Illustrative image (Source: Internet) Hanoi (VNA) - Cambodia's exports to theEuropean Union (EU) could see an estimated decline of 513 - 654 million USD ayear if the EU suspends the Everything But Arms (EBA) trade preferences for thecountry, said a World Bank's report released on May 6.
The comment was made in the Cambodia Economic Update, basedon last year’s data on the value of Cambodia’s three key EU exports, includingclothing, footwear and milled rice.
A bankofficial said the figure would have been even higher if bicycle exports to theEU, which were valued at 331 million USD last year, had been included in thestudy.
Early thisyear, EU tariffs were introduced on Cambodian and Myanmar milled rice importsto the bloc at 200 USD per tonne in the first year. The measure intends toprotect local rice producers following complaints from Italian and Spanishfarmers that they are being undercut.
WBCountry Director for Cambodia Inguna Dobraja said improving Cambodia’sinvestment climate and reducing the cost of doing business, along with buildinga skilled labour force, are the key priorities to sustain strong economicgrowth in the medium-term.
The WBreport predicts that the Cambodian economy will grow by 7 percent this year, drivenprimarily by the rapid expansion of exports and robust international demand forthe Kingdom’s goods.
In therisk assessment section of the report, the bank highlighted the potentialwithdrawal of the EU’s EBA scheme as a major factor impacting Cambodia’seconomic outlook, in addition to the inflow of foreign direct investment –which is currently financing many sectors in the country.
Thereport revealed that Cambodia’s garment exports to the EU were valued at 3.65billion USD last year, while footwear and milled rice shipments reached 508million USD and 177.5 million USD, respectively.
If theEU withdraws Cambodia’s EBA preferential trade status, and thus introducingtariffs on a number of key exports into the bloc, apparel will face a 12percent tax, footwear 16 percent and bicycles 10 percent.
Speakingat the report announcement ceremony, Deputy Governor of the National Bank ofCambodia Neav Chanthana said the government has prepared a strategy to negatethe impact should the EU decide to withdraw Cambodia’s EBA status.
In late March, Cambodian Prime Minister Hun Sen announcedlarge-scale economic reforms with a 17-point strategy to stimulate Cambodianeconomic growth which, according to him, could save the private sector up to 400million USD per year.-VNA
