Free Trade Agreement between the Republic of Korea and Cambodia
(Goods)
Note on the Meeting of 2
July 2024
Chair: Ambassador H.E. Salomon EHETH (Cameroon)
1.1. The 110th Session of the Committee on Regional Trade
Agreements (hereinafter "CRTA" or the "Committee") was
convened in Airgram _WTO/AIR/RTA/36/Rev.1 dated
21 June 2024.
1.2. Under Agenda Item 7.3, the CRTA considered the Agreement
establishing a Free Trade Agreement
between the Republic of Korea and Cambodia, goods, (hereinafter
"the Agreement"). The Chair stated that the Factual
Presentation had been prepared by the Secretariat on its own responsibility in
full consultation with the Parties, in accordance with paragraph 7(b) of the
Transparency Mechanism for Regional Trade Agreements (document _WT/L/671).
1.3. The Agreement had entered into force on 1 December 2022. It had
been notified to the WTO by the Parties on 21 June 2023 under Article XXIV:7(a) as an agreement
establishing a free trade area for trade in goods, within the meaning of
Article XXIV of the GATT 1994, (document _WT/REG470/N/1). The text of the Agreement, together with its
Annexes, was available on the Parties' official websites and in the WTO RTA
database. The Factual Presentation, document _WT/REG470/1, and questions and
replies, document _WT/REG470/2, had been distributed.
1.4. The representative of the Republic of Korea was honoured to
present the Agreement in the CRTA. The Republic of Korea saw great value in the
Transparency Mechanism of the CRTA. The process kept members informed of the
latest developments in other Members' RTAs and provided opportunities for a
deeper understanding of them. In this regard, she hoped that the session would
help WTO Members to better understand the Agreement.
1.5. Like other FTAs signed by Korea, the Agreement was consistent with
the principles and rules of the WTO. It met the requirements stipulated by
Article XXIV of GATT 1994 that duties and other restrictive regulations of
commerce should be eliminated on substantially all the trade. The Agreement has
been built upon and had gone further than the two countries' WTO commitments in
trade in goods. However, commitments in trade in services and investment had
not been included in the Agreement. Korea and Cambodia would discuss to
initiate negotiations on trade in services and investment in due course.
1.6. Cambodia continued to sustain remarkable economic growth among ASEAN
countries, leveraging its young and excellent human resources. Korea, having
continued to expand its free trade agreement network with ASEAN countries,
expected that the bilateral free trade agreement with Cambodia could help to
diversify its supply chains to Cambodia in the process of reorganizing its
regional value chains due to the COVID pandemic. Korea had envisioned the creation
of value chains between the two countries in various fields including textiles
and automobiles, strengthened through tariff elimination benefits.
1.7. Against this background, FTA negotiations were launched in July 2020
and concluded after the 4th round of negotiations in February 2021. The
Agreement had been signed in October 2021 and had entered into force on 1
December 2022. It had become Korea's fourth bilateral free trade agreement with
ASEAN countries following those with Singapore, Vietnam and Indonesia.
1.8. She briefly highlighted the features of the FTA between Korea and
Cambodia. A significant share of tariff lines and trade had already been
liberalized under the Korea-ASEAN Free Trade Agreement which had been in force
since 2007 and the Regional Comprehensive Economic Partnership (RCEP), in force
since early 2022. However, both Parties had had common interest in additionally
liberalizing trade in goods and elevating economic cooperation through the
bilateral FTA. With the Agreement, Korea's final customs elimination rate had
become 95.6% of its tariff lines and 95.7% of imports, and Cambodia 93.8% of
its tariff lines and 72.2% of imports. Tariff liberalization was to be
completed in annual stages within 20 years from entry into force of the
Agreement.
1.9. Looking at the product composition of bilateral goods trade,
vehicles and textiles accounted for almost 45% of Korea's exports to Cambodia.
In case of Cambodia, 50% of its exports to Korea were textiles. The Agreement
would deliver new business opportunities for enterprises producing the products
with eliminated tariff rates. Some of the products such as automobiles, textiles
and apparel, and fresh fruits enjoyed immediate tariff elimination. Trade
between Korea and Cambodia was mutually complementary and the Agreement would
boost both Parties' exports while stimulating more bilateral investment and
vitalizing both economies.
