FTA to boost South Korea-Cambodia textiles-clothing trade

03 Nov '21

2 min read

Pic: Svershinsky | Dreamstime.com

The free trade agreement (FTA) between South Korea and Cambodia, signed last week, is expected to boost the bilateral trade, including textile and clothing trade, between the two Asian countries. Finished textile-based products such as garments, footwear and travel bags are covered under the FTA which removes tariffs on over 90 per cent of goods.

Under the FTA, together with the Regional Comprehensive Economic Partnership (RCEP), Cambodia will do away with tariffs on approximately 93.80 per cent of Korean goods, while Korea will withdraw tariffs on 95.6 per cent of its imports from Cambodia.

Source: TexPro

As shown in the graph above, during October 2020 to July 2021, South Korean textiles and clothing exports to Cambodia were higher compared to Cambodian textiles and clothing exports to South Korea. But the situation is expected to reverse in the upcoming period.

The monthly average of South Korean textiles and clothing exports to Cambodia was $11.55 million in the last quarter of 2020. It considerably reduced to monthly average of $9.20 million in the Q1 of 2021 with a drop of 20.38 per cent over the monthly average in Q4 of 2020. It remained same in the following quarter and, slightly declined in the Q3 of 2021 with a dip of 5.53 per cent to reach to $8.69 million, according to Fibre2Fashion’s market analysis tool TexPro.

Now it is expected to move up to monthly average of $9.21 million in the Q4 of 2021 with a rise of 6.04 per cent over the monthly average exports in Q3 of 2021.

The monthly average of Cambodian textiles and clothing exports to South Korea was $11.85 million in the last quarter of 2020. It significantly increased to monthly average of $18.18 million in the Q1 of 2021 with a surge of 53.39 per cent over the monthly average in Q4 of 2020. But it dropped suddenly to $7.57 million in Q2 of 2021 with a fall of 58.37 per cent. It again recovered in the Q3 of 2021 and reached to monthly average of $16.42 million with rise of 116.95 per cent, according to TexPro.

Now it is expected to move up further to monthly average of $18.27 million in the Q4 of 2021 with a rise of 11.26 per cent over the monthly average exports in Q3 of 2021.

Fibre2Fashion News Desk (RKS)

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