Reliance, India’s largest player in polyester value chain, has decreased prices of purified terephthalic acid (PTA) and MELT, but increased price of monoethylene glycol (MEG). It has reversed its decision on pricing from last week. RIL reviews global market, price trends in China and fluctuations in crude oil to determine prices of polyester raw materials. Indian market follows the price trend of Reliance as it is the dominating player in the country. According to market sources, RIL fixed PTA price at ₹79.90 per kg (-1.80), MEG at ₹53.20 per kg (+1.50) and MELT at ₹86.80 per kg (-1.04). New pricing of polyester raw materials will come into effect from Saturday. The company had cut the price of polyester staple fibre (PSF) by ₹3 per kg to ₹102 per kg. The lower price is effective for the current fortnight that began on November 16.
Source: Fibre2Fashion
The ongoing marriage season and the upcoming Pongal festivities have buoyed the prospects of the Surat-based man-made fabric (MMF) hub in the wake of fresh orders from the domestic market. Most of the textile units situated at Surat had shut their activities for almost a fortnight after Diwali in absence of new orders. Generally, these units remain closed for three to five days after Diwali, but this year the units forced daily wage workers to proceed on unpaid extended Diwali vacation. “Textile industry in Surat started operations from November 7. After a week’s period, business activities are resuming. Due to fresh orders, traders are able to offload inventories. Though demand is not as per our expectations, the market seems to be on a revival path. Apart from marriage season related purchases, inquiries are being generated from Southern India in the wake of Pongal festivities,” says Dev Kisan Mangani, advisor, textile committee, South Gujarat Chamber of Commerce and Industry (SGCCI). According to Mangani, compared to last year demand is almost 30 to 35% less but Surat-based textile units are hoping the market would stabilise by February next year. Nearly 300-plus textile markets situated in Surat observed an increase in footfalls as well as fresh inquiries over the last one week, he added.
Source: The Financial express
Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today said that India is a bright shining spot in the world economy amidst global economic uncertainty. He was addressing the 21st World Congress of Accountants in Mumbai. Union Commerce Minister said that India has demonstrated that despite the prevailing volatility, uncertainty, complexity, ambiguity in the world, our country has the leadership, capabilities and the skill that is required to navigate the economic recovery. “Despite the pandemic challenges, very reasonable measures were taken to sustain the Indian economy where a strong focus was on the macroeconomic fundamentals. Our Government focussed on inclusive well-being of all sections of society.” The Union Commerce Minister said that the world today is looking up to Indian economy to steer growth and to show the way. “The world recognises India’s strong economic fundamentals, demographic dividend, an unmatched consumer base, skillsets and management abilities of India’s youth.” Speaking about the G-20 presidency, the Commerce Minister said that our theme for the G20 Presidency is ‘Vasudhaiva Kutumbkam’. “India believes that the world is one family. India cares for the whole world and it is in this context that we have placed the theme of our Presidency as One Earth, One Family, One Future. While the world focuses on consumption led growth, India focuses on sustainability and respects nature. India believes in inter-generational equity and that it is incumbent on each one of us to leave behind a better planet than the one we have inherited.” The Union Minister said that we are working with a vision to make India a developed nation by 2047 and to take prosperity to every Indian. “Prime Minister Shri Narendra Modi and the people of India have envisioned a future where we wish to see India a developed nation as we celebrate 100 years of Independence”. Addressing the Chartered Accountants at the World Congress of Accountants, the Union Minister said Chartered Accountants are custodians of this vision. “CAs will be required to validate the progress of this mission, to recognise whether all that is promised and agreed amongst nation, is being implemented. We certify the true and fair picture.” He added “In the global economic recovery as the world prepares itself for better energy security, food security, as we see the future where innovation and technology is going to drive growth, it is the responsibility of all of us as CAs to work with the Government & Institutions”. The 21st World Congress of Accountants 2022 is being hosted by The Institute of Chartered Accountants of India in Mumbai in Hybrid mode. This theme for the WCOA 2022 is ‘Building Trust Enabling Sustainability’.
