The European Union and Cambodia

The European Union (EU) and Cambodia share a strong and evolving political relationship. The European Commission and the European External Action Service (EEAS) coordinate EU-Cambodia and EU-ASEAN relations.  The EU Delegation to the Kingdom of Cambodia, led by the EU Ambassador and located in Phnom Penh, manage the day-to-day contacts, engagement and cooperation with the Royal Government of Cambodia.

The EU and Cambodia regularly exchange views on a wide range of bilateral and multilateral issues, including the latest political and economic developments in both Cambodia and the EU.  The EU and Cambodia work together in promoting multilateralism, stability and upholding the international order based on the rules and principles of international law at the UN and in regional fora.

The EU is committed to supporting Cambodia in the effective implementation of its commitments and obligations under international human rights law and UN conventions. 

EU-Cambodia relations were established when Cambodia and the European Communities signed a cooperation agreement in 1997. The agreement focused on both development and economic cooperation, trade, and the promotion of democracy and human rights. Since 2000, the EU and Cambodia hold Joint Committee meetings every two years to exchange views on these issues, the latest having been held in April 2024.

The EU values its active engagement with Cambodia within the Association of Southeast Asian Nations (ASEAN) since July 2000 through the 1980 EC-ASEAN Cooperation Agreement.  EU and Cambodian decision-makers meet at EU-ASEAN Summits, the biennial EU-ASEAN Ministerial Meetings, the annual ASEAN Regional Forum and the EU-ASEAN Post-Ministerial Conference.   The EU and ASEAN upgraded their longstanding relationship to a Strategic Partnership in 2020.

The European Parliament (EP) Delegation for Relations with SEA and ASEAN engage regularly with Cambodian parliamentarians.  The EP has also sent election observers and participates in EU-ASEAN inter-parliamentary diplomacy.

Cambodia, as a Least Developed Country, benefits from duty-free and quota-free access to the EU for all products, except arms under the "Everything But Arms" (EBA) scheme as part of the "Generalised Scheme of Preferences" (GSP).

The preferential access under the EBA scheme has been one of the main drivers for development of the garments and footwear sectors, stimulating economic growth and jobs.

However, the granting of EU trade preferences is subject to the respect of human rights and fundamental freedoms, including labour rights, as a crucial part of EU trade policy. On 12 February 2020, the European Commission decided to suspend part of the tariff preferences granted to Cambodia under the EBA scheme due to serious and systematic violations of the human rights principles enshrined in the International Covenant on Civil and Political Rights. The decision took effect on 12 August 2020.

The EU Access2Markets (A2M) online portal provides information on EU market access.

To promote activities of European companies, the EU supports the ASEAN IPR SME Helpdesk.

The European Chamber of Commerce in Cambodia (EuroCham) is also supported to assist European investors in the country.

The European Union (EU) development cooperation in Cambodia in partnership with the Royal Government is guided by the Global Gateway initiative. Global Gateway enables the EU to put forward the most attractive integrated offer to our partners including on infrastructure investment, trade and macro-economic support. In Cambodia, through the Team Europe approach, Global Gateway aligns the priorities and mobilises the resources from Member States, public development banks and development finance institutions, the European Investment Bank, and the private sector.

The EU employs a mix of financing instruments to support investment and development in Cambodia, aligning with the government’s Pentagonal Strategy and regional integration goals. 

Grants form the backbone of EU development assistance, directly funding projects aligned with Cambodia’s priorities. From 2021 until 2024, €155 million (2021–2024) was allocated to bolster Cambodia’s integration into ASEAN, foster green growth, and create decent jobs under the Joint European Strategy. 

In addition to bilateral programming, the EU supports Cambodia through regional and thematic programmes, which operate across multiple countries or focus on specific sectors and priorities. In particular, Cambodia benefits from EU-funded regional initiatives targeting all ASEAN member states. These programmes focus on economic integration, sustainable connectivity, and socio-cultural cooperation, supporting areas such as trade facilitation, higher education, civil aviation, intellectual property rights, and disaster management. The EU also supports civil society in Cambodia through a range of thematic programmes, focusing on democracy, human rights, inclusive governance, and sustainable development.

Blending operations combine EU grants with sovereign loans or equity to amplify impact. The European Union, through the European Investment Bank (EIB) or development banks from its Member States, for example AFD of KfW, provides concessional loans to the government, offering favourable terms such as low interest rates, to support development objectives.

