The European Union's withdrawal of 'Everything But Arms (EBA)' trade arrangement to Cambodia will boost Bangladesh's export to the 28-nations economic block. The EU grants EBA to the 48 Least Developed Countries (LDCs), including Bangladesh and Cambodia, under which they're enjoying duty free and quota free market access to the EU for exports of all products, except arms and ammunition.
The EU notified Cambodia on October 5 that the Kingdom would lose its duty-free access to the EU market unless it makes clear and demonstrable improvements to human rights and democracy in the country. The suspension of trade privilege means Cambodian exports to EU will face a higher tariff up to 12 per cent whereas Bangladesh's export will remain duty-free, further promoting the latter's export to EU.
Exports to EU by far Bangladesh's largest market where it shipped goods worth $21.33 billion in the fiscal year 2017-18, accounting for 58 per cent share of its total shipments, according to the Export Promotion Bureau. However, EU's annual import from Cambodia is about $6.0 billion. The high import duty will make EU businesses uncompetitive in Cambodia which can immensely influence its import from the country. A major portion of this import may be shifted to Bangladesh due to competitiveness of local merchandises.