Cambodia-China Unfree Trade Agreement

« EBA គង់មានថ្ងៃណាមួយនឹងបាត់បង់ តែកិច្ចព្រមព្រៀងពាណិជ្ជកម្មសេរីរវាងកម្ពុជា និងចិនគឺនៅជារៀងរហូត។»

នាយករដ្ឋមន្ត្រី ហ៊ុន សែន ទំព័រហ្វេសប៊ុក ថ្ងៃ​ទី១២ ខែ​តុលា ឆ្នាំ២០២០

 

 

“The commodities which are still taxed are [under the Cambodia-China Free Trade Agreement (CCFTA)] rice, rubber, tobacco, sugar, powders and paper products. If these products are under the current quota they will be tax-free, but anything beyond the quota offered will be taxed while a further 51 commodities, including auto parts will be taxed products. However, those products are not currently produced and exported from Cambodia. They will be taxed for up to 10 years before taxes on them are lifted.”

 

Lead FTA negotiator Commerce Ministry secretary of state Sok Sopheak, 29 July 2020, Khmer Times

 

Hun Sen is right on two accounts: that Cambodia will one day lose the EBA benefits, and that the CCFTA will last “forever”, albeit the Buddha’s impermanence mantra.

Hun Sen has indeed worked hard to ensure the fateful day will come sooner, by violating human rights and bastardising democracy, which is against EU mandatory requirements for their EBA concession. He has lost 20% of it so far.

It is so ironic that while the EU punishes Hun Sen for his human rights and democracy substandard, it awards communist Hanoi an EU free trade agreement. It seems the difference between Hun Sen and Hanoi is that one pretends to uphold human rights and democracy, the other does not.

Hun Sen is right again that the CCFTA will last. It would crumble only if his opponents were capable of convincing China that they could offer a better alternative for China. Just ask Prince Sihanouk and comrade Pol Pot how better interests drive China’s adaptable foreign policies.

Without an opposition miracle, China will keep the CCFTA forever. Why would China do anything to damage it when it enjoys a favourable trade imbalance of 7 to 1 and other by-products? In fact, a prominent ASEAN economics adviser believes China is the one who has first initiated the CCFTA to push its own interest agenda. The Agreement is done in haste, with only three rounds of negotiation, and Cambodia has not even bothered to conduct any cost and benefit study before plunging into it

China has enjoyed an effective control over Cambodian economy and foreign policies, despite the strongman’s rhetoric otherwise on his national sovereignty. He has recently appointed as his adviser, with a rank of a minister, a naturalised-Cambodian Chen Zhi, who has also been Sar Kheng’s adviser since 2017. He is the head of conglomerate Prince Group that has fast become one of the country’s most dominant business operators. Hence, China is consolidating its stranglehold on Cambodia.

A small consolation for Hun Sen, however, is possible crumbs from the rich man’s table. He has used this CCFTA to entice US investments, saying Cambodia could be a launching pad into Chinese markets. Anyhow, this effort may be a dud as there is an extensive stretch of China’s FTA network, including one with ASEAN, for investors to choose from.

Still, the CCFTA is likely to disappoint Cambodia. First, Sok Sopheak confirms Cambodia’s main productions like rubber, sugar, tobacco, and beyond China’s imposed quota, rice, are not tariff-free. Second, even with tariff concessions local producers will struggle to break into the markets that are well-known for being price conscious. Their production costs are high, and their economy of scale is small. Third, tax-free imports from China of almost 10,000 products makes them cheaper, which will flatten any competition from local manufacturers.

China may not, in the long run, leave any crumbs at all. It prefers giving away handouts and loans that excites Hun Sen to no end, encouraging him to put Cambodia’s head in a noose.

 

Ung Bun Ang

20x20

 

Fake News You Can Use

It is uncertain why main opposition CNRP has been so over-ambitious and over-zealous in whatever they dream of. If they are to hold a demonstration, they will speak of a “mass” turnout. If they are to conduct any campaign, they speak of a system or regime collapse. All their grand rhetoric has invariably ended in hot air.

The latest campaign is their call for an online and world-wide petition to end all impunities of the Hun Sen regime. They want 500,000 signatures so that they could take court actions outside Cambodia against father of impunities Hun Sen. After 14 weeks, as of 16 October 2020 at 9:00 am, there are 25,130 signatures; organisers tell RFA they are thrilled with the outcome, though they still want 500,000.

Here is the catch. At this rate, it would take another five years to reach their target, assuming of course, that the rate of 1,795 signatures per week at Week 14 remains constant. It has been dropping, yet, from a peak of 2,862 per week in Week 4. In absolute terms, the weekly signature number has declined from peak 3,636 to a mere 606 in Week 14.  

The impunity campaign for 500,000 signatures has fast become another flop, unless they resort to Hun Sen’s favourite click-farming.

 

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