Tariff Barriers on Cambodian Shoes... EU Commission Decides to Suspend 'Duty-Free Preferences'

Applicable to 40 items from August

About 1 billion euro export impact

Approximately 20% of total export value

[Asia Economy Phnom Penh, guest reporter Ang Gil-hyun] The European Union (EU) Commission announced that it will suspend some of the tariff-free preferential treatment granted to Cambodia. This decision will impact Cambodia's exports to the EU worth about 1 billion euros (KRW 1.2824 trillion).

In 2017, after the Hun Sen government arrested the leader of the then main opposition party, the Cambodia National Rescue Party (CNRP), on charges of attempting to overthrow the state, and subsequently dissolved the CNRP, the ruling Cambodian People's Party (CPP) swept all seats in the general election held in July the following year. The EU began considering sanctions in October of that year.

According to Cambodian media on the 18th (local time), Josep Borrell, the EU High Representative for Foreign Affairs and Security Policy, announced sanctions against Cambodia, stating, "Considering the duration, scale, and impact of violations of Cambodia's political participation rights and freedoms of expression and assembly, there is no choice but to partially withdraw benefits," while leaving room for reconsideration by adding, "We will continue to monitor the situation and restore benefits if Cambodia adequately addresses these issues."

Unless opposed by EU member states and the European Parliament (EP) within six months from this day, tariffs will be imposed from August 12 this year on a total of 40 Cambodian products exported to Europe, including sugarcane, travel goods, and certain clothing and footwear items. Tariff rates by item include 12% for clothing, 2.7?9.7% for travel goods such as trunks, suitcases, and bags, 12% for swimwear, and 5?8% for footwear.

According to the European Commission (EC), this decision is expected to affect about 1 billion euros, approximately 20% of Cambodia's total exports to the EU in 2018. This corresponds to about 8% of Cambodia's total exports (USD 13.575 billion in 2018). In 2018, Cambodia exported a total of 5.36 billion euros to the EU, including clothing and footwear worth 3.972 billion euros (688 million euros), bicycles (327 million euros), agricultural products (166 million euros), and leather and fur products (129 million euros).

Although the EU has suspended tariff-free benefits, the damage is expected to be less severe than anticipated. Shin Jong-su, head of the KOTRA Phnom Penh Trade Center, said, "Since the withdrawal affects about 20% of exports to the EU, the direct impact on overall exports and the economy will be limited."

This content was produced with the assistance of AI translation services.