The EU Delegation manages a substantial portfolio of ongoing blending programmes amounting to €1,017 million (of which 92 million of EU grants) across sectors such as water supply and sanitation, energy, and rural infrastructure, in collaboration with the European Investment Bank (EIB), Agence Française de Développement (AFD), and KfW.

The EU can also mobilise EU guarantees, whose objective is to de-risk and incentivize private sector investments by using the EU budget as a guarantee to absorb part of the financial risk, making projects more attractive to private investors and financial institutions. This approach helps address market failures or investment gaps by increasing the risk-bearing capacity of financial partners, thereby mobilizing additional private capital for projects that align with EU policy priorities such as sustainable infrastructure, innovation, and green growth.

At the heart of this work sits the Multi-Annual Indicative Programme (MIP) 2021-2027, which positions the EU as a strong partner with Cambodia to attain the Sustainable Development Goals (SDGs) in areas that the EU has an identified added value and that can have a transformative impact in the country. The identified priority areas are:

• Green Growth and Decent Jobs 

• Education and Skills development 

• Good Governance 

The EU puts strong emphasis on human development, human rights and democracy, supports multilateralism and the rules-based global order. 

The MIP contributes to the Joint European Development Cooperation Strategy for Cambodia 2021-2027 (JES 2021-2027), implemented by Team Europe, which consists of the European Union (with the European Investment Bank), Belgium, Czech Republic, France (with Agence Française de Développement), Germany (including GIZ and KfW), Hungary, Ireland, and Switzerland (European Partners). The Joint Strategy aims to improve the coordination and efficiency of European development cooperation.

Cambodia also benefits from financial support to regional and thematic programmes, support to ASEAN and facilities such as the Asia Pacific Investment Facility (APIF), blending EU grants with loans. EU funding is provided to Civil Society Organisations (CSOs) and the Human Rights and Democracy Instrument (ex-IDHR, now HR&D). 

Between 2021 and 2027, Cambodia avails of EU diversified financial products to support private sector investments and access to responsible financing under the European Fund for Sustainable Development Plus (EFSD+).

Agriculture is one of Cambodia’s main economic pillars and primary sectors of employment, however, labour productivity remains low. Poverty is most widespread in rural areas, particularly among ethnic minorities. The EU aims to streamline sustainable resource management to fight poverty.

1. Fisheries

Through the on-going €112 million CAPFISH programme, ending in 2025, the EU is focusing on the critically important environments of the Tonle Sap Lake and coastal areas in the south. In partnership with the Royal Government of Cambodia, Agence Française de Développement (AFD), Food and Agriculture Organisation (FAO), UNESCO, UNIDO and civil society, the EU is supporting sustainable, resilient and inclusive development in the fisheries and aquaculture sectors. There is a particular focus on the conservation and protection of habitats, sustained levels of catch, aquaculture growth and adding value post-harvest.

Among several key achievements, the EU supports the Fisheries Administration (FiA) to increase marine and inland fisheries patrols in Cambodia. This aims at reducing illegal fishing activities, contributing to sustainable and inclusive growth in the fisheries sector. 

Within the priority area, the EU additionally promotes the sustainable management of forests, biodiversity and coastal areas, and takes a human rights-based approach to land distribution and titling for indigenous people.

The EU-German Cambodia Partnership for Sustainable Agriculture and Food Systems (EU-German CAPSAFE) exemplifies the Team Europe initiative, implemented by the Ministry of Agriculture, Forestry and Fisheries (MAFF) and GIZ. It focuses on strengthening climate resilience in the cashew nut and pepper value chains across four provinces: Kampong Thom, Kratie, Tboung Khmum and Kampot. Co-funded by €24.3 million from the EU and the German Federal Ministry for Economic Cooperation and Development (BMZ), the programme aims to enhance food safety and promote climate-resilient agricultural practices while improving productivity for smallholder farmers. Additionally, it supports micro, small and medium enterprises (MSMEs) in enhancing processing capacity to comply with food safety, social and environmental standards. This comprehensive approach seeks to boost local processing capabilities, facilitating exports to EU and regional markets, while ultimately empowering farmers, enhancing livelihoods and promoting sustainable agricultural practices.

