The Cambodia-Korea Free Trade Agreement (CKFTA), likely to come into effect from December 1 this year, may boost Cambodia’s apparel exports to South Korea, which could not fully recover from the COVID-19 disruption in 2021. This year, Cambodia’s apparel exports to South Korea may touch the pre-COVID level despite volatility in monthly shipment.
The CKFTA will remove tariffs on 95.6 percent of products imported from Cambodia, while Cambodia will eliminate duties on 93.8 per cent of imported goods. South Korea’s National Assembly recently ratified the FTA which was signed in October last year. Cambodia had ratified the agreement much earlier.
Cambodia had exported apparel worth $187.650 mn in 2019 to South Korea, but the value of exports declined to $169.716 mn in 2020 due to the COVID-19 disruption. The export improved last year but could not fully recover when the shipment touched $167.151 mn. This year, Cambodia registered exports of $128.860 mn in the first eight months.
On a monthly basis, Cambodia’s outbound shipment of apparel to South Korea gained in July 2022 to $18.630 mn and further improved to $19.422 mn in August. The monthly export remained below $12 mn in April, May and June this year.
South Korea is a very minor market for Cambodia’s apparel exports. The Eastern nation is currently positioned at 13th place in terms of apparel exports from Cambodia. South Korea accounted for mere 1.51 per cent ($167.151 mn) out of Cambodia’s total apparel exports of $11.102 bn in 2021.
