Cambodia

As a least-developed country (LDC), Cambodia is a beneficiary of the EU's "Everything but Arms" (EBA) arrangement. Since March 2017, Cambodia is one of the countries under "enhanced engagement", which further incentivises and facilitates beneficiary country's progress with regard to the 15 core international conventions covered in the GSP regulation. In August 2020, Cambodia's preferential access to the EU market was partially withdrawn because the government failed to address the EU's human rights concerns that led to the start of the withdrawal procedure in February 2019. Still, the EU continues to be an important market for Cambodia: total EU imports from Cambodia amounted to about €4.8 billion in 2023, and preferential imports to €3.5 billion.

What is the EBA?

The EBA arrangement covers all LDCs as classified by the United Nations. This arrangement enables duty-free and quota-free access for all products originating in LDCs except for arms and ammunition. Unlike beneficiaries of the Standard GSP and GSP+, LDCs are not excluded from the scheme if they benefit from other preferential arrangements or agreements with the EU.

At a glance: EU preferential imports from EBA beneficiary countries (2023, € million)

group

17.4M (2023)

Population

account_balance

Parliamentary Constitutional Monarchy

Government

trending_up

5.0% (2023)

GDP Growth

equalizer

2.1% (2023)

Inflation

money

$ 42.3B (2023)

GDP

Facts about Cambodia's economy

Economic Growth

Cambodia can look back on two decades of substantial economic growth. The economic growth rate averaged 8% annually until covid-19, which made the Cambodian economy one of the fastest-growing economies in the world. Post-covid, annual growth averaged about 5%.

Export Products

Cambodia's most important export goods are articles of apparel and clothing, but exports of other manufactures, notably electrical and electronic equipment have been rising fast in recent years.

Trade Partners

Cambodia's most important trading partners are China (25% of total trade in 2023), the US (19%), Vietnam (14%), and the EU (8%). Most of Cambodia's imports originate from regional trading partners - China, Vietnam, Thailand, Indonesia, and Singapore. Important export markets for Cambodian products are the US (38%) and the EU.

Economic Structure

Agriculture remains the mainstay of the economy. The most important crops include rice, coconuts, cassava, corn, sugarcane, and soybeans as well as a variety of fruits. Manufacturing industries have developed fast in recent years, focussing increasingly on exports. The garment sector was a main driver of economic growth and still accounts for the majority of Cambodia’s exports, but manufacturing of electrical equipment and electronics has expanded fast in recent years.

Usage of EBA Preferences

Measured by the value of preferential exports (€3.5 billion in 2023), Cambodia is the second biggest beneficiary of the EBA arrangement. About 74% of Cambodia's total exports to the EU make use of the preferences granted under the EBA.

Trade with the EU

Total trade with the EU amounted to €3.6 billion in 2023. The EU is Cambodia's fourth most important trading partner with a share of 8%. About 14% of Cambodia's exports go to the EU market. Imports from the EU, on the other hand, play a less important role: Only 2.9% of Cambodia's imports originated from the EU in 2023.

Cambodia and the EU

Imports from Cambodia by product section (2023, € million)

Imports from Cambodia over time (€ million)

CAMBODIA AND THE EU GSP

Economic Impact

83%

Share of Cambodia's exports to the EU that were eligible for tariff preferences under the EBA in 2023.

88%

Cambodia's preference utilisation rate in 2023.

75%

Share of zero-duty imports from Cambodia.

Preference utilisation and export diversification

EU imports from Cambodia (€ million)

Preference utilisation (%) vs. total eligible imports (in € million)

EBA-eligible imports constitute a significant portion of the EU's total imports from Cambodia. They steadily increased from 2013 to 2019 but then contracted sharply in 2020 and 2021 in response both to the COVID-19 pandemic and the partial and temporary withdrawal of preferences. 2022 and 2023 saw a partial recovery, albeit still at substantially lower levels than in the years up to 2019. Cambodia's preference utilisation rate fluctuates around 90% (88% in 2023). All of the important product sections have similarly high preference utilisation rates, including the two dominant import groups apparel and footwear.