A joint investment with AfD, the rollout of Bakheng Water Treatment Plant -- Phase 3 will take place from 2025 to 2030. This phase is designed to respond to the increased water demand in Phnom Penh and suburb areas of 1.8 million m³/day by 2030. The project will add 195 000 m³/day with a new water production facility, along with the network extension and reinforcement to enhance coverage, water pressure, water quality, and service continuity for all Phnom Penh population,  poor communities and industrial zones and neighbouring Phnom Penh.

Bakheng Phase 3 include capacity building for the PPWSA - in managing efficiently and in a cost-effective manner its investments, operation, maintenance, communication, and service delivery. The Capacity building programmes will embrace a systemic collaboration with universities and/or professional training institutions specialised in the water and sanitation engineering

The preparation of a master plan for greater Phnom Penh water supply and for a selection of secondary cities (Siem Reap, Battambang) to assess and elaborate on the socio-economic, water demand, water resources, institutional capacity, technical and investment need until 2040 will form part of Bakheng Phase 3. 

The industrial sector in Cambodia has shown strong growth in the past decade, resulting in a steady increase of its share in total gross domestic product (GDP), from about 23% in 2010 to 37.67% in 2022. The garment, footwear and travel goods (GFT) sector represent 64.8% of exports (2022) and 670,000 jobs (2021), out of which more than 80% are women. 

However, competition in the region is increasing and, from investors’ perspectives, Cambodia’s competitive advantage compared to Vietnam and Bangladesh is weakened by high-energy costs, a comparatively high minimum wage, lagging infrastructure, low productivity and high cost of logistics. 

There is an opportunity for Cambodian factories to green their production to its advantage. An increasing number of international brands, to which Cambodian factories are supplying garments, have set corporate targets to lower the environmental footprint of their supply chains.

Cambodia is among the countries most vulnerable to climate change worldwide. Seasonal flooding and droughts are set to intensify as rainfall patterns change, while deforestation is a major contributor to rising greenhouse gas emissions and the rapid loss of biodiversity. Cambodia’s vulnerability stems from additional factors, including heavy dependency on climate-sensitive sectors such as agriculture, water resources and fisheries, and the country’s low adaptive capacity. These are the sectors that the EU and European partners have been actively supporting. The EU’s programmes on fisheries, agriculture, water and energy, to name a few, focus on strengthening the resilience and sustainable management of these resources in the face of climate change and biodiversity loss.

The EU is also actively promoting a green Public Financial Management approach in our Public Financial Management Reform (PFM) programme with the Ministry of Economy and Finance (MEF). This approach aims to adapt existing PFM practices to support climate-sensitive policies, such as greener investments, greener public procurement and sustainable finance instruments, including green bonds, which are key for mobilising finance for Cambodia’s ambitious climate commitment.  

Through the EU flagship SWITCH Asia Programme, the EU support projects aiming to reduce pollution and GHG emissions in Cambodia through improved sustainable packaging and effective sustainable waste management practices. This is achieved by supporting MSMEs to switch to environmentally and economically sustainable food packaging business models, and waste collectors to adopt environmentally and economically sustainable waste management practices and plastic recycling business models. The EU through the SWITCH Asia programme also supports sustainable agri-food systems through the utilisation of proven circular economy and resource-efficient practices that results in a reduction of Greenhouse Gas emissions and increase economic growth in rural Cambodia. 

The EU jointly invests with AFD to modernise the electricity grid, with the aim of ensuring it can distribute larger amounts of solar and other green energy in the future.

Education is one of the most powerful tools to empower and strengthen people. 

Team Europe, which comprises the EU, EU Member States and their implementing agencies and public development banks, as well as EIB and the European Bank for Reconstruction and Development (EBRD), has supported the education and skills of young Cambodians for more than 20 years. The EU has been working with the Government, United Nations and civil society, including universities and the private sector, to improve access to and the quality of primary, secondary and tertiary education for all Cambodians. 

In the past 10 years, the EU has committed more than €215 million to crucial national education reforms. Over 250,000 scholarships are now foreseen in the national budget and granted annually to students. In addition, Cambodia now performs regular learning assessments, kindergartens have doubled, schools for school functioning have increased by over 70% and are now disbursed on time, and 17,000 personnel are trained every year.  These concrete outputs have resulted in Cambodian children – both boys and girls – staying longer in school, benefitting from teachers that are more qualified and a better school environment, even if many challenges remain. 

