Cambodia’s exports to Europe could see a huge decline if the European Union suspends Everything But Arms (EBA) trade preferences for the country. If EBA is withdrawn, tariffs on garment, footwear, and bicycle products will increase 12 per cent, 16 per cent and ten per cent respectively. The EU has already imposed tariffs on Cambodia’s milled rice.

The EU is a major trading partner for Cambodia, particularly for garments and footwear. As a least developed country, all of Cambodia’s exports to the EU, except arms and ammunition, have faced zero per cent tariff since 2001. Cambodia’s exports to the EU account for more than one-third of Cambodia’s total exports. In any case Cambodia has already taken measures to counteract the possible withdrawal of the EBA. The measures include cutting production and export costs to support local manufacturers and exporters. The measures are aimed at reducing operating costs for producers and exporters by about 400 million dollars a year.

The garment and footwear industry is one of the pillars of Cambodia’s economy. The sector has helped improve labor standards and workers’ living conditions, reduce poverty and promote sustainable growth. Cambodia’s garment sector employs some 7,00,000 workers, whose jobs could be in question if EBA is pulled.