Cambodia is expected to grow by seven per cent in 2019. Growth will be driven by garment exports, tourism, construction and real estate and agriculture. However, the country faces a threat of trade sanctions from the European Union. This could lead to the suspension of Cambodia’s duty-free trading access to the EU market.

If this happens, Cambodia is contemplating steps including the cancellation of various fees and reduction of electricity tariffs to support exporters. These measures are expected to help reduce operating costs for exporters by about 200 million dollars a year.

The EU is a key trading partner for Cambodia, especially for garments and footwear. As a least developed country, Cambodia has enjoyed exports of all products, except arms and ammunition, to the EU market with zero per cent tariff since 2001.

The Southeast Asian nation exported products worth $18 billion in 2017, of which $7 billion, or nearly 40 per cent of the total amount, went to the EU market. The EU has started the 18-month process that could lead to the temporary suspension of Cambodia's duty-free trading access to the EU market due to concerns over human rights and labor rights in the kingdom.