Khmer Firm

Exporters nervously await Asian free trade zone

2009-12-28T11:06:00.001-08:00

When the clock strikes midnight on NewYear’s Eve, China and 10 Southeast Asian nations will usher in the world’s third-largest free trade area. While many industries are eager for tariffs to fall on everything from textiles and rubber to vegetable oils and steel, a few are nervously waiting to see whether the agreement will mean boom or bust for their businesses.

Trade between China and the 10 states that make up the Association of Southeast Asian Nations has soared in recent years, to $192.5 billion in 2008, from$59.6 billion in 2003. The new free trade zone, which will remove tariffs on 90 percent of traded goods, is expected to increase that commerce still more.

The zone will rank behind only the European Economic Area and the North American Free Trade Area in trade volume. It will encompass 1.9 billion people. The free trade area is expected to help Asean countries increase exports, particularly those with commodities that resource-hungry China desperately wants.

The China-Asean free trade area has faced less vocal opposition than the European and North American zones, perhaps because existing tariffs were already low and because it is unlikely to alter commerce patterns radically, analysts say.

However, some manufacturers in Southeast Asia are concerned that cheap Chinese goods may flood their markets, once import taxes are removed, making it more difficult for them to retain or increase their local market shares. Indonesia is so worried that it plans to ask for a delay in removing tariffs from some items like steel products, textiles, petrochemicals and electronics.

‘‘Not everyone in Asean sees this F.T.A. as a plus,’’ said Sothirak Pou, a visiting senior research fellow at the Institute of Southeast Asian Studies in Singapore.

Asean and China have gradually reduced many tariffs in recent years.

However, under the free trade agreement — which was signed in 2002 — China, Indonesia, Thailand, the Philippines, Malaysia, Singapore and Brunei will have to remove almost all tariffs in 2010.

Asean’s newest members — Cambodia, Laos, Vietnam andMyanmar—will gradually reduce tariffs in coming years and must eliminate them entirely by 2015.

Most of the goods that will become tariff-free in January — including manufactured items—are currently subject to import taxes of about 5 percent. Some agricultural products and parts for motor vehicles and heavy machinery will still face tariffs in 2010, but those will gradually be phased out.

In recent years, China has overtaken the United States to become Asean’s third-largest trading partner after Japan and the European Union. The overall trade balance has shifted slightly in China’s favor, although there are significant differences among Southeast Asian countries’ trade balances, said Thomas Kaegi, head of macroeconomic research for the Asia-Pacific region at UBS Wealth Management Research.

Singapore, Malaysia and Thailand have only small trade deficits with China, while Vietnam’s has grown substantially in recent years. In 2008, Vietnam exported items worth $4.5 billion to China but imported about $15.7 billion worth of Chinese goods.

In Indonesia, the textile and steel industries are particularly nervous about the lifting of tariffs, prompting the government to say that it would ask for a delay on some provisions. No time frame for submitting the request was given, but the Asean secretariat said it had not yet received an official request.

While competing with more Chinese imports may pose new challenges for Asean manufacturers, analysts say increasing their access to the 1.3 billion people of China could produce significant benefits.

Rodolfo Severino, who was secretary general of Asean from 1998 to 2002, identified Malaysia — which already exports palm oil, rubber and natural gas to China — as one of the countries that might benefit most from the removal of tariffs.

But nations like Vietnam that focus on the production of cheap consumer goods are more likely to be hurt, said Mr. Severino, head of the Asean Studies Center at the Institute of Southeast Asian Studies in Singapore.

Those countries may need to look for new export products and identify new niche markets, he said: ‘‘This is the nature of competition.’’ Song Hong, an economist, expects that China will import more agricultural goods, like tropical fruit, from countries like Thailand, Malaysia and Vietnam when the trade area takes effect. That could hurt Chinese farmers in southern provinces like Guangxi and Yunnan, said Mr. Song, director of the trade research division at the Institute of World Economics and Politics at the Chinese Academy of Social Sciences in Beijing.