Source: The Pib
Appointments Committee of the Cabinet (ACC) of Ministry of Personnel, Public Grievances and Pensions, Department of Personnel and Training (DoPT) on Saturday posted senior IAS officer of J&K cadre, now part of AGMUT, Rohit Kansal as Additional Secretary, Ministry of Textiles. Kansal, who was holding the posts of Principal Secretary Higher Education and Information, J&K, was empanelled to hold the post of Additional Secretary or equivalent in April 2021 before being cleared for central deputation yet again. He also served as Administrative Secretary Power Development Department during his nine-year eventful stint in J&K following his return from central deputation in 2013. His affable persona helped him a great deal to emerge as a great coordinator between media and administration and an ever-accessible interface between the administration and general public while helming different departments “Rohit Kansal, IAS (UT:95), presently in the cadre, as Additional Secretary, Ministry of Textiles,” read ACC order. Yet another senior IAS officer of J&K cadre (now part of AGMUT) Shantmanu (UT: 91), presently on central deputation as Development Commissioner (Handicrafts), Ministry of Textiles has been posted as Additional Secretary & Financial Advisor, Ministry of Consumer Affairs, Food and Public Distribution. In a related development, senior IAS officer of J&K cadre, Manoj Kumar Dwivedi, already on central deputation as Joint Secretary in the Ministry of Personnel and Training, was promoted as Additional Secretary.
Source: The Greater Kashmir
Countries negotiating free trade agreements (FTAs) need to keep in mind eight "myths" which surround these pacts, like they lead to accelerated increase in exports and promote domestic manufacturing, according to a report by think-tank GTRI. The report by Global Trade Research Initiative (GTRI) claims to dispel these 'myths', including that FTAs weaken the WTO (World Trade Organisation), countries are rushing to do FTAs, and these pacts promote investment and lower prices. It is "erroneously" believed that most world trade happens through the FTA route, but in reality, it is less than 20 per cent, said the report titled 'FTAs: Fabulous, Futile, or Flawed?'. It is also not true that countries world over are rushing to do FTAs and in fact these pacts are "enthusiastically" embraced mainly by east Asian economies or countries that have lowered their customs duties close to zero. "Major industrial countries/regions do FTAs selectively. The USA has no FTA with significant economies like the European Union, China, Japan, ASEAN (Association of Southeast Asian Nations), or India. The EU currently has 41 trade agreements. But these represent just 32 per cent of the EU's external trade. Most of its FTAs are with raw material suppliers and small countries," it noted. While the FTAs have potential, they could not dent the multilateral trading system as far as standard trade instruments like tariffs are concerned, as about 83-85 per cent of the world trade takes place outside these pacts and under the WTO rules. On the myth that FTAs lead to accelerated increase in exports, it said that since less than 20 per cent of world trade is happening at concessional customs duties, India needs additional strategies to promote 80 per cent of trade outside this route. "Also, the mere signing of an FTA does not guarantee an increase in exports. Chances of an increase in exports due to the signing of FTAs are low if import duties in the partner country are low. From this count, FTAs are of minimal use for increasing exports to Singapore, or Hong Kong, as regular (Most Favoured Nation) import duties are zero," it said. Trade agreements with Malaysia, Japan, Australia, New Zealand and Brunei benefit only a few product groups as most imports into these countries happen at zero duty. "The share of ASEAN in India's export was 10.4 per cent in 2010, the year of the signing of the agreement. The share has remained almost the same, even after over a decade. "During this period, India's deficit with ASEAN has expanded from USD 6.7 billion to USD 24.2 billion. A quantum jump in India's export will require enhancing competitiveness at all levels and changing the product profile of Indian exports," it pointed out. Further, it said zero-duty imports of finished goods from the FTA partners may disrupt many domestic manufacturing programs. "The US has an active Make in USA programme...In India, programmes like Production Linked Incentive Scheme (PLI), Phased Manufacturing Performance (PMP) recommend zero or low-duty import of inputs and high duty on finished goods to support indigenous production," it added. The report further said there is mixed evidence that these agreements promote investments and lower prices in the respective countries that are entering into the pact. Former Indian Trade Service officer Ajay Srivastava is the co-founder of GTRI. He took voluntary retirement from the Government of India in March 2022. He has rich experience in trade policy making, and issues related to the WTO and FTAs. He was involved in the negotiation process of India's free trade agreements with Japan and Australia.
