Cambodia still to benefit from EBA deal with the UK

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Following the United Kingdoms decision to leave the EU, it will no longer follow European Union rules, and as a result, have decided not to cut Cambodia’s Everything But Arms (EBA) preferential treatment on tariff-free import exemptions.

Cambodia Free Trade Agreements
Cambodia is listed as under the UK GSP Least Developed Country Framework

The British ambassador to Cambodia, Tina Redshaw, said the UK would implement a trade policy independent of the EU’s from January 1 2021. In addition, it would not continue the partial suspension of the EU bloc’s preferential system from Cambodia within the framework of its Everything But Arms (EBA) scheme.

The British Embassy in Cambodia said, “Further to the announcement of Cambodia’s inclusion in the UK GSP Least Developed Country Framework, it has now been agreed that Cambodia will receive quota-free access and nil rates of import duty on all goods other than arms and ammunition from 1 January 2021.”

Under the Trading with developing nations from 1 January 2021 guidelines, Cambodia has been listed as one of UK’s Generalised Scheme of Preferences (GSP) under Least Developed Countries Framework.

The framework applies to countries that the UN classifies as Least Developed Countries, and they receive trade preferences such as the reduction or the removal of rates of duty (tariffs) on imports from eligible developing countries into the UK.

The gov.uk website says “Cambodia will receive quota-free access and nil rates of import duty on all goods other than arms and ammunitions under the UK GSP. The UK will continue to raise human rights issues with the Government of Cambodia and continue to monitor the situation.”

In total, the UK GSP will have 3 frameworks:

  • Least Developed Countries Framework
  • General Framework
  • Enhanced Framework

GMAC (Garment Manufacturers Association in Cambodia)

GMAC secretary-general Ken Loo previously told local Cambodian media “The UK is the leading market in the EU (for Cambodian goods), accounting for between 25 and 30 per cent of (the Kingdom’s) total exports to the bloc” and that the UK’s GSP will serve as a springboard for our product exports and expand shipments into the market.

Garments Cambodia

Cambodian and UK trade

In December 2020, it was reported bilateral trade volume between Cambodia and the UK reached $813.22 million in the first 11 months of 2020. This represents a 17.61 per cent decrease compared to the same period in 2019, according to the Ministry of Commerce.

Most of Cambodia’s exports to the UK comprised clothing, footwear, bicycles, milled rice and agricultural products. Cambodia’s exports were worth $766.77 million, down 16.02 per cent compared to 2019, according to the General Department of Customs and Excise of Cambodia.

Cambodia’s imports from the United Kingdom mainly consisted of cars and machinery and were valued at $46.45 million, a decrease of 37.30 per cent year-on-year compared to 2019.

Cambodian Trade Deals 2020-2021

Cambodia signed a free trade agreement (FTA) with China in 2020 and is currently negotiating similar deals with the UK, South Korea, the US, Japan, Mongolia, India and the Eurasian Economic Union (EAEU) bloc composed of Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia.

Furthermore, Cambodia has signed the Regional Comprehensive Economic Partnership (RCEP) which is seen as the world’s largest trade bloc.

The World Bank has revised its 2020 growth forecast for Cambodia to -2.0 per cent but predicts it is expected to grow by 4 per cent in 2021.

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