Brexit, a short expression for Britain’s Exit from European Union, was the referendum of the United Kingdom on its continuity as a member of EU, where 48.1 per cent voting to remain and 51.9 per cent winning the leave. And, according to the ILO (International Labour Organization) this is going to hurt the garment export sector of Cambodia as Europe has been its No. 1 garment export market since 2014, with the UK, in particular, topping the list.
Garments currently make up roughly 80 per cent of Cambodia’s total exports and have been its most reliable growth engine for the past several years. Exports continued their strong growth over the first half of fiscal 2016, up 10.8 per cent year-over-year to US $3.5 billion. ILO said that the UK could maintain preferential access for Cambodia and other so-called Least Developed Countries, or revert to World Trade Organization rules. In the latter case, Cambodia would lose its special access unless the Government arranges a new free-trade agreement with the UK.
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Kaing Monika, Deputy Secretary General of Garment Manufacturers Association in Cambodia (GMAC) said, “Let’s just hope that the EU can keep moving forward and any negative effect would be minimal. For us, it’s an external factor which is out of our control. Cambodia should just do its best to make sure our investment climate remains conducive,” adding, “Brexit is a very complicated matter and it is too early for us to exactly predict the consequences. Many don’t really know what is going to happen next.”
