South Korea’s National Assembly recently ratified a free trade agreement (FTA), rounding off the final domestic procedure essential for the implementation of the FTA signed in October last year. The FTA, signed into law in Cambodia in January this year and ratified in June, is expected to boost Cambodian exports of garments, textiles, and footwear to South Korea.
The agreement also presents opportunities for value-added investments in Cambodia’s downstream processing industries through a ‘plus one business model’, in which South Korean companies could expand their supply chain network developed in not only China but also Vietnam or Thailand.
The Cambodia-Korea Free Trade Agreement is expected to boost trade between the two countries with South Korea agreeing to remove tariffs on 95.6% of products imported from Cambodia, while Cambodia will eliminate duties on 93.8% of imported goods, according to media reports from South Korea.
Cambodia-South Korea bilateral trade was valued at $885 million in 2020 and grew by 9% to $965 million in 2021.
Further, Cambodia imported goods worth over $600 million from South Korea in 2021 while exports reached $341 million to the East Asian nation.
The National Assembly also ratified an FTA with Israel, signed in May last year. South Korea is the first Asian nation to have an FTA with the Middle Eastern nation.