Mr. Sothirak, who was Cambodia’s minister of industry, mines and energy from 1993 to 1998, said the removal of tariffs might help increase Cambodia’s agricultural exports to China. Cambodia needs to diversify its export markets because its exports to the United States and Europe have declined, he said.

While he does not hold much hope that Cambodian textile exports would be able to compete with China’s highly developed garment industry, he said he believed the free trade area might entice more Chinese garment factories to set up operations in Cambodia, where production costs and labor are cheaper.

Pushpanathan Sundram, deputy secretary general of Asean for Asean Economic Community, acknowledged that there would be ‘‘some costs involved’’ for some countries when the free trade area took effect, but he said he believed China and Asean would ‘‘mutually benefit.’’ Despite the expectations for increasing trade, Mr. Severino predicted that the introduction of the trade zone would not be a ‘‘breakthrough event’’ setting off a dramatic surge in commerce come January.

‘‘There are many factors that traders and investors consider, and the trend has been going this way anyway,’’ he said. ‘‘What this does is to send out good signals and show the determination of governments to make things easier.’’

Sam Rainsy’s Letter to the Editor published in The Cambodia Daily, December 28, 2009

2009-12-28T10:58:00.001-08:00

Mr. Sam Rainsy raised Mrs. Meas Srey in defiance during the uprooting of the border poles on 25th October 2009. She was latter arrested and is currently in prison.

Sam Rainsy’s Letter to the Editor published in The Cambodia Daily, December 28, 2009

http://tinyurl.com/yeptxv6

FARMERS BEING HELD “HOSTAGE” OVER VIETNAM BORDER CASE

At best scapegoats, at worst hostages

In your article “Defenders’ Project Lawyer Takes On Border Posts Case” (December 26-27, page 13), it’s good to learn that a courageous lawyer has accepted to defend two Svay Rieng province farmers who were charged and detained in prison over their alleged involvement in the uprooting of small border demarcation posts on the border with Vietnam. The charges against Meas Srey and Prum Chea are part of a larger case against SRP President Sam Rainsy.

As specified in previous statements “The Real Court Is in Hanoi” (December 21) http://tinyurl.com/y9p9vla and “Stop State Terrorism in Cambodia” (December 23) http://tinyurl.com/yj6lhll, I take full responsibility for uprooting the six wooden poles from villagers’ rice fields in Svay Rieng province on October 25.

I led villagers to their rice fields and got the controversial poles pulled out. Without my presence, my words and my act nothing would have happened in that village on that day. From a legal and judicial point of view I am the only person to be prosecuted.

Therefore, Meas Srey and Prum Chea are, at best, scapegoats given the authorities cannot reach me while I am abroad. At worst, they are just hostages because their arrest and detention are ways for the authorities to collectively punish the population for having complained about land confiscation associated with border encroachments to their elected representatives. It’s also a way to terrorize the population into stopping exposing an issue that is embarrassing for the government.

Sam Rainsy

Member of Parliament

Paris

PM Abhisit: Hun Sen accusation on planned Cambodia coup won't affect relations between peoples

2009-12-28T10:55:00.001-08:00

BANGKOK, Dec 27 (TNA) -- Thai Prime Minister Abhisit Vejjajiva said Sunday accusation by his Cambodian counterpart Hun Sen over an alleged plan to stage a coup in Cambodia-- which he denied earlier-- would not disrupt relations between the peoples of the two neighbouring countries.

Speaking during his weekly address on television and radio, Mr Abhisit said he considered the criticisms by Mr Hun Sen as “normal” because many other people also criticised him daily.

Mr Abhisit said he would not allow the charges by the Cambodian leader to affect relations between peoples of the two countries.

Mr Hun Sen was quoted by an international news agency as speaking at a provincial ceremony Thursday, saying he had seen a secret Thai government document outlining a plan to mount a coup.

