Commerce minister Cham Nimol (center) and Alissar Chaker, resident representative of UNDP Cambodia (second right) at the ‘Validation Workshop for the Assessment and Roadmap for EU Green Trade Standards, Rules of Origin and Double Transformation’, held on January 20. UNDP Cambodia
Cambodia is taking steps to align its trade practices with stringent European Union (EU) green standards as it prepares for its transition from Least Developed Country (LDC) status in 2029.
During the January 20 “Validation Workshop for the Assessment and Roadmap for EU Green Trade Standards, Rules of Origin and Double Transformation”, experts and officials emphasised the importance of sustainable trade practices in securing Cambodia’s economic future.
“Minister of Commerce Cham Nimol emphasised that this roadmap will act as a practical guide to enhancing trade readiness by promoting sustainable trade practices, expanding value chains and ensuring market access for Cambodian exports,” said the commerce ministry.
The workshop, co-hosted by the UN Development Programme (UNDP) and the Cambodian government, focused on assessing the impacts of EU trade policies on the Kingdom’s exports.
The EU is one of Cambodia’s largest trading partners, with a bilateral trade volume of approximately $4.9 billion in the first 11 months of 2024.
Of this, Cambodian exports to the EU accounted for $4 billion, while imports from the EU were valued at $9 million.
“Cambodia’s trade relationship with the EU has been a cornerstone of its economic growth, contributing to job creation, poverty reduction and foreign investment,” said Alissar Chaker, resident representative of UNDP Cambodia.
“As we approach LDC graduation, new challenges and opportunities arise. Strategic preparation is essential to ensure the country’s competitiveness in a rapidly evolving global trade landscape,” she explained.
She said the EU’s commitment to environmental sustainability has introduced new trade policies that require compliance with green standards.
These include the Carbon Border Adjustment Mechanism (CBAM), the EU Emissions Trading System (EU ETS) and the Corporate Sustainability Due Diligence Directive (CSDD).
“Cambodian industries must adapt to these measures, which aim to reduce carbon emissions and promote sustainable sourcing and production practices,” added Chaker.
For years, she said, Cambodia has benefited from the EU’s Everything But Arms (EBA) initiative, granting duty-free and quota-free access to the European market.
Nimol noted that, faced with the potential loss of tariff access privileges, the need for strict adherence to trade rules, and the fragility of the global trading system, Cambodia must embrace a strategic, innovative and forward-looking approach.
“This is particularly crucial as the global community progresses toward achieving the 2030 Agenda for Sustainable Development, including collaboration with Cambodia's major trading partners,” she continued.
Preferential treatment will be phased out after LDC graduation, compelling Cambodia to fully comply with the World Trade Organization’s (WTO) trade rules and the EU’s rigorous environmental standards.
“The EBA has been the backbone of Cambodia’s trade with the EU, enabling robust export growth,” said Chaker.
“As we transition to a new era, the challenge lies in recalibrating our growth model to align with green trade standards while maintaining market access,” she added.
The workshop unveiled an assessment and roadmap aimed at preparing Cambodia for these transitions.
The roadmap will also contribute to the government’s Smooth Transition Strategy for LDC graduation and the Trade Policy Framework 2030.
These initiatives are designed to sustain economic growth and ensure Cambodia remains a competitive and responsible trade partner.
Nimol said that Cambodia's transition from LDC status and rising demand for sustainable practices present opportunities to adopt a more sustainable, inclusive and resilient growth model.
“This approach will not only prepare Cambodia for the future but also secure its position in the dynamic and evolving global economy, embracing the spirit of turning challenges into opportunities,” she added.
Chaker reiterated that the UNDP and its partners are committed to supporting Cambodia in this transition. Their efforts include studies on the potential impacts of LDC graduation, as well as assessments of responsible business practices within the context of global trade integration.
“Recalibrating Cambodia’s growth model towards a greener economy is essential for harnessing opportunities and bolstering competitiveness,” said Chaker.
She believed this transformation would lay the foundations for achieving the Kingdom’s Vision 2050 and positioning Cambodia as a responsible trade partner on the global stage.
