China is the big winner in Cambodia’s new transit and transhipment agreement with Laos, a move that will help China simplify and ramp up its trade in agricultural products (including rubber) coming from the Southeast Asian country without having to go through Vietnam or Thailand.
Yesterday, Cambodia’s Minister of Agriculture, Forestry and Fisheries, Dith Tina, and Dr Linkham Douangsavanh, the Laotian Minister of Agriculture and Forestry, were on hand to sign the agreement in Phnom Penh, Cambodia’s capital, paving the way for exporters to avoid Vietnam and Thailand.
“Transportation procedures through Vietnam and Thailand make land exports to China complicated, time-consuming, and expensive,” according to Kong Vimean, a spokesperson for Cambodia’s Ministry of Public Works and Transportation, who spoke of the bilateral talks last year. “Consequently, the Chinese companies requested the relevant ministry to carry out a legal study so that they could purchase agricultural products from Cambodia and import them via Laos.”
Could the new deal open new routes for “gray wood”
As it stands, there is no legal way for raw logs, sawn timber, or furniture to be traded between Cambodia and China, following decisions to stamp out illegal logging and heavily restrict sawn wood exports; however, Global Witness and the Environmental Investigation Agency (EIA) have both repeatedly warned that large volumes of “gray wood,” used in furniture have found itself in China using Vietnam as a secondary port.
Beyond transit, officials say the new agreement has identified several areas for further cooperation, including the potential for Laos to supply fertiliser to Cambodian farmers to improve seed production, whilst the ministers also discussed upgrading quality standards and enhancing the regional investment climate through joint agricultural exhibitions.
And then there is fire prevention in forests, with new research showing that drier, more fragmented conditions in Cambodia’s forests mean it now has a greater than 50% chance of a major wildfire in any given year.
- To learn more about China’s grip on the trade of timber through Asia and around the world, click here for Wood Central’s special feature.