Education and skills remain a strong priority for EU intervention in Cambodia for the 2024-2027 period. The EU-Cambodia Education Partnership in Education for Green and Digital Jobs brings investments to produce the middle- to high-level technicians the country needs to implement its industrial policy, in the short- and medium-long terms.

The current work focuses on reducing gender barriers to accessing secondary and tertiary education, with an emphasis on Science, Technology, Engineering and Maths (STEM) subjects, aiming to prepare students for careers in climate-change adaptation and mitigation, hand-in-hand with digitalisation. Peer-to-peer exchanges with European teachers and civil servants will focus on improving the curriculum and teacher training to implement a European-inspired, Cambodian-adapted Work-Based Learning, in line with private sector needs. A total of 500 university scholarships in STEM will be included in the national budget. The EU flagship Erasmus+ programme continues financing exchange programmes for students and lecturers between Team Europe and Cambodia. Cambodia is the fifth country in Asia to receive funds for Capacity Building in Higher Education. Annually, the EU organises a Study in Europe Fair to showcase to Cambodian students the value-for-money quality opportunities of pursuing higher education in Europe. 

The EU and its Member States strongly believe that education and skills are essential building blocks towards the sustainable development of Cambodia and its further integration within ASEAN, and the world.

Human rights and democracy, founding values of the EU, are cornerstones of the EU’s external activities. To implement and further advance universal values for all, the EU adopted the EU Action Plan on Human Rights and Democracy (HR&D) 2020-2024 with its overarching priorities: 

1. Protecting and empowering individuals

2. Building resilient, inclusive and democratic societies

3. Promoting a global system for human rights and democracy

4. Harnessing the opportunities and addressing challenges of new technologies

5. Delivering by working together 

Together with EU Member States, the EU is at the forefront of the implementation of the Action Plan at the country level. Implementation is carried out in close cooperation with other countries, regional and international organisations and CSOs.

The HR&D programme is a key financial instrument in supporting CSOs working in these areas, which also include gender equality and women empowerment. 

Furthermore, the EU contributes to the strengthening of the rule of law, and consultancy support has been provided to develop a legal aid policy and alternative dispute resolution mechanisms. The EU partners with the Office of the United Nations High Commissioner to promote the rule of law and human rights in Cambodia.

A strong civil society, in all its diversity, represents a crucial component of any democracy. Civil society helps foster pluralism and can, among other things, contribute to more effective policies, equitable development and inclusive growth. 

CSOs are key partners to the EU in devising and implementing policies and programmes that meet people’s needs, reduce inequalities, deliver inclusive services and fulfil the commitment of the 2030 Agenda to leave no-one behind. 

In Cambodia, the EU has supported focusing on topics, such as land rights, environmental conservation, gender equality, education and rural development. 

Cambodia, as a Least Developed Country, benefits from duty-free and quota-free access to the EU for all products, except arms under the Everything but Arms (EBA) scheme as part of the Generalised Scheme of Preferences (GSP).

Preferential access under the EBA scheme has been one of the main drivers of the Cambodian economy and in particular for the garment and footwear sectors, stimulating economic growth and jobs.

The granting of EU trade preferences is, however, subject to the respect of human rights and fundamental freedoms, including labour rights, as a crucial part of EU trade policy. On 12^th February 2020, the European Commission decided to suspend part of the tariff preferences granted to Cambodia under the EBA scheme due to serious and systematic violations of the human rights principles in Cambodia, enshrined in the International Convention on Civil and Political Rights. The decision took effect on 12^th August 2020.

The EU Access2Markets (A2M) online portal provides information on EU market access.

In order to promote activities of European companies in Cambodia, the EU supports the ASEAN IPR SME Helpdesk. This is an assistance service for SMEs from the EU and other Single Market Programme countries that operate in, or intend to access, the Southeast Asian market and want to improve their global competitiveness.

To improve the overall business climate, the EU works in close collaboration with the European Chamber of Commerce in Cambodia (EuroCham). EuroCham plays a key role providing advice to the Cambodian Government on issues related to the business environment affecting, in particular, EU investors. Its recommendations are published online in the advocacy compass https://www.eurocham-advocacy-compass.com/.

The EU, jointly with Germany, supports Cambodia’s greater economic integration within ASEAN, as well as enhanced commercial relations with the EU. This is achieved by improved customs, trade facilitation and standards, improved regulatory practices, and enhanced private sector engagement.