The European Union on Friday said they are considering the removal of Cambodia from its Everything-but-arms (EBA) trade scheme as a worst case scenario in the case that the political and human rights situation in the country does not improve.
In a statement issued after a week-long fact-finding mission by EU dignitaries to the Kingdom, EU Commissioner for Trade Cecilia Malmström said abolishing Cambodia’s preferential trade status with the EU was on the table.
“The discussions and information gathering during our EU mission have focused on the serious decline in the area of political and electoral rights, as well as a curbing of civil society activities,” the statement said, mentioning also deficiencies in land dispute mechanisms, and threats to freedom of association and collective bargaining rights.
“Following the fact-finding mission, we will now analyse the facts in detail, and consider further steps. Removing Cambodia from the trade scheme is a measure of last resort, if all our other efforts have failed to address these concerns,” it said.
The Everything-but-arms (EBA) is an initiative of the EU under which all imports to the EU from the Least Developed Countries are duty-free and quota-free, with the exception of armaments. 47 countries are currently in the programme, including Cambodia.
The statement said the EU will now analyse the information collected during its meetings last week with Cambodian officials, international organisations, NGOs, employers’ associations and unions to consider further steps.
The analysis will also take into account further written submissions from the Cambodian authorities, reports of the International Labour Organisation (ILO) and other bodies responsible for monitoring the implementation by Cambodia of the international conventions relevant to the EU duty-free trade scheme, the statement said.
Despite the warnings, the EU statement did acknowledge the EBA’s contribution to the development of Cambodia.
“The EU is proud to provide the most economically vulnerable countries of the world with free access to our market.
“The Everything-but-arms initiative has had a significant impact on development and poverty eradication in Cambodia. Nevertheless, the recent worrying developments in the country have called for a closer assessment of whether Cambodia is fulfilling its commitments,” Ms Malmström said.
Kaing Monika, deputy secretary general for the Garment Manufacturers Association in Cambodia (GMAC), an association present in discussions with the EU last week, told Khmer Times he believes the EU will refrain from booting Cambodia out of the trade scheme.
“As we know the economic impact of the EBA for Cambodia has been tremendous. It has helped built Cambodian trade with the EU, particularly in the garment, shoes and rice segments.
“Based on our performance, we are quite sure that we won’t be wrongly punished. The EU market would continue to be one of our most important markets in terms of textiles and shoes exports for many years to come,” Mr Monika said.
The EU is Cambodia’s main export destination, accounting for 40 percent of all Cambodian exports. These exports have risen sharply in recent years, increasing by 227 percent between 2011 and 2016, and reaching €5 billion in value last year alone. Cambodia now is second amongst all EBA beneficiaries in terms of trade volume.
The EBA has contributed in particular to significant job creation and growth in the textile sector, which accounts for 75 percent of Cambodia’s exports to the EU, providing employment for some of the most vulnerable sectors of Cambodian society.