The free trade agreement may help boost Cambodia’s apparel exports to South Korea.

The agreement also presents opportunities for value-added investments in Cambodia’s downstream processing industries through a plus one business model, in which South Korean companies could expand their supply chain network developed in not only China but also Vietnam or Thailand. South Korea has a great demand for high-value winter clothing and denim. Other potential products that have good demand in the country include non-leather footwear, home textiles, jute and jute products etc.

This year, Cambodia’s apparel exports to South Korea may touch pre-Covid levels despite the volatility in monthly shipments.The FTA will remove tariffs on 95 per cent of products imported from Cambodia, while Cambodia will eliminate duties on 93 per cent of imported goods.On a monthly basis, Cambodia’s outbound shipment of apparel to South Korea gained in July 2022 and further improved in August 2022. South Korea is a very minor market for Cambodia’s apparel exports and is currently positioned at 13th place in terms of apparel exports from Cambodia. South Korea accounted for a mere 1.51 per cent out of Cambodia’s total apparel exports in 2021. The biggest markets for Cambodian garments are, in order, the US, EU, Japan, Canada and the UK.