The British Chamber of Commerce in Cambodia (BritCham) said the withdrawal of the Everything-but-arms (EBA) scheme under the European Union’s Generalised System of Preferences (GSP) risks making Cambodian factories commercially unviable while placing workers at the mercy of operators who might provide substandard working conditions.
In an Oct 17 letter to European Trade Commissioner Cecilia Malmstrom, BritCham chairman Trevor Sworn said the chamber supports EU’s commitment to the inclusion of developing countries like Cambodia into the global economy, and said that the removal of Cambodia’s preferential trade status would have adverse effects on the country’s ongoing economic progress.
“This would harm the very people the EBA arrangement sought to benefit. It will especially put at risk jobs within the garment industry who are at most risk from the withdrawal of the privileges.
“This is of particular concern given the high standards that British-owned and operated factories have implemented over the past two decades of building their operations in Cambodia, raising the working conditions for Cambodian employees, and being promoted as leading exemplars by United Nation’s International Labour Organisation,” he added.
The Oct 5 announcement by Ms Malmstrom that the European Commission has begun the process to withdraw the EBA has created uncertainty and confusion for current and prospective business development in Cambodia, he said.
Continuing uncertainty regarding the status of the EBA would negatively impact confidence on Cambodia and the investment decisions of those eyeing the Kingdom’s market.
Echoing his peers, including the European Chamber of Commerce and the American Chamber of Commerce, who have also written to Ms Malmstrom, Mr Sworn said the EBA withdrawal would negatively impact the progress made by Cambodia in rebuilding its economy and society from the ravages of the 1970s genocide.
It would also result in long-lasting damage to the relationship between Cambodia and the bloc, impact European commercial interests and competitive advantage here, undermine the many years of work developing business ties done by BritCham and other chambers, and drive Cambodia to engage more with China, he said.
“History has shown that these types of economic sanctions do not achieve the political change they aim to bring about.
“We have developed strong and beneficial relationships with the government and its business sector. This work and goodwill toward the EU would be detrimentally affected if the sanctions are imposed. The great consequences of the EBA programme would be swiftly undone,” he said.
Thus, he urged the European Commission to clearly list the measures that Cambodia can implement to prevent sanctions of this nature.