Instead of viewing one another as competitors for share of the low cost sourcing market, Bangladesh and Cambodia are looking to one another to boost trade.
The two Southeast Asian nations will form a joint trade commission to expand bilateral trade and commerce, the Phnom Penh Post reported. The goal of the commission will be to remove trade barriers between the nations to improve trade for both sides.
Bilateral trade between Cambodia and Bangladesh is roughly $7 million. Bangladesh’s main exports to the country are garments, footwear and leather goods, and Cambodia mainly provides Bangladesh with cotton and fertilizer.
With the new trade commission, tariffs on certain traded goods will be altogether eliminated.
“We have agreed on which products and items that Cambodia will allow Bangladesh to import and export tariff-free. That will be revealed when we sign the agreement,” Soeng Sophary, spokesperson for Cambodia’s Ministry of Commerce told the Post. “Both countries are dependent on the garment industry as the main driver of economic growth, so we are looking at ways that trade can complement each other’s growth.”
Leaders of the Garment Manufacturers Association of Cambodia (GMAC) expect the bilateral trade deal could boost garment production for both parties. What’s more, GMAC president Van Sou Ieng told the Post, if Cambodia could get leather from Bangladesh duty free, that would help bolster its travel goods sector, which now benefits from duty-free access to the United States.
Ieng also addressed creating a labor-sharing agreement under the deal that would allow workers from Bangladesh to migrate to Cambodia to fill skills gaps in their garment sector.
“Having workers come from Bangladesh to Cambodia would be good for Cambodia because it would support future growth in manufacturing capabilities,” Ieng told the Post.
Bangladesh is reportedly close to settling its terms for the agreement, which is expected to be signed this year.