The Thai Ministry of Foreign Affairs lodged a complaint with the police the same day, charging key leaders of the anti-government United Front for Democracy against Dictatorship with publicising confidential documents and libel following a leak of the ministry’s classified document on relations between Thailand and Cambodia.

Relations between Thailand and Cambodia have worsened since the Cambodian prime minister appointed ex prime minister Thaksin Shinawatra as an economic adviser last month and refused to extradite him to Thailand to serve his two-year jail term for violating the law on conflict of interest.
The situation further deteriorated when the two countries recalled their ambassadors and later expelled their diplomats. A Thai engineer was arrested on spying charges for allegedly passing secret information on Thaksin's flight schedule to the Thai Embassy in Phnom Penh. Pardoned by the Cambodian king, the engineer returned to Bangkok earlier in December.

Asked whether Thailand would send an ambassador to Phnom Penh next year, Mr Abhisit said the issue is not a crux if Cambodia does not violate Thai judicial system which has sentenced Mr Thaksin and that Phnom Penh government also review issues which have caused the problem.

Mr Abhisit said he tried to normalise trade along the common border and to conduct assistance by his government to Phnom Penh, but Mr Hun Sen rejected it.

The Thai prime minister said what his government had done should be considered “very light” as it would not affect trade or lead to war with that country, but it is impossible to let Cambodia continue criticising Thailand and its judicial system, he said, adding that it is a pity that some Thais have tried to create tensions. (TNA)

Cambodia holds Khmer traditional measurement exhibition

2009-12-28T10:53:00.001-08:00

PHNOM PENH, Dec. 28 (Xinhua) -- Cambodia's Reyum Institute has documented more than 130 Khmer traditional measurements and will run a show-casing of the documentation for the public in Phnom Penh from Dec. 28, 2009 to Feb. 2010, official news agency AKP reported on Monday.
    According to Research Manager of Reyum Institute Preap Chanmara, Cambodia has long been using a wide variety of measurements for length, height, weight, depth, size, substance and time. Some measurements have been standardized with human body, things, like coconut fruit and tree, and others have been adapted from French measurements; for instance, meter, kilometer, etc.
    Chanmara said that sources of the documented measurements include interview with people, written documents, and observation of people's daily interaction.
    Different locations may use and understand different measurements. Some locations may use the same measurements for different meanings.

Vietnam and Cambodia reach US$6 billion business deals

2009-12-28T10:51:00.001-08:00

Vietnam and Cambodia signed investment agreements and contracts worth US$6 billion at a conference held in Ho Chi Minh City on December 26 to promote Vietnamese investment in Cambodia.

Under the documents, Vietnam will invest in power generation, food processing, fertiliser production, rubber plantation and bauxite mining in Cambodia.

Two-way trade between the two countries has increased significantly in recent years, reaching US$1.7 billion in 2008, up 40% against 2007.

Vietnamese businesses have invested in over 60 projects in Cambodia with a total capital of nearly US$900 million.

Vietnamese Prime Minister Nguyen Tan Dung and his Cambodian counterpart, Hun Sen, co-chairmen of the conference, welcomed a joint initiative to host the conference as a practical move to promote bilateral co-operation in investment and trade.

PM Hun Sen said Cambodia is calling for foreign investment in such areas as agro-forestry, industry, infrastructure, product processing for export, mining and tourism.

Cambodia will create a favourable investment environment for the Vietnamese businesses to operate in the country, PM Hun Sen assured PM Dung and nearly 600 officials and business people attending the event.

PM Dung appreciated the effectiveness of Vietnamese-invested projects in Cambodia. He said, however, that the results have not yet matched the potential of both countries and not lived up to their people’s expectations.

He recalled high-level talks and meetings between the two countries’ top leaders who had agreed to take additional measures to broaden co-operative ties. They expressed their determination to raise two-way trade to US$2 billion in 2010 and increase Vietnamese investment in Cambodia to US$6 billion in the coming years.

