Cambodia ranked third in both real income gains and export growth among Regional Comprehensive Economic Partnership (RCEP) members, according to the World Bank (WB).
In its recent working paper entitled “Estimating the Economic and Distributional Impacts of the Regional Comprehensive Economic Partnership”, the Washington-based lender said the Kingdom came in third after Vietnam and Malaysia, in terms of real income gains.
On export growth, the report said Cambodia was expected to log a rise of 6.5 per cent, the highest after Vietnam and Japan at 11.4 per cent and 8.9 per cent, respectively, the 46-page research paper said.
The RCEP is the world’s largest trade pact, signed on November 15, 2020 by the 10 ASEAN countries and five other Asia-Pacific countries – Australia, China, Japan, New Zealand and South Korea – and entering into force in Cambodia on January 1, 2022.
Ratification is still pending in South Korea and four ASEAN countries – Indonesia, Malaysia, Myanmar and the Philippines.
The working paper said the deal has the potential to lift 27 million additional people to middle-class status by 2035.
“Considering the full scenario, with reductions in tariffs, non-tariff measures, and trade costs, Lao PDR, Thailand, Cambodia, Vietnam and Malaysia benefit the most. These positive gains are magnified when a productivity kick is assumed.
“Under this scenario, the real income in Vietnam and Malaysia increases almost five per cent. In Japan, the country that gains less under this scenario, the real income increases by 0.5 per cent.
“Interestingly for Japan, the impact of the four RCEP scenarios is similar, which suggests that most gains are associated with a fall in tariffs, in contrast to the rest of the countries, where the fall in tariffs leads to very small impacts, or even a negative impact as in Cambodia and Vietnam.
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Author: May Kunmakara
Source: The Phnom Penh Post
February 28, 2022
