"The United States and Cambodia maintain strong ties through aid and trade. Despite foreign aid restrictions, Cambodia is the third largest recipient of United States assistance in Southeast Asia after Indonesia and the Philippines. Most U.S. assistance has been channeled through the many non-governmental organizations that are active in the country. The United States is the largest overseas market for Cambodian goods, mostly textiles and apparel. With the termination of quotas on textiles by WTO member states in 2005, Cambodian exports are threatened by competition from China. Cambodia and other least developed countries (LDCs) are pressing the United States to grant their garment exports preferential treatment. Cambodia has made some notable progress, with outside help, in controlling the spread of infectious diseases, such as HIV/AIDS and avian flu, holding elections that are at least procedurally democratic, nurturing a civil society, engaging in counterterrorism efforts, and developing its economy. A number of significant problems remain, however. Weak legal and financial institutions, corruption, political uncertainty, and the autocratic tendencies of Prime Minister Hun Sen have discouraged foreign investment and strained U.S.-Cambodian relations. This report provides historical context, discusses political and economic developments in Cambodia, and raises policy issues regarding U.S.-Cambodian relations. These issues include U.S. foreign assistance to Cambodia, HIV/AIDS, human rights, terrorism, bilateral trade, the Khmer Rouge tribunal, and Cambodia's relations with China. This report will be updated periodically."
CRS Report for Congress, RL32986