From January 2022, Cambodia takes over as the Chair of ASEAN for one year, a period during which Cambodia will have the onus of agenda setting, critically impacting how the grouping moves forward on key vital issues. Two of these issues, will be the Code of Conduct for the South China Sea and the unrelenting turmoil that has engulfed Myanmar. While the larger question of steering the ASEAN processes will impact the region-wide mechanism and how it is perceived in the face of far ranging changes in the Indo-Pacific, there remains a more immediate implication for Cambodia itself. The country looks well and truly caught in the midst of great power rivalry, even as the implications for its own strategic autonomy look increasingly tenuous.

On 8th December 2021, the US State and Commerce Department added Cambodia to an existing list of countries that are covered under an arms embargo with new export restrictions on military assistance. While ostensibly the focus of this embargo was to do with human rights excesses and increasing cases of political corruption within the country that has been led by Prime Minister Hun Sen for nearly 36 years, there is a growing recognition of the close ties that Cambodia has with China. Cambodia today has emerged as a foremost ally of China in a fast changing Indo-Pacific region, which remains the more likely reason for the US embargo. Cambodia has not received any arms from the United States since 1973, when the Lon Nol government was in power in Cambodia.

The Lon Nol government itself was very close to the United States during the height of the US engagement with Vietnam during the Second Indochina War. The extension of the conflict with Vietnam also had far reaching implications on both the neighbouring states of Cambodia and Laos. Almost from that period onwards Cambodia has not received any munitions from the United States and increasingly the bilateral relations between Cambodia and the US has been on a downward spiral as the country has grown economically and politically closer to China.

In the context of the current embargo the United States has also removed the GSP privileges that linked its trade to Cambodia. The GSP is the Generalized System of Preferences (GSP) which is a trade agreement between two countries that are unevenly matched in the economic domain. This links a developed and developing country together through trade practices, where the trade preferential favours the developing country. The revocation of Cambodia’s GSP benefits with the United States has been in the offing since last year itself when the European Union (EU) revised its trade preferences for Cambodia on conditions of human rights violations within the country. In August 2020, the EU regulation on withdrawal of preferential tariffs came into effect, even while the process had been under consideration since 2019 itself. The trade preference that Cambodia had with the EU was a privileged one under the title of “Everything but Arms” (EBA), which allowed Cambodia to export its products into the EU with duty free access to EU markets. This access was removed on nearly 20% of Cambodian exports into the EU, while the remaining 80% of exports are still covered under the preferential scheme.

The removal of the GSP from its bilateral trade with the US will also hit the Cambodian economy hard, reducing further the leverage to pull it away from China’s stranglehold. On the contrary these measures will push Cambodia closer into the Chinese grip. As domestic impact often has a critical linkage to foreign policy this will implicate how Cambodia steers the key issues concerning ASEAN as the chair for the year 2022.

The two key issues where Cambodia needs to move cohesively with ASEAN states relate to the South China Sea and the Myanmar question. Repeated incursions by China into the Exclusive Economic Zones (EEZ) of the ASEAN states have heightened the security dilemma on the maritime regions. Cambodia’s chairmanship during the ASEAN summit of 2012 was seen as a clear indication of the control that China exercised over Cambodia.

This coming year will remain critical in assessing how Cambodia can steer the ASEAN agenda. One indicator was the Joint Statement that was brought out during the state visit of the Vietnamese President Nyugen Xuan Phuc to Cambodia recently, which highlighted the relevance of the UNCLOS and the importance of settling the dispute within the ASEAN framework of the DOC and a move towards a binding COC. But the Joint Statements of high level visits tend to remain more symbolic than real, and this will remain the real test for Cambodia’s ASEAN chairmanship.

Similarly, matters concerning Myanmar will be at the forefront of the ASEAN agenda. Recently Cambodia appointed its Foreign Minister Prak Sokhonn as the next ASEAN envoy to Myanmar. There are also reports that Prime Minister Hun Sen will be making a state visit to Myanmar in early January to meet with the military leadership to resolve Myanmar’s political crisis. However, this is fraught with complexities on two aspects – first, Prime Minister Hun Sen himself has come under repeated criticism on his handling of the opposition within Cambodia, which has become almost non-existent. The recent falling out between both Sam Rainsy and Khem Sokha has rendered the opposition rudderless, leaving little scope for any challenge to the existing leadership.

Moreover as Prime Minister Hun Sen is grooming his son as his successor, the scope for any meaningful political reconciliation within Cambodia itself is limited. This begs the question whether it can truly act to heal the political divide in Myanmar. Second, Hun Sen has categorically stated that Myanmar’s military leaders can attend the ASEAN summits, which again limits the effectiveness of ASEAN’s approach to resolving the crisis. Cambodia’s role as the Chair must adhere to the practices of the grouping, which will ensure continuity on both these key issues. It will be critical to watch Cambodia over the course of the next year as it steers itself and the ASEAN.

Professor Shankari Sundararaman is Professor of Southeast Asian Studies, School of International Studies, Jawaharlal Nehru University, New Delhi.