The European Union would continue providing Cambodia with EBA trade tariff preferences for three additional years after the country graduated from least developed country status at the end of 2029, extending them until the end of 2032, according to a senior Economy and Finance Ministry official.
Ministry Secretary of State Phan Phalla told a public forum on macroeconomic management and the 2026 national budget law on the morning of February 2, 2026 that Cambodia would leave the LDC category and become a developing country at the end of 2029.
He said graduation would mean losing some benefits, particularly concessional financing from development partners and preferential trade arrangements with some countries. Nevertheless, he stressed that the EU would continue its trade preferences for three more years.
He said: "From 2030, tariff preferences from many countries will end, but the European Union will continue providing Cambodia with an additional three years of tariff preferences."
The secretary of state noted that even before formal LDC graduation, Cambodia had already begun gradually losing some preferences. Improved revenue-raising capacity and economic development had led some development partners to reduce concessional lending.
He stressed that although graduation could pose challenges, the government had considered them strategically and was prepared. Graduation also offered an opportunity to open new paths, enhance the country's reputation and pursue further development.
Since 2001, Cambodia had received the EU's Everything But Arms, or EBA, preferences, allowing goods across categories to enter the EU market duty-free. However, in August 2020, the EU partially withdrew approximately 20 percent of Cambodia's EBA preferences.
Another ministry secretary of state, Chan Sothy, said graduation and the loss of some benefits were nevertheless a major source of pride, reflecting the government's achievements in economic and social development. He added that as Cambodia became a developing country and eventually advanced towards developed-country status, more prominent international companies and brands would invest there.
Cambodia entered the LDC category in 1991 and met graduation criteria in two consecutive Committee for Development Policy reviews, in 2021 and 2024. The three criteria were gross national income per capita, the Human Assets Index, and the Economic and Environmental Vulnerability Index.
Under the United Nations decision dated December 19, 2024, Cambodia was scheduled to graduate formally from the LDC category on December 19, 2029. By: Pai Sokhim
