GMAC’s confidence on EBA may be premature

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Kaing Monika, deputy secretary-general of GMAC . KT/Mom Sophon

Last week, the Garment Manufacturer’s Association of Cambodia (GMAC), said that a full withdrawal of the Kingdom’s everything-but arms trade status is unlikely.

Mr. Kaing Monika, Deputy Secretary-General of GMAC, said that that he was ‘quite confident’ Cambodia’s garment industry is less likely to be subjected to the withdrawal of the EBA considering the ripple effects of the industry on Cambodia’s socio-economic development and poverty reduction.

“We are working to address points of concern that the EU perceive as setbacks to labour rights post- 2016, and those points are not really difficult to rectify.” Mr. Monika noted that labour trends in the country are positive and any speculation that the EBA will be withdrawn is alarmist and harms the garment sector as it affects investor confidence. The statement may be premature given the outcome depends on the decision of the fact-finding mission from the EU.

While we hope and pray that GMAC’s confidence will be proved right, it is would nevertheless pertinent to note that the Cambodian garment industry is slowly but surely becoming noncompetitive in terms of pricing, labor, utilities cost and with all the “feel good goodies” doled out by the government in an effort to mollycoddle the garment and footwear industry workers as though each year is an election year.

This compounds matters as workers’ demands and expectation keep increasing exponentially but it does not keep pace with the level of productivity.

Despite all the privileges dished out to the garment and footwear sector, the workers are still not satisfied, expecting more and more each year, without taking a good and critical look at themselves to gauge their own productivity level amidst competition with regional countries which have better skills and cheaper production costs with more reliable infrastructure.

It is time for GMAC to realise that EBA is not merely a unilateral issue by the EU. It is unfortunately a trade weapon used by the EU to punish Cambodia over geopolitical and domestic issues and that the garment sector is just a powerful strategic tool by default which is simply too difficult to resist as the sector accounts for $6 billion of Cambodia’s export.

It might be a mistake to believe that partial suspension is the most likely outcome. The EU fact finding mission team might jump to a conclusion that Cambodia is not sincerely committed to addressing the EU’s demands.

No doubt, the Cambodian government has done its best to meet the demands from the EU. However, there is a red line which is the reinstatement of the outlawed Cambodia National Rescue Party (CNRP).

A better narrative would be to say that GMAC is working hard alongside the government to meet the EU’s demands, especially the improvement of labour standard. GMAC hopes that the EU would recognize positive developments and as such, believe that the EU would be reasonable and fair in their assessment, taking into consideration that EBA has significantly contributed to poverty reduction in Cambodia.

EBA has been the EU’s flagship trade instrument designed to assist least developed countries to take advantage of trading opportunities. In the 2016-2017 report, there were 49 EBA beneficiaries and Cambodia is one of them.

The EU has stated that through enhanced engagement, the EU has intensified the dialogue with some EBA countries, Cambodia included, to press for concrete actions on and sustainable solutions to serious shortcomings in respecting fundamental human and labour rights.

If the dialogue fails to produce results, the EU is ready, as a last resort, to launch the EBA withdrawal procedure with due consideration for the economic and social impact of such a withdrawal.

However, it is accused that the EU is exercising double standards. In March this year, Cambodia’s foreign minister stated publicly that Cambodia was unfairly treated by the EU. He said, the EU applied double standard on Cambodia.

The question is why the EU choose to punish Cambodia stronger than others. Is it purely about human rights and democracy? The answer is “No”.

The EU’s coercive measure on Cambodia is well coordinated with the United States. The US is also threatening to withdraw GSP from the Kingdom for the same reason – they perceive that Cambodia has lost its sovereignty and independence to China.

Thus punishing Cambodia can be implicitly understood as punishing China. This by itself, could be the ultimate goal of the EU and the US.

However, no viable alternatives have been provided by either of them for the billions in infrastructure development forked out by the Chinese year on year.

Thus, EBA for trade or EBA to infringe into domestic politics and issues of sovereignty?

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