In February 2019, the European Union launched an 18-month process over whether or not to maintain Cambodia’s preferential access to the EU market under the Everything But Arms (EBA) trade scheme.

An EBA withdrawal can deprive hundreds of thousands of Cambodians of decent jobs. About 28 per cent of the population, the extremely vulnerable, could be thrown into poverty. This could create conditions for social unrest and political instability. The EBA scheme allows Cambodia to export anything to the EU market, with the exception of weapons, duty-free and quota-free. Cambodia was granted access to the scheme, offered to most least developed countries, in 2001.

In 2018, exports to the European Union accounted for more than a third of Cambodia’s total exports. Textiles and footwear, prepared foodstuffs, vegetable products, rice and bicycles represent 97 per cent of Cambodia’s exports to the European Union. The textile and footwear industries alone employ more than 7,00,000 Cambodians. Losing EBA preferences can result in slower export growth for Cambodia, increase tariffs by 12 per cent in the garment sector and by 8 per cent to 17 per cent in the footwear sector.

In the meantime the EBA review has soured Cambodia’s relations with the EU, rendering Cambodia more dependent on China.