BGA Cambodia Managing Director Bora Chhay wrote an update to clients on recent trade negotiations between Cambodia and the United States.

Context

  • Cambodia and the United States held the second round of negotiations on the agreement on reciprocal trade in Washington, D.C., from June 4-6. Both sides engaged in constructive dialogue and accepted key provisions of the draft agreement.
  • This development reflects a strong bilateral consensus and marks significant progress toward finalizing the trade agreement before U.S. President Donald Trump’s reciprocal tariff pause ends July 8. Although the final outcomes remain to be seen, these negotiations lay a solid foundation for deepened trade cooperation and strengthened economic relations ahead of the next round of negotiations.

Significance

  • Cambodia issued a press release June 7 updating the public of the progress made during the second round of trade discussions, which were led by the Deputy Prime Minister Sun Chanthol and Commerce Minister Cham Nimul. The Cambodian delegation engaged with Assistant U.S. Trade Representative for Southeast Asia and the Pacific Sarah Ellerman and agreed to hold a third round of negotiations in the near future in Washinton, D.C. While the press release did not disclose specific details about the agreement or the discussions, it noted that “both sides continued to exchange views and discuss the draft agreement with great mutual understanding and reached agreement on substantial provisions” of the agreement.
     
  • Cambodia reaffirmed its commitment to deepen its economic partnership with the United States, aiming to foster a more equitable, balanced and mutually beneficial trade and investment relationship. Demonstrating its readiness to advance bilateral relations, Cambodia announced in April a significant tariff reduction on 19 categories of U.S. products from a maximum bound rate of 35 percent to an applied rate of 5 percent. This step underscores Cambodia’s commitment to building an open, rules-based and predictable trade environment that encourages long-term trade engagement.

Implications

  • Cambodia is upholding its commitment to prevent origin fraud and ensure transparency in following rules of origin for exports to the United States through two key measures issued April 30. An interministerial decree (No. 379) from the ministries of Economy and Finance and Commerce introduces preventive measures and urges exporters to obtain an origin certification letter. The Ministry of Commerce published a separate decree (No. 047) detailing procedures to apply for and issue the letters. This aims to strengthen monitoring mechanisms for local value content and ensure compliance with both Cambodian and U.S. rules of origin. Both decrees took effect May 12.
  • The Textile, Apparel, Footwear and Travel Goods Association in Cambodia has informed its members about export and customs requirements. Imported raw materials must be transported from the entry point to the factory along the route assigned by customs. Unauthorized rerouting will be treated as an attempt to smuggle duty-free materials and will result in penalties and the seizure of goods. Strict compliance is essential to avoid legal, financial and operational risks.

We will continue to keep you updated on developments in Cambodia as they occur. If you have any comments or questions, please contact BGA Cambodia Managing Director at bchhay@bowergroupasia.com.

Best regards,

BGA Cambodia Team

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Managing Director

Bora leads BGA’s practice in Cambodia. He is a highly regarded government affairs and public policy expert who helps clients resolve business issues, navigate regulatory and legal challenges, expand operations, explore new investment opportunities and enter Cambodia’s market.  Prior to joining BGA, Bora served for five years as a fast-moving consumer goods (FMCG) corporate and regulatory affairs professional. In this role, he helped transform his company’s government relations and corporate affairs unit into a more effective business-driven group. Notwithstanding Cambodia’s difficult and highly regulated macro environment, Bora played a key role in developing and executing government relations and corporate affairs ... Read More