1.10. In the area of rules of origin, bilateral accumulation was permitted
by Article 3.6. In order to apply accumulation with other ASEAN members, they could
resort to the ASEAN-Korea Free Trade Agreement or the RCEP. As per Article 3.16
of the Agreement, a secure website would be established by the Parties to
display required information from the last three years. Also, an importing
Party was entitled to conduct an on-site verification for a good claiming
originating status. The Parties may also establish an Electronic Origin Data
Exchange System for the purpose of monitoring and assessing the implementation
of the rules of origin.
1.11. In the area of economic cooperation, both sides had established a
mechanism to strengthen cooperation activities including capacity building and
technical assistance. It comprised detailed provisions for closer cooperation
focusing on agriculture, forestry, and fisheries, electronic commerce,
technical regulations, standards and conformity assessment procedures, SPS,
trade and investment-related legal framework, infrastructure development,
industrial development, ICT and other matters as agreed upon between the
Parties.
1.12. Other than these, the Agreement included other commitments including
customs procedures and trade facilitation, trade remedy, transparency, and
dispute settlement.
1.13. In closing, she hoped the session had further facilitated the WTO's
Transparency Mechanism by enhancing the Members' understanding of the Agreement.
While listening to the opinions of other members, she would endeavour, where
possible, to answer any additional questions. Once again, she extended her
gratitude to all Members involved, especially to Japan for sending their
written questions ahead of the session. She also thanked the Cambodian
delegation for their close cooperation in preparing the factual presentation.
Lastly, she expressed her special appreciation to the Secretariat once again.
1.14. The representative of Cambodia thanked the Chair for
convening the 110th Session of the WTO CRTA meeting. Cambodia saw the
importance of the meeting as it kept WTO Members updated and informed regarding
Members' RTAs. He appreciated the Secretariat's effort in preparing the
comprehensive factual presentation and Japan for sending their questions on the
Agreement. He also thanked the Korean delegation for the introductory remarks
and presentation on the Agreement, which had highlighted important aspects of it.
Cambodia associated itself with the points made by the Korean delegation.
He briefly reflected on bilateral trade
after the entry into force of the Agreement.
1.15. One year after entry into force of the Agreement, the Parties had
noted positive progress in trade cooperation and investment trends between the
two countries and the remarkable implementation results. Their bilateral trade
had hit new levels, reaching a trade value of USD 1.05 billion in December
2023. For the first 4 months of 2024, their bilateral trade had risen by 7.4%
to USD 256 million. Cambodia's exports to Korea had risen by 8.4% to USD 98.2
million while imports had totalled USD 158 million, increasing by 6.7%.
Cambodia mainly exported footwear, apparel, travel products, beverages,
electrical and electronic components, rubber, pharmaceuticals and agricultural
products to Korea. It imported vehicles, electronics, kitchen appliances,
beverages, pharmaceuticals and finished plastics and products.
1.16. In May 2024, the first CKFTA Joint Committee meeting had been
organized to discuss and follow up on progress in implementation. Both parties
had expressed the desire to upgrade the Agreement and work further on areas of
potential trade cooperation.
1.17. To conclude, he was optimistic that the Agreement would become an
important mechanism to promote more trade and investment cooperation.
Considering the successful implementation and effective utilization of the
Agreement, he expected that their bilateral trade would increase substantially
in the years to come. He believed the Agreement would continue to attract more
new investment, creating more jobs, generating more real income and
contributing to GDP growth as well as reducing the poverty rate in Cambodia.
1.18. The representative of the European Union thanked the Republic
of Korea and Cambodia for the presentation and wished them success in the
implementation of the Agreement.
1.19. The representative of China expressed her appreciation to the
Parties for their efforts in implementing the Transparency Mechanism which had provided
them useful information to better understand the Agreement. She also expressed
her appreciation to the Secretariat for preparing the factual presentation and
wished the Parties success in the implementation of the Agreement.
1.20. The Chair noted the
consideration of the goods aspects of the Free Trade Agreement between the
Republic of Korea and Cambodia, had allowed the Committee to clarify a number of questions and conclude
oral discussion of the RTA in accordance with paragraph 11 of the Transparency
Mechanism. Any delegations
wishing to ask follow‑up questions were invited to forward submissions in
writing to the Secretariat by 9 July 2024 and Parties
were asked to submit replies in writing by
no later than 23 July 2024. In accordance with paragraph 13 of the
Transparency Mechanism all written submissions, as well as minutes of the
meeting would be circulated promptly, in all WTO official languages, and
made available in the WTO database on RTAs.
1.21. The Committee took note of the comments made.
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