Source: The Economic times
India will still grow at 6-7 per cent in the next 2023-24 fiscal even as the economy may be affected by uncertain global conditions, former Niti Aayog Vice-Chairman Rajiv Kumar has said amid growing fears of the world slipping into a recession. Kumar further said there is a synchronized downturn in the US, Europe, Japan and also in China and that could take the global economy into a recession in the coming months. "Thankfully, there is no such prospect of recession in India, because although our growth may be negatively affected by the global conditions, we will still manage to grow at 6-7 per cent in 2023-24," he told PTI in an interview. The World Bank on October 6 projected a 6.5 per cent growth rate for the Indian economy for 2022-23, a drop of one percentage point from its June 2022 projections, citing the deteriorating international environment, while IMF projected a growth rate of 6.8 per cent in 2022 as compared to 8.7 per cent in 2021 for India. IMF chief Kristalina Georgieva has said the global economy is moving from a world of relative predictability to one of greater uncertainty. Replying to a question on high inflation, Kumar said retail inflation will probably be in the range of 6-7 per cent for some more time. "After that, my estimate is that it should begin to peak and then come down," he said. Kumar added that depends a lot on global oil prices as it can continue to rise because of the continued conflict in Ukraine. "But otherwise domestic drivers of inflation will cool down," he noted. Indicating easing of the price situation, retail inflation moderated to 6.7 per cent in October while the wholesale price index fell to a 19-month low mainly on account of subdued rates of food items. The central bank is mandated to keep inflation at 4 per cent with 2 per cent of upside and downside margins. Asked about the impact of a weakening Indian rupee on the common man, the former Niti Aayog vice chairman said the common Indian does not use a lot of imported goods or services in their consumption basket. According to Kumar, the rupee which is near its real value is much better for the economy than the appreciated rupee and depreciated rupee doesn't pose many downside risks. The rupee depreciated 6 paise to close at 81.74 against the US dollar on Friday. On India's widening trade deficit, Kumar said with the negative growth of exports in October, it is clear that the country needs a real policy focus on this area on how to expand its exports of both goods and services. "We need to now formulate state-specific export promotion policies. Because to have one single export promotion policy for the whole country does not make sense," he said. Elaborating further, he said that like Punjab is a double landlocked state and Tamil Nadu is a coastal state, and it has centuries of trading experience. "So, to have the same policies of both those states, for example, is not relevant," he emphasised. India's exports entered negative territory after a gap of about two years, declining sharply by 16.65 per cent to USD 29.78 billion in October, mainly due to global demand slowdown, even as the trade deficit widened to USD 26.91 billion. Imports during the month under review rose by about 6 per cent to USD 56.69 billion on account of increase in the inbound shipments of crude oil and certain raw materials such as cotton, fertiliser and machinery. Responding to a question on some states switching to the old pension scheme (OPS), Kumar said, "That's a backward step. and I don't think that should be taken." He opined that it is being advocated by some opposition parties because of populist measures. "I think the Indian economy, the Indian working class, Indian middle class is maturing and can handle their own pension funds and take advantage of the new pension scheme, which offers much more choices than the old pension scheme," Kumar said. Punjab cabinet on Friday approved the reimplementation of the old pension scheme, which was discontinued in 2004.
Source: The Business-Standard
India is likely to post a 6.5 per cent to 7.1 per cent economic growth during the current financial year 2022-23 amid rising inflation and impending global slowdown, Deloitte India said in a report. The persistent inflation has challenged policymakers over the past few months. Despite the Reserve Bank of India (RBI) raising interest rates by 1.9 percentage points since April 2022, inflation has remained above its tolerance range for over 9 months now. To add to this, the runaway dollar is causing import bills to soar and further pushing inflation up. An impending global slowdown or even a recession in a few advanced nations as early as the end of 2022 or early next year is likely to make the situation worse. "The seemingly unending saga of global economic uncertainties has begun to negatively impact India's main drivers of growth. So volatile is the current economic environment that if one is looking for certainties from the recent data releases, it is unlikely that a consistent outlook will emerge," Deloitte said. Deloitte expects "India to post a 6.5-7.1 per cent growth during FY2223 (April 2022 to March 2023) and 5.5-6.1 per cent the following year contingent on the revival of the global economy and improving economic fundamentals." India's gross domestic product (GDP) grew by 8.7 per cent in the 2021-22 fiscal year. "We expect the upcoming festive season could give a much-needed boost to the consumer sector, which has not yet shown a sustained revival. Credit growth in the industry and services sector has also risen remarkably, suggesting that prospects for capex investments by the private sector are brighter. "Sustained demand growth may be the most-awaited cue for a sustained push for investment. Exports and government spending may not support growth as much owing to moderating global demand and limited resources at disposal, respectively," said Rumki Majumdar, Economist, Deloitte India. Downside risks of higher inflation and commodity prices, and currency depreciation are significant. "We expect global prices to ease by mid-2023 owing to a possible moderation in crude oil and industrial raw material prices, thereby easing pressures on domestic inflation," Deloitte said. The RBI's emphasis to anchor inflation expectations by tightening credit conditions may also thwart the spiralling of prices. "However, the fall in prices may be short-lived if a sustained demand improvement exceeds supply (given the low investment and capacity building for a prolonged period), leading to overheating of the economy," it said. "Similarly, despite easing commodity prices, the current account may remain a concern as India's growth path will likely defy the global slowdown, resulting in higher imports than exports." The unknown, however, is the rupee value against the US dollar. The Indian rupee's depreciation against the greenback is more due to the appreciation of the latter owing to the flight to safety among global investors amid global uncertainties. "The domestic currency is appreciating against the euro, pound, and yen, suggesting that the macroeconomic fundamentals of the Indian economy remain strong," Deloitte said, adding the path to recovery has been lengthier than expected at the start of the year. "There are too many variables that blur the outlook, and we will likely have some clarity over the next few months as we assess the energy crisis in Europe and the slowdown in China and the US," it said.
