Cambodian Exports to EU See Rapid Growth in 2012

Cambodia’s exports to the European Union (E.U.) grew to $2.32 billion in 2012, a 23 percent increase compared to the previous year, according to the E.U.’s latest trade figures.

The figures, released this week by the European Commission’s trade office, testify to the region’s growing role as a key trading partner for Cambodia, thanks to the E.U.’s Everything But Arms (EBA) trade scheme, which lets Cambodia and a few dozen other developing countries export most goods to member states without tariffs or quotas.

According to the figures, exports to the E.U. grew twice as much as exports to any other of Cambodia’s trading partners in 2012. And economists say that it would not be surprising if exports to the E.U. soon made up half of all Cambodia’s exports, with garments leading the way.

Of the $5.49 billion worth of goods Cambodia exported last year, according to figures from the Commerce Ministry’s Cam­Control department, 42 percent went to the E.U., up from 35 percent in 2011. The remainder of Cambodia’s exports mostly went to the U.S., with smaller amounts going to Japan, China, South Korea and other countries in South­east Asia.

Poullang Doung, a senior economist for the Asian Development Bank in Cambodia, said that the fast growth in exports to the E.U. will continue to help Cambodia’s economy.

“As [far] as employment creation is concerned, the larger the exports, the more jobs the economy can generate for the Cambo­dian labor force,” Mr. Doung said. And given the country’s rath­er small domestic market, he added, “export-led sectors play a very critical role in driving Cam­bodia’s economic growth.”

Garments and footwear continued to make up the lion’s share of Cambodia’s exports to the E.U. last year. But it was exports from Cam­bodia’s nascent autoparts industry that saw the biggest jump —up 6 percent to $225 million.

Despite the economic slump now taking hold in much of Europe, Mr. Doung expected Cam­bodia’s exports to the E.U. to keep soaring as the region recovers.

“The growth in trade between Cambodia and the E.U. is anticipated to keep up over the medium-term and as the E.U. zone’s economic recovery takes hold,” he said. “The growth in the E.U. areas is likely to be stagnant this year, but a rebound is expected in 2014.”

Still, the EBA trade scheme has not been without its critics in Cambodia.

Some rights groups blame it for effectively subsidizing the business of a few firms currently exporting their produce to the E.U. on the backs of hundreds of forcibly—even violently—evicted farmers.

The focus of their ire is a pair of plantations in Koh Kong province accused of evicting hundreds of families from their farms and out of their homes, on at least one oc­casion with bullets and rifle butts. The plantations, co-owned by a Thai firm and a Taiwanese firm, exported nearly $13 million worth of sugar to the E.U. last year duty free thanks to EBA benefits.

The affected families want the E.U. to cut sugar exports out of EBA.

In a resolution passed last year, the European Parliament asked E.U. Trade Commissioner Karel de Gucht to at least investigate such government-issued land concessions and to end the trade benefits if it backed up the claims of abuse.

In a statement addressing those concerns last month, E.U. Ambassador to Cambodia Jean-Francois Cautain said his team was looking into links between EBA and rights violations but lauded the trade scheme’s benefits.

“Because one thing is clear,” he said. “Cambodia is a prime example of the Everything But Arms scheme’s power as an engine of growth. In the last 10 years, the duty free and quota free access to the E.U. market has allowed Cambodia to more than double its exports to the E.U., in particular in the textile and footwear sector, which provide direct employment for hundreds of thousands of Cambodians.”

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