The Cambodian Chamber of Commerce and other business chambers including the Malaysian Business Council of Cambodia, European Chamber of Commerce in Cambodia and American Chamber of Commerce in Cambodia have expressed their regret over the recommendation by the European Commission to partially withdraw the Everything but Arms (EBA) trade preference.
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If ratified, as expected by the European Union, starting from August this year, tariffs will be applied to 20 percent of the country’s exports to the EU, representing approximately $1.3 billion of the total $5.8 billion of goods exported annually to the huge trading bloc.
The tariffs would be introduced on 20 percent of selected garment products and 30 percent of selected footwear products. Bicycle and rice imports will not face any impact from the recommendation, if effected, although rice exports are currently taxed to protect EU farmers.
The private sector had called for consideration towards the socio-economic impact of the decision because the move would lead to a price increase of approximately $140 million for the selected goods.
However, the Royal Government has undertaken measures in the form of structural reforms in the last 12 months to tackle any upcoming negative impact that would result from EU’s decision.
The country would still continue to benefit from trade preferences for 80 percent of its exports to the EU. Nevertheless, the private sector continues to call on both the EU and the Royal Government to engage in dialogue pertaining to issues raised by the Commission.
In the issued statement, the private sector expresses a commitment to working with those most affected by this development to mitigate the potential damage to trade and investment and the Kingdom’s reputation.
The news release further highlights that while the decision by the Commission is regrettable , the private sector views the situation as an opportunity to initiate further structural reforms that will go on to strengthen legal compliance and reduce unfair competition.
The private sector believes that future reforms will help in accelerating the diversification of the Kingdom’s economy, export markets and sources of investment.