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Withdrawal of EBA & Risks to Real Estate

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In this Viewpoint, CBRE Cambodia explore some of the risks presented by the EU’s decision to partially withdraw Cambodia’s access to the EBA trade privileges scheme.

After an extensive 18 month review of trade policy towards Cambodia, the European Union has moved to partially withdraw the Kingdom’s access to the ‘Everything but Arms’ (EBA) preferential trade initiative. The initiative has formed an important part of Cambodia’s export market, particularly for the country’s dominant garment and footwear manufacturing sector, which has increased its exposure to European markets in recent years.

The European Union accounted for 5.4 billion Euros (USD $5.9 billion) in exports during 2018. The partial withdrawal of preferences impacts approximately 1 billion Euros (USD $1.1 billion) and will likely come into force as of 12th August 2020, unless the European Parliament or Council object.

EBA provides full duty free and quota free access to the EU Single Market. Withdrawal of EBA access means that those goods affected will be subject to European ‘Most Favoured Nation’ tariffs, which will add a tariff of 12% to clothing exports and between 8% and 17% to footwear exports.