EuroCham Cambodia launches White Book
Japan imposes restrictions on exports to South Korea over wartime labour row
THE European Chamber of Commerce in Cambodia (EuroCham Cambodia) has launched the third version of its White Book for 2019 to advise European investors doing business in the Kingdom.
The White Book is a set of recommendations on trade and investment policies compiled by EuroCham Cambodia. It will submit the book to the government for it to consider the regulatory and structural constraints faced in doing business in the Kingdom.
EuroCham Cambodia president Arnaud Darc said: “We envisage that over the coming year, the reforms that we seek through this book will enhance Cambodia’s business environment.
“This book will help drive more investment from Europe and other regions to Cambodia.”
The book was compiled under the guidance of a committee of experts from 10 sectors.
The sectors include investment protection, human resources, vehicles, customs, transportation and logistics, doing business, communication and information technology, green business, health, real estate and construction.
However, Darc also expressed his concerns about the possible suspension of EBA. He said suspension would affect the Kingdom’s economy.
“The suspension of EBA will limit Cambodia’s exports to the EU, including sports goods, bicycles and textiles,” he said.
Darc also noted that overreliance on
financial resources from China could pose a risk in the future.
“We cannot put all of our eggs into one basket, it is a risk to Cambodia. The financial flow from Chinese tourists could affect the Cambodian economy,” he said.
Council for the Development of Cambodia secretary-general Sok Chenda Sophea said the Kingdom is widely open to all investors, not only the Chinese.
“If there are no Chinese, who will build an expressway from Preah Sihanouk province to Phnom Penh? Do you have a problem that a Chinese company is building the expressway?
“I do not speak on behalf of the Chinese government. I am a diplomat,” he said during the book launch ceremony on Monday.
Chinese-owned Cambodian PPSHV Expressway Co Ltd has secured a project worth nearly $2 billion to build a 190km expressway from Phnom Penh to Preah Sihanouk province, which is scheduled to be completed by 2023.
China is Cambodia’s largest creditor, accounting for 48.4 per cent of the Kingdom’s total outstanding debt as of the first half of last year, according to a World Bank report.
China is currently also the Kingdom’s leading foreign investor. JAPAN on Monday imposed restrictions on exports used by South Korea’s chip and smartphone companies, ramping up long-simmering tensions between the US allies over the use of forced labour during World War Two.
Seoul quickly hit back, saying the measures violated international law and threatened to raise the issue at the World Trade Organisation.
The move raises the stakes in a protracted dispute over South Korean court rulings requiring Japanese firms to compensate victims of a wartime forced labour policy.
The disagreement comes against the backdrop of decades of strained ties as the result of Japan’s brutal 1910-45 colonial rule over the Korean peninsula.
The new measures take effect from Thursday and will significantly slow the export of several key materials used by South Korea’s chip and smartphone giants.
Japan said they were the result of a breakdown in trust with Seoul.
“The export control system is built based on international relations of trust,” Japan’s Ministry of Economy, Trade and Industry (Meti) said.
“After reviews by relevant ministries, it must be said that the relations of trust between Japan and South Korea have been significantly harmed,” Meti added.
‘Unfair’
The new restrictions apply to three chemicals as well as the transfer of manufacturing technologies, removing them from a list that effectively allowed expedited export.
It means that exporters will now have to apply for permission for each batch they wish to export to South Korea, a process that takes around 90 days each time, local media reported.
The chemicals affected by the move are fluorinated polyimide, which is used in the manufacture of displays, the photosensitising agent resist used in chip manufacture, and hydrogen fluoride, which is used to clean chips.
Meti said it would also begin soliciting public comment on the removal of South Korea from a list of “white” countries that face minimal restrictions on technology transfer with national security implications.
South Korean trade official Park Taesung called the measures “unfair and in violation of international laws”.
And Minister of Trade, Industry and Energy Sung Yun-mo said the government would “take necessary measures on the basis of domestic and international laws, such as bringing the case to the World Trade Organisation”.
But Japan’s deputy chief cabinet secretary Yasutoshi Nishimura told a regular briefing that the move was “in accordance with international export regulations and World Trade Organisation rules”.
“In addition to the fact that it has become difficult to work on export control with South Korea under a relation of trust, we have also seen inappropriate cases in connection with export control as it relates to South Korea,” he told reporters.
No winners
The measures come after a series of South Korean court rulings demanding Japanese firms compensate victims of wartime forced labour.
Japan has rejected the rulings and proposed the issue be put to arbitration under an agreement signed by the two countries when they normalised ties.
South Korea countered with a proposal for local and Japanese firms to set up a voluntary compensation fund, which Tokyo flatly rejected as “unacceptable”.
When relations were normalised, Tokyo agreed a reparations package of grants and cheap loans for victims of various wartime policies, which it says resolved all outstanding claims.
A South Korean industry source said local firms would likely have inventory that could last a couple of months, “after which production could be hit by shortages”.
“South Korean firms are largely dependent on Japanese firms for such materials . . . While we have tried to find alternative sources to diversify risk, it is not an easy task,” the source said.
The news sent shares in Samsung down 0.85 per cent, with LG Electronics plunging more than three per cent. In Japan, resist makers were also down sharply despite a gain in the market overall.
Yun Duk-min, former director of the state-run Korea National Diplomatic Academy, said the wartime labour dispute was hurting both sides.
“The bickering will leave both Tokyo and Seoul as losers in the end without a victor, damaging the two economically.”