The largest product sections under EBA (€ million, 2023)

Apparel products accounted for about 71% of preferential imports in 2023, indicating that the Cambodian economy remains heavily reliant on this sector - although the share decreased from 75% in 2021. Further economic diversification can support the economy's resilience to shocks on international markets and reduce the overall fragility of the economy. Thus, in the "Industrial Development Policy 2015 - 2025", the government has identified a number of priority sectors which are supposed to support the diversification of the product range. These priority sectors include inter alia electronics and automotive parts, which record a dynamic development and an increasing share in overall industrial production. EU preferential imports of vehicles increased by 35% from 2021 and 2023, slightly more than apparel and footwear (32% each).

SUSTAINABLE DEVELOPMENT

The GSP trade preferences are conditional on the adherence to and the respect of fundamental human and labour rights as specified in the 15 core conventions on human rights and labour included in the GSP Regulation Cambodia has ratified all 27 international conventions listed in the GSP Regulation on human and labour rights, environmental protection and good governance. Nevertheless, in 2017 the EU started the "enhanced engagement" with Cambodia due to concerns with the country's overall adherence to human and labour rights and shortcomings in the respect of the convention’s core principles. Due to lacking progress in the focus areas of the enhanced engagement, the EU launched a temporary withdrawal procedure in February 2019, which led to the temporary suspension of preferences for a number of products originating from Cambodia on 12 August 2020. The partial withdrawal of preferences was taken on the basis of concerns about restrictions of the right to political participation, of the right to freedom of expression, and of the right to freedom of association and peaceful assembly. Progress on non-discrimination, land and housing rights continues to be slow. Concerns remain on labour rights, notably on freedom of association and collective bargaining, even after certain reforms made in 2020. Limited progress has been recorded with respect to human and political rights concerns expressed by the EU. Parliamentary elections in July 2023 were held in a restricted political and civic space and excluded important sectors of the opposition. The Law of Political Parties and the Law of Associations and NGOs have not been amended.

Core international conventions on human rights and labour standards

Ratified

Convention on the Prevention and Punishment of the Crime of Genocide (1948)
International Convention on the Elimination of All Forms of Racial Discrimination (1969)
International Covenant on Civil and Political Rights (1976)
International Covenant on Economic Social and Cultural Rights (1976)
Convention on the Elimination of All Forms of Discrimination Against Women (1981)
Convention Against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment (1987)
Convention on the Rights of the Child (1990)
Convention concerning Forced or Compulsory Labour, No 29 (1930)
Convention concerning Freedom of Association and Protection of the Right to Organise, No 87 (1948)
Convention concerning the Application of the Principles of the Right to Organise and to Bargain Collectively, No 98 (1949)
Convention concerning Equal Remuneration of Men and Women Workers for Work of Equal Value, No 100 (1951)
Convention concerning the Abolition of Forced Labour, No 105 (1957)
Convention concerning Discrimination in Respect of Employment and Occupation, No 111 (1958)
Convention concerning Minimum Age for Admission to Employment, No 138 (1973)
Convention concerning the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour, No 182 (1999)

Additional Conventions

Convention on International Trade in Endangered Species of Wild Fauna and Flora (1973)
Montreal Protocol on Substances that Deplete the Ozone Layer (1987)
Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal (1989)
Convention on Biological Diversity (1992)
The United Nations Framework Convention on Climate Change (1992)
Cartagena Protocol on Biosafety (2000)
Stockholm Convention on Persistent Organic Pollutants (2001)
Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)
United Nations Single Convention on Narcotic Drugs (1961)
United Nations Convention on Psychotropic Substances (1971)
United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988)
United Nations Convention against Corruption (2004)

EU-Cambodia Bilateral Development Cooperation

DG INTPA

Access all info about EU-Cambodia relations on the International Partnerships website.