South Korea and Cambodia have signed a free trade agreement. This 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 agreement is expected to boost trade between the two countries with South Korea agreeing to remove tariffs on 95 per cent of products imported from Cambodia while Cambodia will eliminate duties on 93 per cent of goods imported from South Korea.
Cambodia-South Korea bilateral trade was valued at $885 million in 2020 and grew by nine per cent 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.
South Korea has a great demand for high-value winter clothing and denim. Other potential products that have good demand in the country include non-leather footwear, home textiles, jute and jute products etc. The biggest markets for Cambodian garments are, in order, the US, EU, Japan, Canada and the UK.