Samdech Techo Hun Sen, Cambodia's Prime Minister, said on Wednesday that the nation's economy is projected to grow by 7 percent this year regardless of the on-going threat of trade sanctions imposed by the European Union.
Last week, an 18-month process was started in the European Union that could lead to the temporary suspension of the tariff-free trading access of Cambodia to the European market under the Everything But Arms (EBA) scheme because of the growing concern over human rights and labor rights violations in the kingdom.
The prime minister said that after achieving a 7.5 percent economic growth in 2018, the Cambodian government hopes that its economy will grow around 7 percent in 2019. The statement was given during his speech in front of not less than 11,000 garment factory workers in southern Kandal province.
He said that the garment exports, tourism, construction, and real estate, and agriculture will contribute largely to the growth. He added that a series of precautionary measures that include the cancellations of various fees and the reduction of electricity tariffs were considered by the government to support exporters in case that the European Union stripped the EBA trade preferences.
The prime minister assured his people that Cambodia will move forward with dignity and strength. He added that the government won't leave any factories to be shut down. He added that with the measures that they have taken, Cambodia's exporters are still capable of paying tariffs for exporting their products to any market if they are required to pay tariffs.
Sok Sopheak, Cambodian Ministry of Commerce Secretary of State, said on Friday that the measures that the government took helped to reduce the operating costs for the exporters by the U.S. $200 million every year.
As a least developed country, the European Union is one of the key trading partners of Cambodia, especially for its garment and footwear sector. The European Union imports all products, excluding arms and ammunition, with zero obligations since 2001. The ministry of Commerce's report said that the amount of exported products Southeast Asian nation reached a total of 18 billion U.S. dollars in 2017. Nearly 40 percent of the total amount or products amounting to 7 billion U.S. dollars went to the European Market.
The manufacturers in Cambodia fears that if the EBA is suspended, the tariffs imposed on the garment sector will rise by 12 percent and eight to 17 percent in the footwear sector.
