPP will eliminate most tariffs in the textiles and apparel segment, save a few sensitive products where tariffs will be eased off over a longer time frame. The end of these barriers, Loo said, could swing garment exports in favour of Vietnam and further solidify the Kingdom’s reliance on the European market, which accounted for 42 per cent of exports in 2015.

“You can see from how our export market works that we are entirely dependent on trade preferences,” Loo added.

“Trade is rising with Canada, Japan and the EU, with which we have trade preferences. It’s clear.”

Some exporters of Cambodia’s biggest agricultural crop also voiced concern over the new trade pact, suggesting it would limit their expansion into the US market.

Song Saran, CEO of Amru Rice, one of the Kingdom’s largest rice exporters, said Cambodian rice accounted for about 2 to 3 per cent of the US market last year. He said that while this represents only a small share of the market, the TPP would restrict any future growth.

“We are not affected by the signing of the TPP, as rice exports to the US are not big as compared to garments,” said Saran. “But it will be challenging to expand our market share in the US.”

Jayant Menon, lead economist at the Asian Development Bank’s office for regional integration, said Cambodia’s access to the European markets through the Generalized Scheme of Trade Preferences, a preferential system of reduced tariffs for developing countries, would mitigate the impact of the TPP on the Kingdom’s exports.

Moreover, he said, any investment diversion toward Vietnam would be in sectors that Cambodia was not currently competing in, such as auto parts manufacturing.

Given Prime Minister Hun Sen’s repeated requests to join the trade agreement, Menon said it would be sensible to consolidate the trade preferences the Kingdom currently enjoys, rather than push to join the TPP.

“Right now, Cambodia should focus on its commitments to the ASEAN Economic Community, Regional Comprehensive Economic Partnership and the WTO, and should only consider joining the TPP once it becomes clearer what shape it is likely to really take – this could be years away,” he said.

As Cambodia deals with increased price pressures from Vietnam in rice and garment exports, Hanoi will enjoy incentives not only from the TPP, but also its tax-free rice exports to the EU, one of Cambodia’s major export destinations, said David Van, representative for business advisory firm Bower Group Asia.

According to Van, the combined effect of the TPP and the recent conclusion of negotiations on the EU-Vietnam Free Trade Agreement could result in a “hollowing of the Cambodia economy”.

“TPP and EU-VN FTA could also trigger a financial crisis within Cambodia as FDI could dry up and move to Vietnam, resulting in substantial losses in jobs and businesses,” he said.

The TPP must still be ratified by lawmakers in its signatory nations before it can come into effect, and is likely to face a battle when it is submitted to the US Congress early next year.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories                           October 8 , 2015 Subsribe Now !
• VN, Indonesia forge stronger connections Subcribe: Asean Affairs Global Magazine
• TPP puts Cambodia’s trade, investment in the spotlight 
• Laos, Thai, Msia & Singapore power deal delayed 
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

• Singapore asks Indonesia to name firms suspected of contributing to haze-causing fires
• AirAsia sounding out investors to take company private
Asean Analysis                   September 24, 2015
• Asean Analysis September 24, 2015
Advertise Your Brand

Asean Stock Watch  October 7,   2015
• Asean Stock Watch-October 7, 2015
The Biweekly Update
• The Biweekly Update September 18, 2015

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand