EU initiates process to withdraw Cambodia’s trade preferences

Sonny Inbaraj Krishnan and Ven Rathavong / Khmer Times No Comments Share:

The European Union officially notified Cambodia yesterday that the procedure for the withdrawal of its preferential trade treatment under the ‘Everything but Arms’ (EBA) scheme had already “been launched”.

Writing in the European Commission’s official blog, EU Trade Commissioner Cecilia Malmstrom said she and EU High Representative Federica Mogherini had notified Cambodia yesterday (Friday) that the EU was launching the process for the withdrawal of their EBA preferences.

“Without clear and evident improvements on the ground, this will lead to the suspending of the trade preferences that they [Cambodia] currently enjoy,” wrote Ms Malmstrom.

“In Cambodia, meanwhile, we are seeing very troubling developments with a clear deterioration of human rights and labour rights, without convincing improvements in sight,” she added.

“Our recent EU mission to the country demonstrated serious and systemic violations of, for instance, freedom of expression, labour rights and freedom of association. This comes on top of longstanding issues as regards workers’ rights and land-grabbing.”

Ms Malmstrom pointed out that Cambodia benefitted from the EBA, which guarantees completely tariff-free access to the European market for all exports except for weapons and ammunition.

“However, this access is not without conditions. It comes with a responsibility to uphold and respect the values enshrined in 15 fundamental conventions of the United Nations and the International Labour Organisation,” she wrote in the EU blog.

“As I have underlined many times as Commissioner for Trade, our EU trade policy must be led by our values. Accordingly, when we are faced with blatant disregard for those values, the EU must act,” she added.

The EU is Cambodia’s top export destination, accounting for 40 percent of all its exports. These have risen sharply in recent years, increasing by 227 percent between 2011 and 2016, and reaching $5.77 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.

Som Aun, president of the National Union Alliance Chamber of Cambodia, told Khmer Times that Cambodian workers depended on the garment and footwear sectors for their livelihoods and should not have to suffer setbacks to their lives via an EBA cancellation motivated by political reasons.

“We strongly urge the European Union to carefully consider the impact of removing the EBA tariff system from Cambodia, which will directly affect the employment and livelihoods of about three million workers and their families,” he said.

But the EU’s Ms Malmstrom remained adamant despite the pleas.

“Our trade policy is value-based. These are not just words. We have to act when there are severe violations,” Malmstrom said after a meeting of EU trade ministers in Austria.

Ironically, EU Ambassador to Cambodia George Edgar’s views seem to be diametrically opposite to Brussels.

“Access to the European market has driven the very rapid expansion of Cambodia’s exporting industries, in particular, garment and footwear,” he told an event organised by the Club of Cambodian Journalists (CCJ) on Thursday, a day before the EU’s official notification was sent to Cambodia.

“At the same time, Cambodia’s exports to EU have grown very rapidly. Access to the EBA scheme has allowed the country to gain a competitive advantage, grow the economy and generate employment,” Mr Edgar said.

Cambodian government officials could not be reached for comments due to the start of the week-long Pchum Ben holidays.

Additional reporting by Reuters

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