Source: The Business-Standard
Khadi is one of the vital segments of the Indian textiles sector. This type of cloth is woven from hand-spun and hand-woven yarn with cotton, silk, and wool fibres. A handcrafted Khadi cloth has a unique weave since each piece is self-textured by artisans. To replace foreign products and materials with domestically produced ones and to create jobs locally, Mahatma Gandhi started weaving Khadi as part of the Swadeshi Movement in 1918. As Khadi became an ideology of independence after 1947, its significance flourished in spinning and weaving.
The KVIC
The Khadi and Village Industries Commission (KVIC) was established in 1957 under the ‘Khadi and Village Industries Commission Act of 1956’ of the parliament. It was established as a statutory body to oversee development of Khadi under the Ministry of Micro, Small and Medium Enterprises (MSMEs). According to the act, the organization sought to "plan, promote, facilitate, organise and assist in the establishment and development of Khadi and village industries in the rural areas in coordination with other agencies engaged in rural development wherever necessary."Keeping the traditions alive and working towards the promotion of the fabric, the Indian government, over the years, has set up multiple initiatives that made it a reality. Khadi production and sales in India have grown significantly over the last five years (between FY17 and FY21). Khadi production in FY21 was Rs. 1,904.5 crore ($255.8 million), up from Rs. 1,520.8 crore ($204.3 million) in FY17, a 5.8 percent CAGR, according to a report from India Brand Equity Foundation (IBEF) that cited MSME ministry and KVIC data. As compared to FY17, Indian Khadi sales increased by 13.2 percent between FY17 and FY21, reaching Rs. 3,527.7 crore ($473.9 million). Khadi products in India contribute greatly to the creation of employment opportunities for artisans, particularly in rural areas. Aatmanirbhar Bharat, and ‘Make in India’ are among the initiatives associated with the sector's development. Additionally, employment in the sector increased by 2 percent from 4.56 lakh artisans in FY17 to 5 lakh artisans in FY21. Despite the COVID-19 pandemic crippling businesses across the country, the sales of Khadi products have been surging. This has been thanks to KVIC’s e-commerce launch in July 2020. The launch with over 700 products led to the portal crossing 1 crore gross online sales within eight months of its operations. KVIC was able to deliver over 1 lakh products to more than 10,000 customers out of the 65,000 visitors to the portal. According to the Ministry of MSME, KVIC clocked a massive turnover of Rs 1.15 lakh crore, in 2021-22, which is "unprecedented by any FMCG company in the country". KVIC's overall turnover in FY 2021-22 was Rs 1,15,415.22 crore as compared to Rs 95, 741.74 crore the previous year. This represents a growth of 20.54 percent over 2020-21. The massive turnover in KVIC has occurred despite a partial lockdown of the country from April to June in 2021 due to the second wave of Covid-19.
Reasons for growth
In a statement released by the Ministry of MSME earlier this year, KVIC Chairman Vinai Kumar Saxena attributed Khadi’s phenomenal growth to the constant support of Prime Minister Narendra Modi to promote Khadi in the country. "Today Khadi stands far ahead of all FMCG companies in the country. By employing new scientific methods and diversifying Khadi’s product range, KVIC has succeeded in achieving such massive growth which no other FMCG company can match," he said. At the same time, innovative schemes, creative marketing ideas and active support from various ministries have also added to the Khadi’s growth in recent years. The government's push to adopt Swadeshi products as well as the setting up of new PMEGP (Prime Minister Employment Generation Programme) units have reportedly played a vital role in the rise of Khadi. Prime Minister Narendra Modi's pronouncements of "Aatmanirbhar Bharat" and "Vocal for Local" have been enthusiastically received. As of late, KVIC has focused on creating sustainable employment for unemployed artisans and youths. In response to economic hardship, many youths took advantage of self-employment and manufacturing under PMEGP. This increased production in the village industry sector, with sales of Khadi and village industry products growing significantly following the Prime Minister’s appeal to buy Indian products.
