Trade
Cambodia's export volume has increased over the years, suggesting the important role trade plays in economic development.
Global Integration
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2 min
Merchandise Trade of Cambodia
Since the 2000s, Cambodia has achieved exponential growth of trade volume, owing to trade agreements with foreign countries. It is worth noting that it was not until 2004 that Cambodia finally joined the WTO, simplifying exports and leading to growth of manufacturing as opposed to agriculture traditionally dominating the economy.
It is promising that Cambodia's total export value is similar to that of lower middle income countries. Increases in export volume have been fueled by foreign demand, which has been increasing because of the price competitiveness of Cambodian products. When compared to Cambodia's ASEAN neighbors, Cambodia's exports have followed an almost identical trajectory to Laos in recent years.
Trade balance
Imports are an important metric when compared to exports as it provides a measure called the trade balance, or net exports (trade balance = total exports - total imports). Cambodia's balance of trade is negative, but we note that so is the balance of many other ASEAN countries. It reveals that Cambodia does not play a big role in value added steps.
However, we also note that import measurements through cost, insurance, and freight contracts are frequently overvalued compared to export measurements through free on-board contracts.
Furthermore, negative balance of trade may also be, at least in some part, due to the necessary imports of equipment and resources developing countries undertake to maintain high growth in industries.
What is trade?
Merchandise exports show the value of goods provided to the rest of the world, measured in current U.S. dollars. Merchandise imports show the value of goods received from the rest of the world valued in current U.S. dollars.