In taking the drastic step of suspending Cambodia’s tariff-free access to EU markets last week, the European Commission hoped it would incentivize Phnom Penh to repair human rights violations and improve its governance. But the move is much more likely to backfire, pushing Cambodia away from Europe and toward China.
In place since 2001, the Everything but Arms scheme, or EBA, grants the world’s least developed countries zero-tariff and quota-free access to the EU’s single market for almost all exports.
EBA itself is an ingenious and superbly effective tool of developmental assistance. Without direct cash flow, the local economy can benefit from exporting to the huge European market in the absence of a free-trade agreement. EBA allows the least developed economies to grow organically and on their own merit.