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REGIONAL RELATIONS / TRADE
Thailand-Cambodia investment initiative
PHUSADEE ARUNMAS
Thailand will hold ministerial talks with Cambodia tomorrow to promote investment in several sectors including textiles, agriculture, furniture, energy and telecommunications.
Cambodian Commerce Minister Cham Prasidh would lead more than 40 private sector representatives to meet with Thai Commerce Minister Krirk-krai Jirapaet, according to Amparwon Pichalai, assistant director-general of the Trade Negotiations Department.
The meeting will also feature business matchmaking between Thai industrialists and their Cambodian counterparts.
Mrs Amparwon said the Cambodian government was stepping up efforts to encourage foreign investment, particularly from Thai investors, in its special economic zones in Poipet and Koh Kong, just across the border from Thailand.
Phnom Penh is encouraging Thai investors to set up industrial plants in the area that can link up to Laem Chabang seaport in Chon Buri.
Previously, the Federation of Thai Industries said it wanted members to invest more in Cambodia. But they encountered several obstacles, including unclear trade and investment regulations, double taxation, and customs red tape.
The private sector did agree, however, that Cambodia had great investment potential given its rich natural resources, agricultural products and forests.
On top of that, as a developing country, Cambodia still enjoys Generalised System of Preferences (GSP) tariff benefits granted by several developed countries.
Thailand and Cambodia agreed in February this year, at the Joint Trade Committee meeting in Siem Reap, to draw up a "strategic road map" for enhanced economic partnership. The plan would cover three sectors _ trade, investment and tourism. It aims to double the number of tourists and investment by 2008.
Foreign investment in Cambodia from 1994, when the investment law was first introduced, until February this year totalled US$4.65 billion.
Malaysia topped the list with $1.93 billion, followed by China at $584.3 million, Taiwan at $509.2 million, the United States at $313.6 million, South Korea at $239.5 million, and Thailand at $212.9 million.
Tourism services was the most popular investment area, with $1.41 billion, followed by hotels ($618.7 million), textiles ($586.5 million), wood products ($456.3 million), and cement ($410 million).
Thai investment is mostly in hotels, cement, mining, and plastic production, with sugar and beer plants expected to start construction next year.
In 2005, Thailand was Cambodia's sixth-largest trade partner, with two-way trade valued at $951.6 million, or 0.4% of Thailand's total trade. Thailand enjoyed a trade surplus of $888.8 million over Cambodia last year.
In the first nine months of this year, trade between Thailand and Cambodia reached $958.4 million, a 26.2% rise from the same period last year, with Thailand recording a trade surplus of $916.5 million.
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