PHNOM PENH, May 6 (Xinhua) -- Cambodia's exports to the European market could see an estimated decline of 654 million U.S. dollars a year if the European Union (EU) suspended the Everything But Arms (EBA) trade preferences for the country, said a World Bank's report released on Monday.
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.
In its Cambodia Economic Update, the World Bank said Cambodia exported products worth 4.67 billion U.S. dollars to the European market in 2018, accounting for more than one-third of Cambodia's total exports, and its main products included garments, footwear, bicycles and milled rice.
If the EBA is withdrawn, tariffs on garment, footwear, and bicycle products will increase 12 percent, 16 percent and 10 percent, respectively, the report said, adding that the EU has already imposed tariffs on Cambodia's milled rice since January.
"If the EBA is suspended, assuming everything else unchanged, Cambodia's exports to the EU market are estimated to decline by 654 million U.S. dollars (per year)," World Bank (Cambodia)'s Senior Economist Ly Sodeth said in a presentation during the report launching ceremony here.
Neav Chanthana, deputy governor of the National Bank of Cambodia, said the government had already unveiled a number of measures, including cutting production and export costs, to support local manufacturers and exporters in case the EU striped trade preferences from Cambodia.
"This is a concern, but the government has already taken measures to counteract the possible withdrawal of EBA," she told reporters after attending the report launching event.
"However, we hope that they (EU) will probably not withdraw it," she said.
Cambodian Prime Minister Samdech Techo Hun Sen announced in March that the measures had helped reduce operating costs for producers and exporters by about 400 million U.S. dollars per year.
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.