Russia And Cambodia To Increase & Develop Bilateral Trade
Bilateral trade at US$220 million leaves plenty of room for development with an EAEU free trade agreement on the horizon
Cambodia and Russia have agreed to boost bilateral cooperation on trade and investment, as the two countries mark the 65-year anniversary of the establishment of diplomatic relations.
The first Russian Online Business Mission to Cambodia was held on July 30, and was presided over by Nhim Khemera, the Cambodian Secretary of State, Ministry of Foreign Affairs and International Cooperation. It was also attended by Kith Meng, President of the Cambodia Chamber of Commerce (CCC).
About 250 participants attended, including businessmen and investors from both countries and representatives from relevant ministries and institutions.
The discussions focused on sectors including IT, cybersecurity, digital technology, industry, and energy.
Businessmen from both countries explored opportunities to collaborate in strengthening bilateral cooperation and promoting joint projects. The two countries have reached many cooperation agreements from trade to energy. Recently, Cambodia and Russia signed an agreement on a nuclear power project.
Russia has also helped Cambodia on its application to proceed with a free trade agreement with the Eurasian Economic Union (EAEU).
According to the Russian Federal Customs Service, exports to Russia from Cambodia last year totaled more than US$200 million, while goods moving from Russia to Cambodia amounted to nearly US$20 million.
Cambodia exports mainly footwear and garments, and some agricultural products, and rubber to Russia, while Russia exports mainly vehicles and some pharmaceuticals. Cambodia is seen by some investors as a less expensive alternative to Vietnam and Thailand and is also developing as a preferred destination for Russian tourists. It lies between Thailand and Vietnam and has a coastline to the South China Sea. Sihanoukville is the main deep-sea port.
The country is a member of the ASEAN trade bloc, which also includes significant Asian markets for Russian goods in Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam. ASEAN also has free trade agreements with China and India and will benefit from the upcoming RCEP agreement that will also include, when ratified, Australia, New Zealand, Japan, and South Korea. RCEP is expected to be in force by 1st January 2022 – just five months from now. There are distinct advantages for Russian investors in looking at countries such as Cambodia for low-cost manufacturing units with an eye for re-exporting back to the EAEU or onto other markets in ASEAN and RCEP.
Maria Kotova at Dezan Shira & Associates can advise on a Russian strategy for developing South-East Asian trade. Contact: firstname.lastname@example.org
Russia Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Eurasia, including China, Russia, India, and the ASEAN nations, assisting foreign investors into the Eurasian region. Please contact Maria Kotova at email@example.com for Russian investment advisory or assistance with market intelligence, legal, tax and compliance issues throughout Asia.