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Cambodia’s Duty-Free Export Status to EU Threatened

Laws & Regulations

BRUSSELS, Belgium – The European Commission has ramped up trade pressure on Cambodia (and Myanmar) over rule of law and human rights concerns. Last Friday EU Commissioner for Trade Cecilia Malmström said that both countries risked losing preferential access to the EU market under the Generalized System of Preferences (GSP) Plus arrangement. The EU’s step, if implemented, would threaten Cambodia’s significant bicycle export to the EU.

Cambodia’s Duty-Free Export Status to EU Threatened
Cambodia’s preferential access to the EU market is allowing for a 14 percent import duty edge on countries that do not hold such status. – Photo Shutterstock

Renowned ‘Politico’ reported on the European Union’s threat to the tariff-free access of Cambodia’s export to the markets of the EU’s 28-member states. This is part of the GSP’s “Everything But Arms arrangement”.

Withdrawal process launched

Trade Commissioner Malmström posted a blog last Friday saying “Today, High Representative Federica Mogherini (for Foreign Affairs, ed. note) and I have therefore notified Cambodia that we are launching the process for the withdrawal of their Everything But Arms preferences. Without clear and evident improvements on the ground, this will lead to the suspending of the trade preferences that they currently enjoy.”

Last July’s elections

The measures the EU is now preparing against Cambodia have to do with the elections that took place in the country last July. The Cambodian People’s Party led by longstanding Prime Minister Hun Sen won these elections after he arrested Kem Sokha, the leader of the now-dissolved Cambodia National Rescue Party (CNRP), on accounts of treason.

EU’s biggest bicycle supplying country

Cambodia is since last year EU’s biggest bicycle supplying country. And stands firmly at that number one position. Import from the country that benefits from the EU’s Generalized System of Preferences (GSP) import duty free status (allowing for a 14 percent import duty edge on countries that do not hold such GSP status) grew in the first half of 2018. Import from Cambodia was up by close to 7 percent to some 870,000 regular bicycles.

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