Can Hun Sen’s government plug the gap left by the EBA?

The Cambodian government is making preparations to mitigate the impact of the possible suspension of the European Union’s (EU’s) ‘Everything But Arms’ (EBA) agreement. Hun Sen’s government announced on Tuesday that it had held back around US$3 billion from tax revenues to deal with the implications of losing preferential access to EU markets.

Under the EBA, 47 of the world’s lowest-income countries receive duty-free access to EU markets for all export products, excluding weapons and ammunition. However, last month, the EU warned Cambodia that it would lose its benefits under the agreement unless it improved its human rights record.

Cambodian exports to the EU totalled US$5.8 billion last year, 95% of which were exempt from duty under the EBA agreement.

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