Source: The Money control
Apparel exports from UK to Israel did not get a boost even after the Trade and Partnership Agreement between the 2 countries came into effect on January 1, 2021. Exports had peaked in 2020 at $291.136 million but slipped to $138 million in 2021. Exports remained slow in the current year too, recording $33.639 million in the first nine months of 2022. UK’s apparel exports jumped to $291.136 million in 2020 from $13.033 million in 2019 and were recorded at $10.151 million in 2018 and $11.235 million in 2017. On a quarterly basis, they declined to $52.063 million in Q1 2021 from $214.224 million in Q4 2020. Exports further slipped to $4.923 million in Q3 2022. The figure amounted to $9.054 million in Q2 2022, $19.661 million in Q1 2022, $21.447 million in Q4 2021, $28.804 million in Q3 2021 and $35.821 million in Q2 2021, according to Fibre2Fashion’s market insight tool TexPro. UK’s imports of apparel from Israel improved slightly in 2021 after the agreement. However, the inbound shipment was negligible compared to exports. Basically, UK is an apparel exporting country for Israel. The imports rose to $7.629 million in 2021 from $5.491 million of 2020. They were at $5.804 million for the first nine months of this year, as per TexPro.
The Trade and Partnership Agreement between the United Kingdom and Israel (Goods) entered into force on January 1, 2021. With tariff liberalisation commitments already implemented, the UK maintains tariffs on 4.4 per cent of tariff lines while Israel maintains tariffs on 6.2 per cent. The agreement also incorporates provisions on government procurement, competition, environment and labour and establishes cooperation on other issues, the World Trade Organization (WTO) said in a press release. The WTO members had considered five regional trade agreements (RTAs), including the UK-Israel agreement, at the November 14 meeting of the Committee on Regional Trade Agreements. Israel said the UK was its sixth largest destination for exports and ninth largest source of imports in 2021, adding that both parties have launched further negotiations for a modern and comprehensive free trade agreement to include new areas not covered by the current agreement. The UK said Israel was one of its most important trading partners in the Middle East and its 39th largest trading partner globally. The UK said it looks forward to working closely with Israel to enhance their trading relationship.
Source: Fibre2Fashion
The Department of Trade and Industry (DTI) over the weekend said it is optimistic that the Philippine Senate would ratify the Regional Comprehensive Economic Partnership (RCEP) by December. In an interview, Trade Secretary Alfredo Pascual said the free trade agreement (FTA) would hopefully be finalized by lawmakers within 2022 after years of negotiations. “We hope to see the ratification of RCEP by the Senate by the end of the year, hopefully,” he told GMA News Online on the sidelines of the Asia Pacific Economic Cooperation (APEC) Summit here.
Source: The Gmanetwork
Europe’s apparel imports from China have been falling since July-September 2021, but the pace of decline increased in April-June quarter of this year. The trend is reflecting the economic challenges faced by Europe due to the Ukraine war after the disastrous pandemic. The imports came down to $6.089 billion in Q3 2022 from $11,326 billion in Q3 2021. Europe’s imports from China of $11.326 billion in the July-September 2021 quarter were the highest in the last six quarters. They spurted in April-June 2021 quarter after the COVID wave to reach $6.308 billion but began to ease in the following quarter. The inbound shipment declined to $11.252 billion in October-December 2021. They recorded a steep fall in January-March 2022 to reach $9.663 billion. The imports further dropped to $7.225 billion in April-June 2022 and $6.089 billion in July-September 2022, according to Fibre2Fashion’s market insight tool TexPro. Annually, European imports from China were at $37.055 billion in 2021, $36.607 billion in 2020, $37.224 billion in 2019, $39.863 billion in 2018 and $38.969 billion in 2017. The region imported apparel worth $22.978 billion in the first nine months of the current year.
