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EU sanctions unlikely, experts say

May Kunmakara / Khmer Times Share:
A garment factory near Phnom Penh. KT/Ven Rathavong

Following a statement from the European Union on Monday in which it said it is reviewing the preferential trade treatment it gives Cambodia, government officials, business leaders and industry insiders on Tuesday said economic sanctions from the European bloc are an unlikely scenario.

In the statement, EU foreign ministers expressed concern over the deterioration of democracy in the country, as well as the government’s lack of respect for human rights and the rule of law, and mentioned the escalating repression against the political opposition, the media and civil society.

The European ministers urged Cambodia to restore democracy and asked the government to engage in a constructive dialogue with the elected opposition.

They also urged Cambodian authorities to take all the necessary measures to ensure a political environment in which opposition parties, civil society and the media can operate freely.

The statement pointed out that the EU is Cambodia’s biggest export market, and that the European bloc grants the kingdom preferential access to its vast market under the Everything-but-arms (EBA) scheme.

“The Council recalls that respect of human rights and fundamental freedoms, including labor rights, is also a crucial part of EU’s trade policy and underpins the granting of EU trade preferences. The Council invites the Commission to enhance the monitoring of the situation and to set-up the engagement with Cambodia,” the statement said.

“In view of recent developments, the Council may consider specific targeted measures if the situation doesn’t improve.”

Chum Sounry, spokesman for the Ministry of Foreign Affairs, told reporters on Tuesday the government’s foreign policy aims to build close relations with other countries based on the principles of understanding and mutual benefit, as well as independence, autonomy, and no interference in the internal affairs of other nations.

“Cambodia is committed to maintaining good relations and cooperation with the EU based of these principles and hopes that the EU will take the same position.

“It might be too early to say, but I don’t think they will impose any sanctions,” said Mr Sounry.

Kaing Monika, deputy secretary general of the Garment Manufacturers Association of Cambodia (GMAC), told Khmer Times that based on improving labour conditions in the country, including the ongoing raise of the minimum wage in the garment industry, the EU is not likely to levy any economic sanctions on the kingdom.

“There’s been remarkable improvement in working conditions and the respect of workers’ rights through the rights to freedom of association and collective bargaining.

“The development in the social security scheme and the yearly wage adjustment are also positive points for the workers. These factors will continue to ensure our preferential access to the European market,” said Mr Kaing.

A report released last month by Better Factories Cambodia (BFC), a programme of the International Labour Organisation, found that compliance in the garment industry with working conditions regulations has improved substantially in the last four years.

Van David, executive director for Deewee Management Consultants, told Khmer Times that he is not concerned about the EU statement.

“What the EU has expressed in its statement in vague format is a concern over some of the latest political developments in Cambodia, but it would be surprising if the EBA is revoked given that the decision will only have an impact on the general population, and will not affect actual members of the government,” he said.

Stephen Higgins, managing partner at Mekong Strategic Partners, said that EU has a clear and lengthy procedure to follow before this type of sanctions can be levied.

“It would be disappointing if the EU pulled out of the EBA with Cambodia, as it would significantly harm many innocent workers at the bottom end of the socio-economic pyramid,” he said.

“If the EU wants to express its displeasure, there are more effective ways of doing so that wouldn’t harm so many innocent people.”

The EU is the biggest market for the kingdom’s garment and footwear industry, accounting for roughly 40 percent of exports.

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