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Cambodia’s garment, footwear sectors propose EU postpone EBA withdrawal

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Garment factory workers like those pictured are facing an uncertain future as major orders are lost. KT/Pann Rachana

The Garment Manufacturers Association in Cambodia (GMAC), the Cambodia Footwear Association (CFA) and the European Chamber of Commerce in Cambodia (EuroCham) on June 2 requested the European Commission to postpone its withdrawal of the ‘Everything But Arms’ (EBA) preferential trade scheme for 12 months so that the apparel, footwear and travel goods sectors recover.

Their joint letter to the EC said the COVID-19 pandemic has halted production and slowed global demand to a crawl, delivering a devastating blow to the country’s apparel, footwear and travel goods manufacturers and workers.

It said some 250 Cambodian apparel, footwear and travel goods factories have had to suspend operations and more than 130,000 workers in the sector, most of whom are women, have lost their jobs and this number is likely to rise sharply.

In the first quarter of the year, many buyers cancelled orders after they were completed or while under production, the letter said. It is estimated that the Cambodian apparel, footwear and travel goods sales in the second quarter of the year will likely fall by 50-60 percent on a yearly basis.

GMAC Chairman Van Sou Ieng said the EC’s scheduled August 12 implementation of the decision to withdraw the tariff preference for 20 percent of apparel imports, 30 percent of footwear imports, and all travel goods imports from Cambodia would be a massive blow to Cambodia.

“The EU must not ignore the gravity of the situation and the devastating impact of removing EBA benefits in August,” he added.

EuroCham chairman Arnaud Darc said the pandemic’s effects were not limited to Cambodia.

The EU is Cambodia’s largest trading partner, accounting for 45 percent of Cambodian exports in 2018.

Exports to the EU single market reached 4.9 billion EUR (5.5 billion USD) in 2018 – almost double the 2.5 billion EUR recorded in 2013.

The EU’s EBA decision becomes all the more painful when it has announced aid for garment workers in Bangladesh, using selecting aid and punishment for countries on dubious reasons.

According to Ecotextile, the European Union is providing €93 million (US$104m) to help support the estimated one million Bangladeshi garment workers who have either been laid off or permanently lost their jobs because of the COVID-19 pandemic.

It’s part of a €334 million US$373m) aid package from ‘Team Europe’ – which comprises the EU, its member states and European financial institutions – to help fight the pandemic in Bangladesh.

The European Union reportedly first planned to pay the affected RMG workers from May to September but factory owners asked for the scheme to be put back to July to December as the government had already agreed to help garment workers over the initial months of the crisis. VNA/Ecotextile

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