Cambodia at the crossroads

Losing EU trade privileges could hurt, but it won't be the end of the world, say government and businesses.

Cambodia is just five months away from learning whether its US$8-billion garment and footwear industry will continue to enjoy preferential trade status in the European Union (EU), the country’s second largest trading partner and largest export market.

Both the Cambodian government and businesses say they are preparing to weather the storm if the privileges are suspended. Some say the prospect of change is helping to speed up the adoption of reforms to improve productivity and export competitiveness.

At stake is duty-free access for all exports except arms and ammunition to EU markets under the Everything But Arms (EBA) programme. Termination could affect the garment industry the most, putting workers at risk of losing jobs and dragging down economic growth overall as exports slow, experts say.

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