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Brexit may hit Cambodia hard

Cambodia could be the biggest sufferer among developing economies as a result of Brexit. Cambodia’s garment industry is a major supplier to the UK fashion industry and it has favorable entry terms. But with the UK being one of the top three economies in the EU and a huge consumer market for fashion, tariff-free access to its roughly 60 million people will be cut off at least temporarily in the event of a no-deal Brexit.

Cambodia has the biggest trade with the UK of all the 49 least-developed countries that can export to the EU without any tariffs and 7.7 per cent of its exports go to Britain. So the UK has to reach some kind of agreement with the 49 countries as not doing so could seriously disrupt its own economy.

However, it’s unlikely any agreement will be reached fast enough to completely remove the chance of damaging disruption either to the UK or to the millions of workers in Cambodia’s garment sector. The European Union accounts for 40 per cent of all Cambodian exports. These exports have risen sharply in recent years, increasing by 227 per cent between 2011 and 2016.

The EU is Cambodia’s main export destination. Of Cambodia’s garment exports, 46 per cent goes to Europe, 24 per cent to the United States, 16 per cent to Japan and nine per cent to Canada.