PHNOM PENH, March 29 (Xinhua) -- Cambodian Prime Minister Samdech Techo Hun Sen announced Friday a number of measures to strengthen economic independence and to support local exporters amidst the possible lifting of the European Union (EU)'s preferential trade arrangement under the Everything But Arms (EBA) scheme.
The EU started in February the 18-month process that could lead to the temporary suspension of Cambodia's duty-free trading access to the EU market under the EBA scheme due to concerns over human rights and labor rights.
Speaking at the 18th Government-Private Sector Forum here, Hun Sen said the measures included the recent cancellation of certificates of origin fees, the pullout of Cambodia Import Export Inspection and Fraud Repression (CamControl) unit from all border checkpoints, and the removal of the Kampuchea Shipping Agency and Brokers (Kamsab) officers from all ports.
Also, there have been the reduction of logistics cost, the cut of fees on inspection of cargo containers by scanning machines, and the reduction of fees for getting customs papers stamped, he said.
The prime minister said from April 1, the fees for scanning cargo containers will be slashed by half to 10 U.S. dollars for a 20-foot container and 16 U.S. dollars for a 40-foot container.
Electricity tariff has been reduced by 2 U.S. cents per kilowatt hour for the industrial sector from this year, he said, adding that from next year, the annual public holidays will be cut by seven days from the current 28 days.
"These measures have reduced operating costs for exporters by about 400 million U.S. dollars per year," Hun Sen said. "So if the EU requires us to pay the tariffs, we will be able to pay them."
According to the prime minister, if the EBA is not withdrawn by August 2020, Cambodia will still automatically lose it when the country graduates from the Least Developed Country status.
The EU is a major trading partner for Cambodia, particularly for garment and footwear sector. As a Least Developed Country, Cambodia has enjoyed exports of all products, except arms and ammunition, to the EU market with zero percent tariff since 2001.
According to the Ministry of Commerce, the Southeast Asian country exported products worth 11.2 billion U.S. dollars in 2017, in which about 40 percent went to the EU market.
If the EBA is suspended, tariffs in the garment sector will increase by 12 percent, as those in the footwear sector will rise by 8 to 17 percent, according to the Garment Manufacturers Association in Cambodia.