Senior members of the European business community from the EU-ASEAN Business Council (EU-ABC) met with Deputy Prime Minister Sun Chanthol, first vice-chairman of the Council for Development for Cambodia (CDC) today, March 5, as the council is stages a March 4-5 meeting to improve trade relation.
Around 50 delegates from over 20 European multinational corporations and organisations are meeting in Phnom Penh for series of high-level engagements with Cambodian officials.
The main topic of this morning’s discussions was the significant role European businesses play in Cambodia’s economy, with both sides voicing their eagerness to elevate cooperation, especially as the Kingdom works to diversify its export market and move up the value chain, according to a press release.
It noted that potential areas for collaboration include agri-food production and nutrition, sustainable manufacturing, textiles and apparels, furniture assembly, and logistics and connectivity — key sectors represented by the EU-ABC delegates.
During his opening remarks, Chanthol stressed that the private sector was a key engine of Cambodia’s economic growth.
“We cannot build Cambodia alone. We need our partner, the private sector,” he told the attendees.
Noel Clehane, EU-ABC vice-chair, who led the European delegation, noted that European businesses were already convinced of Cambodia’s attractiveness for trade and investment.
“We’re very positive about Cambodia’s economic outlook. It may be a smaller market within ASEAN, but it’s incredibly dynamic with a young workforce and significant room for growth,” he said.
“There’s been much enthusiasm from government officials to deepen cooperation with the European private sector, and we’re equally keen to invest in Cambodia’s future,” he added.
Another key topic was Cambodia’s economic trajectory as it prepares to graduate from Least Developed Country (LDC) status in 2029.
The European delegation saw this as a major success, but raised concerns over the Kingdom’s ability to remain competitive once it loses near-zero tariff access to the European market under the Everything But Arms (EBA) scheme, which applies only to LDCs.
They said the “potential costs of exporting to the EU would deal a huge blow to the 1,400 European businesses operating in Cambodia, a crucial manufacturing hub in the region”.
Minister of Commerce Cham Nimul allayed their concerns during yesterday’s meeting, expressing confidence that the Kingdom would achieve a smooth transition, as the government has an intention to work towards applying for the EU’s Generalised Scheme of Preferences Plus (GSP+), according to the release.
GSP+ scheme grants developing countries zero-tariff access for most exports to the European market.
The visiting delegates noted, however, that achieving GSP+ eligibility would require significant reforms and sustained progress in meeting the scheme’s criteria.
“We want to see Cambodia succeed. When Cambodia succeeds, European businesses succeed too. This is why we’ve consistently urged the government to commit to implementing the reforms necessary for GSP+ qualification,” said Chris Humphrey, EU-ABC executive director.
“We hope the message has gotten through. We’re here to help, and we want to lend our full support to Cambodia’s economic growth,” he added.
Delegation head Clehane highlighted that regardless of the outcome of reforms, European businesses would continue to operate in the Kingdom.
“If there’s one thing this visit has shown, it is that European businesses are here to stay. We remain committed to supporting Cambodia’s economic development and deepening our partnership with the Kingdom in the years ahead,” he said.
