Political Risks Inherent in Foreign Investment Regarding Tariffs : A Recent Example From Cambodia

This article looks at the risks inherent in foreign investment using Cambodia as an example. Companies are either investing in Cambodia to establish factories for export of garments, or are using Cambodian based suppliers for supply of garments. This development was based upon the availability of cheap labour in Cambodia, as well as duty free entry of these goods to the European Union and other developed stated. The EU is now in the process of imposing hefty tariffs on imports from Cambodia, both for economic as well as human rights reasons. The article therefore suggests various methods that are available to investors to anticipate such risk factors and mitigate them to the extent possible