In February, the European Commission launched an official process that could see Cambodia being temporarily withdrawn from Everything But Arms (EBA) benefits, due to a significant decline in human rights and democratic standards.
Cambodia enjoys preferential access to the European Union under the EBA program, which allows what the bloc calls “vulnerable developing countries” to pay fewer or no duties on all their exports to the bloc, except weapons and ammunition.
This matters to Cambodia’s MFI borrowers because so many of them now count on money they earn in the nation’s apparel, footwear and sporting goods manufacturing sectors, direct EBA beneficiaries. The 28-member EU is Cambodia’s largest trading partner, and accounted for 45% of its exports worth about $5.5 billion in 2018.
