GSP Status Attracts Malaysians

KHMER TIMES
SOK CHAN

Kith Meng (R), president of the Cambodia Chamber of Commerce, shakes hands with Dato Dzulkifli Mahmud, CEO of the Malaysia External Trade Development Corporation. KT/Chor Sokunthea

Cambodia’s Commerce Minister Pan Sorasak called on Malaysian businesses to invest in the Kingdom’s travel goods manufacturing sector to take advantage of the country’s unfettered access to US markets for exports like luggage, backpacks, handbags and wallets, under the Generalized System of Preferences (GSP) for least developed countries. This call comes as bilateral trade volume between Cambodia and Malaysia fell last year by 9.5 percent from 2014.

Mr. Sorasak said at the Cambodia-Malaysia Business Opportunities seminar yesterday that from July 1 zero duties will be levied on travel goods exports from Cambodia to the US, under the GSP.

Due to this, added Mr. Sorasak, the Ministry of Commerce was keen to attract overseas investors to the sector and was currently planning a roadshow with the Garment Manufacturers Association in Cambodia (GMAC) and the US embassy in Phnom Penh.

Last year, Cambodia’s exports of travel goods to the US amounted to $48.3 million. It is ranked number 14 among 25 countries in the world for exporting travel goods to the US, with China as the top exporter.

“We would like to invite Malaysian businesspeople to join us on this roadshow and invest in our travel good manufacturing sector. We no longer have to pay duties for our exports to the US and this is a huge incentive to investors,” said Mr. Sorasak.

Earlier yesterday, Xinhua reported that bilateral trade volume between Cambodia and Malaysia reached $386 million in 2015, down 9.5 percent from the previous year.

The China state-owned agency said Cambodia’s exports to Malaysia were recorded at $151 million last year, down 17 percent from the previous year, while the country’s imports from Malaysia amounted to $235 million, also down 3.5 percent. The trade balance in 2015 was in favor of Malaysia with a trade surplus of $84 million.

Dato’ Sri Mustapa bin Mohamed, Malaysia’s minister of international trade and industry, welcomed the move and called for Malaysian businesses to invest in Cambodia’s travel goods sector.

“Granting duty-free benefits for exports for travel goods is something new which is given by America to Cambodia. This is a wonderful opportunity for Malaysian businessmen to set up operations in Cambodia ‒ no duty, no quota and no limit of manufactured products to US,” said Mr. Mustapa.

Van Sou Ieng, chairman of GMAC, said this duty-free status will help boost Cambodia’s competitiveness on travel goods exports and attract more foreign investment. He also added that 100,000 new jobs could be added to the travel goods manufacturing sector.

“We now have 15 factories in Cambodia producing travel goods and these factories are mostly South Korean, Hong Kong and Chinese-owned,” said Mr. Sou Ieng.

Meanwhile yesterday, the Cambodia Chamber of Commerce (CCC) and Malaysia External Trade Development Corporation (Matrade) officially signed a memorandum of understanding (MoU) to cooperate on the exchange of trade information and pave the way for businesses in both countries to carry out matching activities, like events and expositions.

CCC director general, Nguon Meng Tech, said the MoU will strengthen both countries’ close cooperation on business, trade and investment.

“We want more Malaysian investors to come to Cambodia and create more jobs for Cambodian people. This will generate more revenue for the economy,” Mr. Meng Tech said.

“Through this MoU we want to see Malaysia become one of the top investors in Cambodia,” he added.

Dato’ Dzulkifli Mahmud, CEO of Matrade, said the MoU would enhance bilateral trade and strengthen economic ties between Malaysia and Cambodia.

“Matrade is working closely with CCC to get more Malaysian businesspeople to come to Cambodia to seek investment opportunities in the country,” said Mr. Dzulkifli.

“We would like to see how we can help develop the Cambodian economy, particularly in sectors where we are strong ‒ like construction, engineering, services and halal products,” he added.

Kith Meng, CCC’s president, said that Malaysians were among the first to invest in Cambodia in 1993, after the first democratic elections held under UN supervision, and have been consistently ranked as one of Cambodia’s top trade and investment partners.

“Malaysian investment to Cambodia remains strong in various sectors, particularly in the financial sector,” he said.

The total direct investment by Malaysia in Cambodia’s financial services was $608 million in 2014, making it the top investor in the sector.

“I believe that the trade and investment between the two countries would keep increasing over the coming years, given the fact that we have good economic relations and both governments are pro-business,” Mr. Meng said.

“At the private sector level, the Cambodia Chamber of Commerce and Matrade have worked together closely to support their respective government’s policies. Every year we have organized several expositions and business matching seminars to ensure the smooth flow of business and investment,” he said.