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In recent years, the trade relationship between Cambodia and the European Union (EU) has been gaining traction once again post-pandemic, with significant growth in exports and imports. According to statistics by the United Nations COMTRADE database on international trade, Cambodia's exports to the EU reached US$5.75 billion in 2022. The numbers have significantly surged to 25% compared to 2021, which was only rising by 15.9%. Part of the country’s economic growth has been due to the strengthening Cambodia-EU trade, with over 78.5% of the Kingdom’s export bloc going to European trade partners, like Germany, Belgium, the Netherlands, France, and Spain, as per the Khmer Times.
With this, as a business owner in Cambodia, you can take advantage of these opportunities to expand your business overseas. But first, the key to the effective global expansion of your Cambodian business is by broadening your knowledge of the Cambodia-EU export market and how international shipping works for countries in the EU. Being a global shipping company that services numerous countries, DHL Express gives you all you need to know about exporting products to the EU.
The European market has become increasingly attractive for Cambodian businesses. Though talks of a Free Trade Agreement (FTA) continue between ASEAN nations and the EU, exporters in Cambodia benefit from duty-free and quota-free access to the EU for all products under the EBA scheme.
EBA, meaning “Everything But Arms”, is a scheme from the EU’s “Generalised Scheme of Preferences” (GSP), which removes tariffs and quotas for all imports of goods, excluding arms and ammunition, coming into the EU from developing countries. The EU’s Generalised Scheme was created to help developing countries integrate into the world economy, and from it, 49 countries have benefitted from duty-free access to EU markets, including Cambodia. According to the Delegation of the European Union to the Kingdom of Cambodia report, the EBA is one of the main drivers of Cambodia’s growing garment and footwear sectors.
However, due to human rights and political concerns, there was a partial withdrawal of the EBA, reportedly affecting one-fifth of Cambodia’s annual exports in 2020. But in recent years, the effects of the EBA withdrawal have been minimising as Cambodia’s exports of garments, footwear, bags, and bicycles, among others, are increasing, as per the Phnom Penh Post.
Germany, specifically, is Cambodia’s largest EU trading partner, accounting for US$1.247 billion of exports. This is because the EU’s activities are bundled in the ASEAN Regional Integration Support by the EU (ARISE) Plus programme, funded by Germany. The ARISE Plus programme aimed to support the trade facilitation between ASEAN countries and EU countries. Through the programme, the EU worked closely with Cambodia in accelerating the implementation of the World Trade Organization (WTO) Trade Facilitation Agreement, which expedited the movement, release and clearance of goods. The programme also helped in achieving a more transparent, predictable, and competitive trade environment, as well as enhanced private sector engagement, notably for Small and Medium-sized enterprises.
While these programmes grant a more efficient process for Cambodian businesses to export to EU nations, you must also learn the different international shipping practices for a seamless expansion.
Businesses must adopt best practices to ensure a smooth shipping experience. Here are some key aspects to consider:
Before exporting your products to EU countries, you have to make sure that your products meet both the legal requirements and the EU buyer’s requirements. Generally, the legal requirements for your products are the same in all EU countries. There are four types of legislation set for products marketed in Europe that are made by the European Commission’s Regulations and Directives, including:
This legislation sets the legal requirements for different sectors. For example, if you’re exporting consumer goods, like footwear or garments, it has to adhere to the General Product Safety Regulation (GSPR), which ensures all products that are exported to European Union nations are safe. To determine how safe your product is, there must be technical documentation containing at least a general description of the product and its essential characteristics relevant for assessing its safety. Characteristics that must be defined in the document are the design, technical features, composition, packaging, instructions for assembly, and if applicable for installation, use, and maintenance.
This legislation pertains to the amount of restricted substances, chemicals, or contaminants which can be used in a product. An example would be that textiles and leather articles must not contain more than 0.1% Azodyes, as per the European Chemicals Agency. This is because categories under these restricted substances can lead to an allergic skin reaction and can be toxic to marine life.
This legislation applies to toys, electronic equipment, and medical devices, among others. The CE marking must be present in products that will be traded in the European Economic Area (EEA) market. This is because the marking indicates that the products meet the EU’s safety, health, and environmental protection requirements.
This legislation deals with marketing requirements; for example, it sets standards for selling a product under a certain name, just like when chocolate can be marketed as “milk chocolate.” This legislation serves as an additional requirement for regulations in the framework legislation and legislation for restricting substances.
With regard to buyer requirements, this may vary depending on the country, trend, and market segment. Once you have engaged an EU partner, make sure that your product is made to suit their business’s requirements. That way, it not only ensures customer satisfaction but also prevents costly returns and losses.
Navigating customs clearance procedures for exporting your products from Cambodia to the EU can be complex, but it's a critical part of international shipping. It’s essential that you familiarise yourself with the specific requirements for your products in the European market. All member states within the EU adhere to a uniform customs tariff known as the Common Customs Tariff (CCT). The rates of duty applied to various products differ; it also depends on their place of origin. Due to the EU’s partial withdrawal of Cambodia’s EBA scheme, the country’s tariffs reach up to 12% on 40 items it exports to the EU. These items include some garment products, travel goods, and sugar.
To classify your goods accurately for customs purposes, the EU employs a system called the Combined Nomenclature (CN). The initial six digits of this system align with the international Harmonised Systems Nomenclature (HS codes). The additional specifications, extending to eight and ten digits, are unique to the European Union.
Accurate classification is of utmost importance as it dictates the applicable duties. Additionally, you must ensure the correct classification for your shipping documents. Incorrect classification of your products under the CN code may lead to delays in the clearance of your goods.
Here are the essential documents required when you plan on exporting goods from Cambodia to the European Union nations:
Here are some packaging tips to ensure the security and smooth transit of your shipment when exporting to Europe:
As businesses in Cambodia look to capitalise on the European market's potential, partnering with a trusted shipping provider is crucial. DHL Express Cambodia is the ideal partner for facilitating seamless international shipping from Cambodia to Europe, as we offer comprehensive shipping solutions that can cater to your needs. Moreover, you can save on transportation costs with our cheap shipping solutions to Europe.
With a global network spanning over 220 countries and territories, DHL Express ensures that your shipments reach their destination on time, every time. Our reputation for reliability is unmatched in the industry. We understand the importance of timely deliveries and work tirelessly to meet your global shipping needs. Open a business account with us today to get started.