By Phorn Vicheka
As a small nation with a limited domestic market, Cambodia depends on an export-oriented policy to sustain its economy. Active engagement in regional and global trading systems, such as ASEAN and the World Trade Organization frameworks, underscores the country’s commitment to multilateralism.
The shifting dynamics of global trade, combined with rising protectionism and intensified competition, present a challenging path for Cambodia. The country’s ambition to graduate from least developed country (LDC) status by 2029 represents an immense task for both the government and its people.
While Cambodia has long relied on preferential trade arrangements, its journey toward LDC graduation requires a more resilient and holistic approach – one that emphasizes market liberalization, integrated supply chain linkages and institutional reforms.
Growing protectionism, trade tensions and geopolitical uncertainties are reshaping the future of globalization and pose significant challenges for small economies such as Cambodia. Protectionist measures limit opportunities for cooperation and often trigger retaliatory actions, creating a cycle of escalating trade barriers that disrupt global supply chains and undermine economic stability.
Cambodia’s Challenges
The decline of multilateralism and the liberalized trade systems pose implications for small states such as Cambodia. The rise of protectionist trade policies among major global markets, particularly the United States and the European Union, is especially concerning for Cambodia, given its heavy reliance on these export destinations.
Cambodia currently benefits from preferential schemes such as the US Generalized System of Preferences (GSP) and the EU’s Everything but Arms (EBA).
However, these trade privileges do not come without conditions, and their continuation depends on Cambodia’s compliance with various political and economic requirements and often leaving the country’s economy overreliant on foreign powers.
On April 2025, the US announced the Reciprocal Tariff measure towards its trading partners across the board. Cambodia was imposed with the initial rate of 39 percent of tariff on trade in goods exported to the US market. It was only after rounds of negotiation that Cambodia maintained the tariff reduction to 19 percent.
Besides, the imposition of unilateral tariffs, export controls, and subsidies are restructuring international trade practices, which in turn weakens the liberalized and interdependent global trade system.
We can see that through the decline of the WTO trade system. Throughout its 60 years’ experience, the WTO trade regime has become very significant in regulating global trade.
Small countries such as Cambodia, rely on the established rule-based trade system and practices as the pinnacle for their growth and development. The significance of WTO can be understood by Cambodia’s economic liberalization policies and institutional reforms. Cambodia accession to the WTO in 2004, has been a strategic pillar of growth for the country’s socio-economic development.
Opportunities
In light of the declining global trade order, we are also witnessing the emergence of focused trade blocs such as the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the Indo-Pacific Economic Framework (IPEF), alongside other mini-lateral initiatives.
These forms of cooperation provide valuable avenues for smaller states to engage collectively in response to the fragility of global trade institutions.
There is an apparent shift from reliance on global trade governance under the World Trade Organization (WTO) toward more regionalized frameworks and groupings.
This trend reflects the recognition by middle powers and smaller states of the limitations and uncertainties inherent in the established global trade system, which further motivated them to pursue regional alternatives that promise stability and opportunity.
For Cambodia, this transition presents both opportunities and challenges. As a small state, Cambodia stands at a critical juncture: the weakening of global trade institutions necessitates a timely and strategic pivot toward deeper regional integration and focused multilateralism to safeguard its economic interests and enhance resilience in the shifting global economic landscape.
Moving forward, Cambodia should pursue a proactive strategy in advancing regional economic integration. While deepening and strengthening ASEAN remains a central priority, the Country’s vision should extend beyond intra-ASEAN cooperation.
Cambodia should expand its economic engagement with the wider international community, especially like-minded medium and small states. Strategic partnership and mini-lateral groupings with these like-minded countries provides critical leverage in navigating the complex and increasingly challenging global trade order.
This opinion reflects the author’s personal perspective and does not represent the views of the Asian Vision Institute or any other institution.
Phorn Vicheka is research associate at the Center for Advanced Research on Legal Studies of the Asian Vision Institute.
