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Cambodia may lose EU trade privileges

Cambodia may soon lose its tariff-free access to Europe. Less than two weeks remain until the European Union decides whether it will revoke Cambodia's trade privileges, granted under the Everything But Arms scheme for least developed nations, due to the country’s systematic violations of human and labor rights. Losing EBA privileges would add a 12 per cent tariff to Cambodian apparel exports to the EU and between eight per cent and 17 per cent for shoes. Europe is a crucial market for the country’s apparel and footwear export sector. Other countries competing in the cutthroat world of low-cost apparel will be keen to snatch market share from Cambodia.

Much work still needs to be done to n improve labor and living conditions in Cambodia. Much progress including wage increase and social security benefits, have been accomplished already. But this many not be enough for Cambodia to retain trade privileges. The EU feels the country has not done enough to maintain its EBA access. The EU also has the option of applying a partial suspension of trade privileges.

Despite the uncertainty, Cambodia’s total exports in the first 10 months of 2019 grew by 6.45 per cent. Exports of textiles, apparel, footwear, travel wear and headwear remained stable.


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