CARI Captures Issue 534: Cambodia places high hopes on the RCEP and CCFTA
Cambodia places high hopes on the RCEP and CCFTA
(26 December 2021) Cambodia is looking forward to the Regional Comprehensive Economic Partnership (RCEP) and the Cambodia-China Free Trade Agreement (CCFTA) coming into force in 2022. The government expects the RCEP to boost the country’s GDP by 2%, increase exports by 7.3%, and increase investment inflows by 23.4% as the agreement will give Cambodian businesses preferential access to all 15 RCEP markets. Nevertheless, companies are also urged to adapt to capitalize on the RCEP’s benefits, especially since said benefits would also be available to neighboring Vietnam and Thailand who are also major agricultural exporters.
RCEP expected to provide farmers access to more markets
(25 December 2021) The Philippines’ assistant trade secretary responded to concerns raised by farmer associations regarding the RCEP saying that the agreement would provide the agricultural sector with greater market access and preferential trade arrangements while still protecting certain groups of agricultural products such as swine meat, poultry meat, potatoes, onions, garlic, cabbages, sugar, carrots and rice. He added that membership in the RCEP also indicates to investors that the country is able to offer a stable and predictable business environment, with terms that remain certain regardless of political changes.
Thailand targets 3-4% growth for 2022
(28 December 2021) Thailand’s commerce ministry expects the country’s economy to grow by only 3-4% in 2022, up from 2021’s estimated US$268.3 billion, as it expects another wave of pandemic restrictions if the Omicron variant takes a more severe turn. These numbers are also based on the RCEP’s expected entry into force, a favorable THB/USD exchange rate, rising Dubai crude oil and agricultural goods prices, increased container production, and the economic recovery of Thailand’s top trading partners. The ministry also expects cross-border trade to grow by 5-7% in 2022, with exports worth around US$32 billion.
Vietnam confirms flight resumption on five International routes
(28 December 2021) Vietnam will resume regular international flights to Japan, Taiwan, Singapore, Cambodia and the United States starting 1 January 2022 after grounding most international flights since March 2020. National carrier Vietnam Airlines has been cleared to cover all five routes while Vietjet Air, All Nippon Airways and Bamboo Airways have been granted permission to cover specific routes. This first reopening phase is slated to last two weeks, during which there will be four flights per week on each route in each direction. The government is also in talks to resume flights with Thailand, Laos, South Korea and China.
Malaysia lifts travel ban on eight African countries
(28 December 2021) Malaysia has removed its travel ban on South Africa, Zimbabwe, Mozambique, Malawi, Botswana, Eswatini, Lesotho and Namibia given the rapid spread of the Omicron variant, though these countries are still among the 18 countries on Malaysia’s list of high-risk countries. Travelers from these countries must undergo a polymerase chain reaction (PCR) test two days before departure and another upon arrival, after which fully vaccinated travelers will be quarantined for seven days while unvaccinated travelers will be quarantined for 10 days. Travelers can choose to be quarantined at home or at designated facilities.
EU rice tariffs to expire on 18 January 2022
(27 December 2021) The European Commission’s three-year safeguard measures on Indica rice exports from Cambodia and Myanmar which started on 18 January 2019 will expire on 18 January 2022, after which Cambodian rice exporters will be able to enjoy zero tariffs under the European Union’s Everything But Arms (EBA) trade preference scheme. Under the safeguard clause, Cambodia was required to pay US$200 per tonne in 2019, US$170 per tonne in 2020, and US$140 per tonne in 2021 when exporting to the EU. Nevertheless, supply chain issues such as a shortage of empty shipping containers threaten to dampen export growth.
14 deals signed at annual Singapore-China bilateral meeting
(29 December 2021) Singapore and China signed 14 memoranda of understanding and agreements at their annual high-level forum co-chaired by the countries’ vice premiers. Notable deals include an agreement between custom authorities from both sides that will see the establishment of a blockchain-based platform for the exchange of customs and trade information, an agreement between the Singapore Exchange and Shenzhen Stock Exchange to develop a cross-border exchange-traded funds (ETF) product link, as well as agreements to deepen cooperation on the CCI-New International Land-Sea Trade Corridor and the Sino-Singapore Tianjin Eco City.
China unveils curbs on foreign IPOs in restricted sectors
(28 December 2021) Chinese companies in industries that are off limits to foreign investment will now also be barred from offshore listings effective 1 January 2022, unless they are able to obtain a waiver from the government. Should the waiver be approved, foreign ownership in these companies will be capped at 30% with each investor allowed to hold no more than 10%. Foreign investors will also be barred from participating in management. The requirements will not be applied retrospectively and will only apply to new listings. The move comes after a debacle involving ride-hailing giant Didi’s listing in New York and concerns over new US securities laws.
Japan’s cabinet approves US$940 billion budget
(24 December 2021) Japan’s cabinet approved a US$941.55 billion budget—the country’s biggest spending plan yet—for the fiscal year 2022-2023, days after the parliament passed a US$315 billion COVID-19 stimulus package. The budget is based on projected real economic growth of 3.2% for the next fiscal year, up from the previous 2.2% estimate. The government plans to borrow US$323 billion to meet these expenses, down from this year’s US$381.6 billion, and it also expects higher tax revenues as pandemic restrictions are rolled back.
South Korea to cut tariff rates on 90 products in 2022
(29 December 2021) South Korea will reduce tariffs on 90 products in 2022, up from 83 products in 2021, to help bolster small businesses and stabilize the prices of raw goods. Products on next year’s list include crude oil, liquefied natural gas, liquefied petroleum gas, corn, sugar, chicken eggs, and materials for battery production. Most notably, tariffs on crude oil to produce naphtha will be reduced to 0.5% from 3%, while oil to produce liquefied natural gas and liquefied petroleum gas will be lowered by one percentage point from 3% to 2%.