With a new prime minister taking over in Cambodia for the first time in decades, the European Union looks set to give the new administration the opportunity to improve relations before deciding whether to escalate punitive measures in response to the country's democratic deterioration.

Hun Sen, who has been in power since 1985, announced late last month that he will be stepping down as premier after his ruling party had days earlier won a landslide victory in a rigged general election from which its only viable challenger was disqualified.

Hun Manet, Hun Sen's eldest son and a former military chief, formally took the job on Tuesday after the rubber-stamp National Assembly voted in a new cabinet.

Cambodia's democratic deterioration

Brussels has been a vocal critic of democratic deterioration in Cambodia since 2017, when the largest opposition party, the Cambodia National Rescue Party (CNRP), was forcibly dissolved on the spurious charge of plotting a United States-backed coup.

Its leader at the time, Kem Sokha, was arrested for treason. He was sentenced to 27 years of house arrest in May this year.

In 2020, the EU punitively reinstated tariffs on around a quarter of Cambodian exports that had previously been duty-free under the Everything But Arms (EBA) preferential trade scheme.

The EU is Cambodia's fourth-largest trading partner. In 2022, Cambodia exported €5.5 billion ($6 billion) worth of goods to EU markets, up from €3.5 billion the previous year.

Relations improved somewhat last year when Cambodia held the annually rotating chairmanship of the ASEAN bloc. It co-chaired the first EU-ASEAN summit in Brussels last December and was one of the few Asian countries to explicitly condemn Russia's invasion of Ukraine, which earned it plaudits in the West.

However, the Cambodian government's sweeping crackdown on dissent at home this year, including the closure of independent newspapers and disqualification of the main opposition party, have soured relations again.

In a resolution passed in March, the European Parliament called on the European Commission and the European Council, the forum for heads of EU member states, to increase the punitive trade measures under the EBA scheme and to impose targeted sanctions on Cambodian officials.

The EU described July's general election in Cambodia as being "conducted in a restricted political and civic space, where the opposition, civil society and the media were unable to function effectively without hindrance."

EU sanctions unlikely

According to an EU diplomatic source, who spoke with DW on the condition of anonymity, targeted sanctions are unlikely. That decision would have to be made by the European Council, and several member states would be opposed to those measures.

France, for example, has improved relations with Phnom Penh since late 2022, when outgoing Prime Minister Hun Sen visited President Emmanuel Macron in Paris.

The source also said that further withdrawal of trade privileges is improbable, as Brussels now thinks that its measures in 2020 had almost no impact on Cambodian domestic politics. Instead, the thinking went, their only effect was to destabilize conditions for workers in the country's export-driven textile factories.

Instead, the EU will take a "wait-and-see" approach as to whether "the new blood can bring about rapprochement with the West," said Ou Virak, president of Future Forum, a Cambodian think tank.

He added that Brussels probably expects concrete concessions from the new Hun Manet administration, with the release of Kem Sokha, the detained CNRP leader, likely at the top of their agenda.

There has long been speculation that Kem Sokha could be pardoned in return for his agreement to quit politics.

A change in Cambodian politics?

Alongside Hun Sen's own dynastic succession, Cambodia's entire political establishment is also undergoing a vast generational shift. The children of many ruling grandees will move up the ranks alongside Hun Manet.

The sons of Interior Minister Sar Sokha and Defence Minister Tea Banh are tipped to directly succeed their fathers, while other children of political elites will make up a reshuffled cabinet.

Almost the entire generation of politicians who came to power in the 1980s, after the CPP's antecedent ousted the genocidal Khmer Rouge, will retire this month to make way for politicians mostly in their forties.

Whether or not this brings about any meaningful political change in Cambodia remains to be seen.

Hun Manet inherits a system where patronage and corruption are integral to his ruling party's political survival, analysts say, while there appears to be little prospect that his neophyte administration will allow a meaningful opposition party to exist legally. Hun Sen is expected to still pull the political strings from behind the scenes.

What's more, Hun Manet is unlikely to distance his government from China, which is a key ally and the largest provider of foreign investment in Cambodia. Wang Yi, China's reinstalled foreign minister, visited Phnom Penh on August 13. Hun Manet is expected to visit Beijing and Washington for international summits next month.

However, some analysts suggest Hun Manet may prove to be temperamentally less suspicious of the West than his father, who grew up during the illegal US bombing of Cambodia, and more inclined to seek a more stable relationship through rapprochement.

Hun Manet was educated at the elite West Point military academy in the US and at the University of Bristol in the United Kingdom.

"We do think that this generational change in leadership will have a positive impact on business, trade and investment, but we know relatively little yet about the incoming government's vision and concrete strategy for the development of the economy," said Tassilo Brinzer, chairman of European Chamber of Commerce in Cambodia.

He told DW there's confidence the new government will cut red tape, focus on renewable energy and sustainability, and offer more equal governance for international businesses.

EU focuses on corruption

On August 16, the EU's outgoing ambassador to Phnom Penh, Carmen Moreno, held a farewell meeting with Cambodian foreign minister Prak Sokhonn. "The good heritage forms a solid basis for a diversified future partnership," stated a foreign ministry readout of the meeting.

In September, Moreno will be replaced by Igor Driesmans, the current EU ambassador to the Association of Southeast Asian Nations (ASEAN), who could set out to fashion a new EU policy in the country.

"We will continue to work with Cambodia's new government and will not prejudge how it may or may not perform in the coming months," a European Commission spokesperson told DW.

However, the spokesperson added that the EU "intends to step up our engagement to tackle corruption worldwide. We already engage the Cambodian government on these issues, for example, as regards the provision of land concessions."

The EU's conclusions from its "wait-and-see" approach could be revealed later this year when the 12th Cambodia-EU Joint Committee Meeting is held in Brussels.

Edited by: Wesley Rahn