Cambodia’s garment industry, already buffeted by the coronavirus pandemic, is set for a further hit after the European Union decided to suspend duty-free access for some products from 12 August over “systematic” human rights violations. Here, Abby Edge and Sheng Lu from the University of Delaware, analyse the potential impact and possible shift in trade patterns.
In February 2020, the European Union (EU) announced it would partially suspend Cambodia’s eligibility for the EU’s Everything but Arms (EBA) programme due to growing concerns about the country’s human rights records. Established in 2001, the EBA trade initiative provides least developed countries (LDCs), such as Cambodia, with duty-free and quota-free access to the vast EU market for all products except weapons and ammunition. It’s aim is that these LDCs achieve faster economic growth and other social-economic developments through expanded exports.
As the EU represents as much as 45% of Cambodia’s total exports, losing the EBA benefits could be economically detrimental. The Cambodian garment industry is especially vulnerable to the EU policy change, given apparel products currently account for nearly 70% of all Cambodia’s export earnings.