Cambodia: a long time basket case in the Asia-Pacific region due to decades of violence and poverty, has been building their economy mainly through the preferential treatment of the EU with their textile industry. However, recent discoveries have jeopardized their current strategies for globalization, namely the EU's impending threat to discontinue trade with Cambodia due to human and labor rights violations. It seems that they are caught in a trap. Did someone say trap? Thanks to Collier, we know all about traps! Cambodia has fallen victim to several, the most prominent of which includes bad governance in a small country. The current government has taken action against the opposing party, to include jailing their leader and forcing other members to flee. This degrades the institutions that are supposed to hold the current party accountable, allowing for the current party to make poor policy choices (i.e. continue with human rights violations instead of negotiating with the EU). Although not landlocked, Cambodia doesn't exist in the wealthiest of neighborhoods, with Thailand, Laos, and Vietnam as their neighbors. Instead of trading with these partners, they must engage in competition with them since they all produce similar products for export, namely textiles and other simple goods. The EU ejecting Cambodia would raise tariffs on products that their competitors do not have to pay, which would severely hamper their economy. Since exports to the EU makes up 40% of Cambodia's market, such action could be disastrous for their economy, and thus the cycle continues.
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