At the event, the Vietnamese Ministry of Planning and Investment and the Cambodian Development Council signed a memorandum of understanding on investment promotion.

The Vietnamese Minister of Industry and Trade and the Cambodian Minister of Industry, Mining and Energy signed the minutes of their meeting regarding bauxite exploration and exploitation in the Cambodian Mondulkiri province.

The Bank for Investment and Development of Vietnam (BIDV) signed deals to provide financial services to Vietnamese businesses investing in Cambodia.

Also during the event, a certificate of operation was granted to the association of Vietnamese investors in Cambodia, and investment licences were given to a number of Vietnamese businesses. (VNA

New road shortens travel time between Bangkok, Angkor

2009-12-28T10:48:00.001-08:00

Cambodian Prime Minister Hun Sen on Monday inaugurated a new 150 kilometer road running from Siem Reap to Poipet, on the border with Thailand.

The Asian Development Bank (ADB) has funded the rehabilitation of National Roads 5 and 6, the central component of a larger 50 million U.S. dollars road improvement project for Cambodia's northwest.

The old road was largely devoid of pavement after almost 30 years of civil strife, and often impassable during the rainy season. Most of the road's bridges had been demolished during wartime, with only decrepit Bailey bridges - portable pre-fabricated truss bridges - in their place, according to a press release of the ADB.

The new road will be a boon for overland tourism, making it easier and more affordable for local and foreign tourists to visit the renowned World Heritage site, Angkor Wat.

The once-arduous trip from Poipet to Siem Reap, site of the ancient temple, usually requiring an overnight stay along the way, can now be made at a leisurely pace in one day during daytime.

"With the new road you can have breakfast in Bangkok and supper in Siem Reap," said Putu Kamayana, ADB's Country Director in Cambodia.

The new all-weather road features modern drainage systems with raised embankments, and can withstand severe floods and torrential tropical downpours.

The revitalized road is expected to pave the way for increasing commerce between Cambodia and Thailand, which already amounts to billions of dollars in bilateral trade each year.

"Forging stronger linkages and bonds between neighboring countries benefits both nations' people," said Kamayana.

Another ADB-funded project is rehabilitating rural roads in Cambodia's northwest that link the new road between Siem Reap and Poipet, extending the road's benefits to people throughout this region of the country.

"Families who found themselves unable to access crucial social services for large parts of the year will now have reliable, year-round access to healthcare and schools," said Shihiru Date, Transport Specialist in ADB's Southeast Department.

Source: Xinhua

Vietnam visa waivers to last longer in 2010

2009-12-28T10:47:00.001-08:00

A deal allowing Cambodian and Vietnamese citizens to cross the border between the two countries without a visa will be extended from January 1 to allow visits of up to 30 days, according to Cambodia’s Ministry of Foreign Affairs.

Ministry spokesman Koy Kuong said people holding ordinary passports valid for at least six months are only allowed to visit the neighbouring country for 14 days without a visa, based on a bilateral agreement signed November 4, 2008.

He said he hoped the move would give a further boost to the tourism sector, as was seen following the initial agreement.

“There are many tourism sites in Cambodia and Vietnam,” he said.

“If they only get a short time to visit, how can they visit them all? The longer they stay, the more money they spend.”

In the first nine months of the year, 42.82 percent more Vietnamese visited the Kingdom compared with the same period last year, which analysts have said is largely the result of the visa exemption.

Arrivals from Laos, which has a 30-day visa exemption agreement, were up 92 percent over the period, though from a much lower base.

Businesses to invest billions of dollars in Cambodia

2009-12-26T19:57:00.001-08:00

Vietnamese and Cambodian businesses have signed investment agreements and contracts worth US$6 billion to invest in power generation, food processing, fertilizer production, rubber plantation and health care in Cambodia.

