By The Business Desk in Phnom Penh/Rasmei Kampuchea Daily | Asia News Network – Thu, Jan 19, 2012
Phnom Penh (Rasmei Kampuchea Daily/ANN) - Rice exports have the potential to become a significant source of revenue for Cambodia, EU Ambassador Jean-Fran?ois Cautain says.
In an interview with The Cambodia Herald, Cautain said bilateral trade and investment relations had been "evolving in a very positive way" with Cambodia, as a least developed country (LDC), enjoying duty-free access benefits to the EU under its "Everything But Arms" (EBA) initiative.
"The importance of EBA benefits to Cambodia is likely to intensify further," he said, noting that the EU had proposed modifying the the list of 172 countries benefitting from its generalised systems of preferences (GSP) by taking out 96 countries from 2014.
"As a result, it would appear that countries like Cambodia and Laos, which remain entirely within the GSP/EBA system, will see their competitiveness further improved compared to the previous situation.
"While EBA carries, by definition, much lower tariffs than GSP, the fact that those benefiting from GSP might be less in the future will amplify the positive benefits of the EBA regime," the ambassador said.
Along with the recent enactment of rules of origin (ROO), this should have an "appreciable impact, in the mid-run, on trade between the EU, on the one hand, and Cambodia on the other."
The ambassador noted that Cambodian exports to the EU grew almost 40 per cent from a year earlier to slightly more than US$1.3 billion in 2011, accounting for 28.7 per cent of all exports.
Exports were highly concentrated in textiles and textile articles (78 per cent), footwear (9.5 per cent), other goods vehicle equipment (about 7 per cent) and rice (0.5 per cent).
The ambassador said rice had emerged as a "promising" export in recent years, especially since its coverage under EBA since September 1, 2009. Cambodian rice exports to the EU increased from about $2 million in 2008 to $31.5 million in 2010 and $66 million last year.
"This positive trend is expected to continue over the next years, as the production capacity improves and quality standards can be met," the ambassador said.
"In addition, Thailand's new rice pledging scheme passed by the Thai new Government is likely to increase Thailand's rice export prices and possibly, make Cambodia's rice exports even more competitive.
"Under the EBA, Cambodia, thanks to the duty and quota free access, is estimated to makes savings of about $150 /tonne. Given Cambodia has an estimated rice surplus of 2.5 million tones, rice exports have the potential to become a significant source of revenue. The impact of the October floods on rice production, however, is likely to considerably reduce these estimates."
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