Vietnam Initiates Trade Boost with Reduced Tariffs on Select Cambodian Goods

• 17 February 2024
• Local News
• 1609 Views

In a bid to fortify economic ties, Vietnam has introduced preferential import tariffs for specific Cambodian goods, aiming to catalyze trade between the two neighboring nations. The recent issuance of Decree 5/2024/ND-CP by the Vietnamese Government outlines conditions under which lower import tariffs will be applicable for Cambodian imports. The move is expected to stimulate commerce, building upon the already substantial trade volume that approached nearly US$6.6 billion in 2023, according to an update by vietnam-briefing on 6 February 2024.

The preferential treatment under Decree 5 encompasses imports adhering to Vietnam’s preferential import tariff schedule, possessing a certificate of origin from the Kingdom of Cambodia, and entering through specified border gates as detailed in the decree. This strategic initiative is anticipated to bolster economic collaboration between Vietnam and Cambodia, fostering mutually beneficial trade relations.

Cambodia’s Exports Gain Momentum: Key Contributors to Vietnam’s Trade Balance: Cambodia’s significant contributions to Vietnam’s trade balance are underscored by the export of key commodities. In 2023, Cambodia’s exports to Vietnam exceeded US$3.68 billion, with cashew nuts and rubber emerging as primary contributors. Cashew nut exports alone accounted for over US$836 million, showcasing Cambodia’s prominence as a crucial supplier in Southeast Asia.

Key Highlights of Cambodia’s Exports to Vietnam in 2023:

• Cashew nuts: Over US$836 million
• Rubber: Exceeded US$888 million

While Vietnam is renowned as the world’s third-largest natural rubber producer and exporter, the import of Cambodian rubber is necessitated by quality considerations. Cambodia’s competitive pricing and the quality of its cashew nuts reinforce its pivotal role in Vietnam’s supply chain.

Additionally, Vietnam’s exports to Cambodia in 2023 surpassed US$4.88 billion, reflecting a slightly higher trade volume than the reverse. Noteworthy sectors contributing to Vietnam’s export portfolio to Cambodia include textiles and garments, iron and steel, and various other base metal products.

Key Highlights of Vietnam’s Exports to Cambodia in 2023:

• Textiles and garments: US$808.85 million
• Iron and steel: US$721.01 million

The intricate integration of supply chains, particularly in the textile and garment industry, underscores the symbiotic economic relationship between the two nations. As Vietnam remains a significant investor in Cambodia, both countries, as ASEAN members, stand to benefit from regional trade agreements.

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• Economy and Finance