The deals were signed at a conference held in HCM City on December 26 to promote Vietnamese investment in Cambodia. The event was co-chaired by Vietnamese Prime Minister Nguyen Tan Dung and his Cambodian counterpart Hun Sen, and co-hosted by the Vietnamese Ministry of Planning and Investment (MPI) and the Cambodian Development Council (CDC).

It was reported at the conference that both countries have signed more than 60 documents for bilateral cooperation in almost all areas, and established appropriate mechanisms to facilitate cooperation.

Two-way trade has increased significantly in recent years, reaching US$1.7 billion in 2008, up 40 percent against 2007.

Vietnamese businesses have invested in over 60 projects in Cambodia with a total capitalisation of nearly US$900 million, making Vietnam among the top three foreign investors in Cambodia. Most invested projects have been operating efficiently, especially in forestry, agriculture, mining, telecommunications, banking and insurance.

However, the two countries have not fully tapped their great potential for expanding investment and trade cooperation. A number of Vietnamese businesses have not developed plans to increase operations in this market.

PM Dung and PM Hun Sen welcomed a joint initiative to host the conference as a practical move to promote bilateral cooperation in investment and trade.

PM Hun Sen said Cambodia is calling for foreign investment in its strong areas such as agro-forestry, industry, infrastructure construction, product processing for export, mining and tourism.

He said the royal government has offered incentives to attract Vietnamese investors, and signed agreements on trade, tourism, energy and maritime transport with Vietnam. It has also licensed a number of Vietnamese businesses to invest in fertilizer production, banking-financial services, bauxite exploration and exploitation, and farm produce processing.

The Royal government of Cambodia will create a favourable investment environment for Vietnamese businesses to operate in the country, PM Hun Sen assured Mr Dung and representatives of 600 businesses attending the event.

For his part, PM Dung hailed the efficiency of Vietnamese-invested projects in Cambodia, but said the results have not yet matched the potential of both countries and not lived up to their people’s expectations.

He recalled high-level talks and meetings between the two countries’ top leaders who had agreed to take additional measures to broaden cooperative ties. They vowed to raise two-way trade to US$2 billion in 2010 and increase Vietnamese investment in Cambodia to US$6 billion in the coming years.

He said the strong political and diplomatic ties and the long-standing friendship between the two countries will lay a firm foundation for boosting cooperation in other areas.

During December 2009 visit to Cambodia by Party General Secretary Nong Duc Manh, Vietnam and Cambodia signed additional agreements on cooperation in power generation, industry, mining and maritime transport

Representatives of Vietnamese and Cambodian businesses attending the conference

Mr Dung pointed out Vietnamese and Cambodian advantages and said they can support each other in development. Cambodia has a high demand for cooperation in farm produce processing (rubber, sugarcane and wood), power generation, mineral exploration, exploitation and processing, aviation, finance, insurance, banking, telecommunications, oil & gas, fertilizer production and clean energy. Meanwhile, Vietnam has about 460,000 businesses, many of whom are strong in terms of technology, market development, finance, qualitative human resources and experience.

He proposed that both sides finalise a legal framework to facilitate investment and trade development. He suggested examining and amending the signed agreements, including one on investment protection and promotion, and conducting negotiations and signing new agreements on double tax avoidance, labour cooperation and legal aid.

The Vietnamese government creates favourable conditions for its businesses to operate in Cambodia, Mr Dung said.

He reminded the businesses to explore and abide by Cambodia’s legal system and its customs.

At the event, MPI and CDC signed a memorandum of understanding on investment promotion. The Vietnamese Minister of Industry and Trade and the Cambodian Minister of Industry, Mining and Energy signed the minutes of their meeting regarding Bauxite exploration and exploitation in Mondulkiri province.

The Bank for Investment and Development of Vietnam (BIDV) signed a deal to provide financial services to Vietnamese businesses investing in Cambodia.

The two PMs also granted a decision to establish an association of Vietnamese investors in Cambodia, and investment licenses to a number of Vietnamese businesses.

Businesses to invest billions of dollars in Cambodia

2009-12-26T19:56:00.001-08:00