Source: Fibre2Fashion
Cambodia has identified free trade agreements (FTAs) as a way forward to enhance its trade competitiveness and market potential for its various products across the world. The country has been actively engaged in forging bilateral and multilateral FTAs with a view to accessing wider markets across the world. Cambodia’s entry into the Regional Comprehensive Economic Partnership (RCEP) and its free trade agreements with China and South Korea are expected to further enhance its trade potential in the international arena. Several international agencies have already predicted good economic growth for the country in the coming years, thanks also to its encouraging approach to FTAs. According to the estimates of the International Monetary Fund (IMF), Cambodia’s economic growth is expected to be robust this year and the next couple of years, due to free trade agreements and the high vaccination rate.
Boosting trade
In its Regional Economic Outlook Report for Asia and Pacific: Sailing into Headwinds, the IMF said Cambodia’s growth is projected at 5.1 percent in 2022, 6.2 percent in 2023 and 6.6 percent in 2024.
Davide Furceri, deputy division chief of the IMF’s Regional Studies, Asia and Pacific Department, said the RCEP and the Cambodia-China Free Trade Agreement have also given a boost to these growth rates. “Regarding the trade agreements, I think this is a good step for many countries to the extent it signals international cooperation more broadly,” he said in a press conference.“So, I think the participation in the RCEP is a good step not only for the short term but also for the medium term,” Furceri added. After the success of its bilateral FTA with China, Cambodia has also entered into an FTA with South Korea. Earlier this month, Prime Minister Hun Sen announced that the Cambodia-Korea free trade agreement would come into force in December this year.
The Kingdom has already signed a bilateral FTA with China.
Talking about the significance of FTAs, Penn Sovicheat, under-secretary of state at the Ministry of Commerce, told Khmer Times recently: “When we have bilateral free trade agreements with many countries including China, Korea, and Japan, it is a positive sign to our economy and products.” The new bilateral agreement is expected to accelerate the economic recovery following the adverse effect of the Covid-19 pandemic. According to experts, the agreement will help provide market access to Cambodia for its different products. Some of Cambodia’s main exports to South Korea include footwear, apparel, travel, beverages, electrical and electronic components, rubber, pharmaceuticals and agricultural products. On the other hand, the major imported items for Kingdom are vehicles, electronics, kitchen appliances, beverages, pharmaceuticals, finished plastics and products.
The two countries have already ratified the free-trade agreement.
The bilateral trade between Cambodia and South Korea rose 13.8 percent year-on-year to $818 million in the first nine months of this year, according to a report from the Korea International Trade Association (KITA). Cambodia’s export surged 19.6 percent to $301 million as compared to the same period last year.
Eyeing more FTAs
Senior Commerce Ministry officials said the country has plans to make negotiations on bilateral FTA establishment with several countries, including Japan, India and Mongolia. Recently it held the initial round of talks with the United Arab Emirates for a Comprehensive Economic Partnership Agreement.
The first round of negotiation was held recently in Abu Dhabi.
On November 14, a consultation meeting was held at the Commerce Ministry, featuring officials and top businesspeople regarding the likely contents of the Cambodia-United Arab Emirates Comprehensive Economic Partnership Agreement (CAM-UAE CEPA). The bilateral trade between both countries rose 52.66 per cent to $151.547 million in 2021 compared with the previous year’s trade figures. While Cambodia’s exports rose more than 18 percent to $52.116 million, its imports surged 79 percent to $99.431 million. Both the Cambodia-China Free Trade Agreement (CCFTA) and
the RCEP came into force on January 1, 2021.
Broad range of motivations
Talking about Cambodia’s growth prospects related to FTAs, Jayant Menon, Senior Fellow with ISEAS-Yusof Ishak Institute in Singapore, told Khmer Times in an exclusive interview recently: “Cambodia is keen to negotiate a lot of FTAs, and it is not a bad thing. FTA is not just about trade or economics. It’s about strengthening relationships, political ties, and so on. So, there’s a very broad range of motivations for these FTAs.”
