South Korea and Cambodia announced on Monday that they have made progress in talks of potentially signing a free trade agreement (FTA) that would increase the exchange of goods between the two countries.
According to the Khmer Times, the two sides signed an agreement confirming the countries' desire to launch a feasibility study that should result in a trade agreement that would up the exchange of goods and business in various segments.
South Korean trade minister Yoo Myung-hee and Cambodian commerce minister Pan Sorasak signed the agreement in Busan, where the ASEAN summit is underway. For economists, this is a milestone as the two sides seek improved trade ties.
It is unclear how long the feasibility study will take before recommendations are delivered. However, some industry analysts suggested that it would take up to a year or more before any solid progress is achieved.
Cambodia and South Korea have yet to reach a significant trade status although imports and exports already saw an increase of around 15 percent compared to the volume incurred in 2017.
A free trade agreement would work well for both sides as the countries are experiencing external headwinds. Cambodia, in particular, could see its "Everything But Arms" (EBA) agreement with Europe revoked next year, while South Korea is engaged in a trade war with Japan.
Economists said looking into other opportunities besides the existing trade ties both countries have forged could open doors for more business and push for increased economic stability for the two sides.
Earlier this month, the European Union (EU) Commission revealed that it has completed the preliminary report on alleged human rights violations in Cambodia. At that time, The commission said the report will be sent to the Cambodian government.
The Commission's statement on the preliminary report reiterated that while the EU wants to continue trading with the Asian country, the the government needs to address the issues first so the EBA agreement will not be revoked.
EU commissioner for trade, Cecilia Malmström, said in a tweet earlier this month that the Commission is "very concerned" about Cambodia's human rights issue. She said the government has been given a month to respond to the preliminary report.
South Korea and Japan, on the other hand, upped trade tensions anew on Monday, despite previously agreeing to uphold an intelligence-sharing agreement. According to Reuters, officials from both sides had contradicting statements that added to the uncertainty in the atmosphere.
Tensions between Seoul and Tokyo kicked off over a disagreement on South Korea's request for compensation for its workers who were forced to work under the Japanese occupation of the country.