He also termed RCEP as a very important agreement for Cambodia. “The agreement extends Cambodia’s engagement beyond ASEAN to include the big players in East Asia, especially China, Japan, and Korea,” Menon explained. Terming the pull out of India from the partnership “unfortunate”, he said Cambodia can still engage bilaterally with India. Menon said FTA is a stepping stone, not an end, especially for developing countries like Cambodia. “You should look at trying to use FTA to globalise and not just regionalize. So, it should try and eventually find a way for multilateral FTAs. So, instead of managing each and every FTA, which has its own special tariff rates, special rules of origin and other legal requirements at some point in the future, they should try and consolidate all these FTAs and harmonize them to have a standard set of rules of origin, a standard set of preferential tariffs, and has multilateralism,” he said. Menon also pointed out that signing FTAs doesn’t automatically guarantee open regionalism. “An open regionalism is in the interests of Cambodia because it maximizes the benefits and also it minimizes the cost of administering multiple FTAs. In a country with limited human resources and capacity, it is particularly important,” he said. Apart from FTAs, Menon felt Cambodia has chances to progress in the future, considering several geopolitical developments. “There’s a lot of restructuring going on, especially with the US-China trade war, but also as a result of China’s prolonged zero COVID policy. There are a lot of firms that are looking for alternatives to the China+1 strategy. China itself is looking to invest in the region and move out of China. Some Chinese firms are moving out of the country. So far, the main beneficiary has been Vietnam. Cambodia can also try and tap into some of that.” He said some of the sectors that have growth potential for the country would be the global supply chain of electronics and automotive parts.
Cambodia exports surge
The favourable trade agreements and RCEP has helped Cambodia’s exports as well. According to the latest figures, Cambodia exported $18.74 billion worth of goods in the January-October period of 2022. It marked an increase of almost 20 percent when compared with the same period in 2021, according to the General Department of Customs and Excise report. The US continues to be the biggest market for Cambodia’s products as it imported $7.6 billion worth of products from Cambodia during the period.
RCEP impact
A recent report indicated that the large export potential for Cambodia is in implementing the RCEP commitments and undertaking deeper structural reforms to align the domestic economy with regional integration. The RCEP comprises 15 Asia-Pacific countries including 10 ASEAN member states, namely Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, and their five trading partners, namely China, Japan, South Korea, Australia and New Zealand. According to the Jakarta-based Economic Research Institute for Asean and East Asia’s (ERIA) study, RCEP’s impact of a 9.4 percent increase in exports could have an annual growth impact of two percent on GDP and 3.2 percent increase in employment. The higher impact of an 18 percent increase in exports on the domestic economy can translate into a 3.8 percent increase in GDP and a 6.2 percent increase in employment. The study said the progressive market-based reforms in Cambodia in both manufacturing and services have been successful in lifting the country closer to the next stage of growth. Cambodia has to maintain progressive market-based reforms in the post-pandemic recovery for deeper regional integration with the framework provided by RCEP, it pointed out. One of the authors of the paper, Shandre M Thangavelu of the Jeffrey Cheah Institute on Southeast Asia, Sunway University, Malaysia, told Khmer Times that the structural transformation of the Cambodian economy is critical to shift and position its manufacturing activities to higher value-added activities in the global production value-chain. “Currently, the manufacturing sector is not diversified and concentrated in garment and textiles, but the overall manufacturing activities are showing signs of shifting to higher value-added activities such as parts and components and transport,” he said. Workers in a garment factory in Phnom Penh. The manufacturing activities are showing signs of shifting to higher value-added activities. KT/Chor Sokunthea
Important achievement
Prime Minister Hun Sen recently said that the RCEP trade pact would be a booster for regional trade and greater economic integration in the post-COVID-19 pandemic era. The Premier said that the mega-regional trade deal marked an important achievement for ASEAN as the bloc has been keeping up with its efforts to open up the economy and diversify its regional markets. “I firmly believe that this huge free trade agreement will boost trade activities both inside and outside of ASEAN, as well as promote broader regional economic integration,” he said. “As a member of the RCEP, Cambodia reaffirms its commitment to the rule-based trading system and welcomes all businesses and investments from the ASEAN countries and other partners,” he added.
Proposed FTAs
As per a report from the Asia Regional Integration Center, some of the proposed/under consultation FTAs involving Cambodia include the East Asia Free Trade Area (ASEAN+3), ASEAN-EU Free Trade Agreement, Comprehensive Economic Partnership for East Asia (CEPEA/ASEAN+6), ASEAN-Pakistan Free Trade Agreement, ASEAN-Eurasian Economic Union Free Trade Agreement, and Cambodia-Eurasian Economic Union FTA. Meanwhile, negotiations have been launched for the ASEAN-Canada FTA. The FTAs that have been signed and in effect include the RCEP, ASEAN Free Trade Area, ASEAN-Republic of Korea Comprehensive Economic Cooperation Agreement, ASEAN-Japan Comprehensive Economic Partnership, ASEAN-India Comprehensive Economic Cooperation Agreement, ASEAN-Hong Kong, China Free Trade Agreement, ASEAN-People’s Republic of China Comprehensive Economic Cooperation Agreement, ASEAN-Australia and New Zealand Free Trade Agreement and Cambodia-People’s Republic of China Free Trade Agreement, it added.
Source: The Khmertimeskh
The Sustainability Leadership Award on Thursday was added to the success of the week-long celebration of textile Made in Bangladesh at International Convention Center Bashundhara in Dhaka, said a press release. The award was jointly organized by BGMEA and the Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH, which is supporting the German Government in achieving its objectives in the field of international cooperation for sustainable development. The awards were presented in the three categories ‘Social Compliance’, ‘Environmental Excellence’ and ‘Innovation’ which were divided into nine subcategories. ‘Social Compliance’ winners excel in women empowerment at the workplace, social initiatives in factory neighborhoods and overall social setup. ‘Environmental excellence’ was achieved by factories that lead in water efficiency, recycling of textile waste materials or overall environmental setup. In addition, innovative practices were rewarded. The subcategories included innovations for business development, worker welfare and the future. Under ‘Social Compliance’ category Vintage Denim Studio Ltd was the winner and Echotex Limited the runner-up for the ‘Most Convincing Factory setup’. For ‘Women Empowerment at the workplace’, Ananta Garments Ltd became the winner and Pacific Jeans Ltd became runner-up. And for ‘Best supported social initiative in the Neighborhood of a factory’, Epyllion Knitwear Ltd was the winner and Flamingo Fashions ltd was runner-up. Under ‘Environmental Excellence’ category, Envoy Textile Ltd was winner and Zaber and Zubair Fabrics ltd were runner-up for ‘Environmental Champion’. For ‘Water use reduction over year’, Color City ltd was the winner and Universal Jean ltd was runner-up. For ‘Recycle of textile waste materials’, Matin spinning mills ltd and SIMCO Spinning and textile ltd both became winner and Karupannya Rangpur ltd was runner-up. Under ‘Innovation Excellence’ category, Karupannya Rangpur ltd was the winner and J.M. Fabrics Ltd was runner-up for ‘Best Innovation from the Business Perspective’. For ‘Best innovation for future’, Beximco Recover was the winner and Jinnat Fashions Ltd was the runner-up. And Square Fashion ltd was the winner and SQ Celsius ltd was runner-up for ‘Best innovation for workers welfare’. Jatiya Sangsad speaker Shirin Sharmin Chaudhury attended the program as chief guest. BGMEA president Faruque Hassan said, ‘Bangladesh is globally acclaimed for its exemplary strides in workplace safety and leadership role in the area of sustainability in the RMG industry. I believe while the Sustainability Leadership Award recognizes the best practices of Bangladeshi garment factories in environmental, social, and innovation areas, it will inspire others to adopt sustainable practices to strengthen the image of Made in Bangladesh in the global market as modern, safe, and green.’
Source: The Newagebd
Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has expressed concern over the decline in textile exports, which dropped by 1.34% year-on-year to $5.941 billion in the first four months (Jul-Oct) of current fiscal year. In a statement, PHMA North Zone Chairman Naseer Butt underlined the need for continuing the Duty Drawback of Local Taxes and Levies (DLTL) scheme to ensure export growth, besides releasing the stuck drawback claims of 2019-20. The DLTL scheme proved to be a lifeline for the value-added textile industry, resulting in a high growth in knitwear exports in the previous fiscal year, said the PHMA leader. “A halt to the scheme will promote exports of raw material without value addition.” He highlighted that the previous government had committed to continuing the scheme but could not fulfill its promise and similarly the present government failed to re-launch the fruitful scheme. He emphasised the need for taking solid steps and ensuring consistency in policies to arrest the decline in exports. “The knitwear industry is highly labour-intensive and the emerging textile economies like Bangladesh and Vietnam have registered a stellar growth by simply supporting this industry,” remarked the PHMA leader. He suggested that the value-added textile exports should go up to get rid of the external debt and dictates of the IMF and other international financial institutions. He was of the view that the value-added textile sector was not only a source of foreign exchange for the country but also employed millions of people. He called for maintaining the electricity and gas prices for the textile industry over the next year to sustain export growth. “The government should continue the regionally competitive power tariff for the export-oriented sector to help lift exports,” he said. “These rates should continue till at least FY23 to ensure sustainability as the textile sector contributes significantly to the national exports,” he said. “If the sector gets no relief, it will ultimately impact the overall economy.”
