Cambodia and EBA

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Xinhua/Sovannara

The Everything But Arms (EBA) initiative is a unilateral preferential treatment offered by the EU to least developed economies with the aim of helping them develop their economy and reduce poverty. EBA has significantly contributed to improving the livelihood of millions of Cambodian workers and there has been a discernible improvement in labour conditions under the Better Factories Cambodia initiative.

The threat of the EBA suspension has occupied public discourse and policy debates for quite some time. The negotiation between Cambodia and the EU is in transition from confrontation to engagement, with a certain degree of hope that both sides could reach a consensus. It is expected that the EU would genuinely recognise commitments made by the Cambodian government in addressing the conditions and concerns raised by the EU. Moreover, the EU is expected to consider potential socio-economic risks and humanitarian impacts to be caused by the revocation of EBA.

From a Cambodian perspective, the EU has been exercising double standards and unfair treatment, singling out the Kingdom, while other countries in the Greater Mekong Subregion with worse records are let scott free. Such feeling of unfairness and unfairness might lead to discouragement to further improve conditions as expected by the EU.

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Some have accused the EU of using EBA as a strategic weapon to force Cambodia to heed its whims and demands which in turn intrudes into Cambodia’s sovereignty and its own brand of politics and democracy which puts national interest, civil order, political, security and economic stability above all else. There are also certain quarters that have linked the EU’s hardline approach to Cambodia as a reprisal against Phnom Penh’s close links with China – as Beijing makes inroads in the region to fill in the vacuum left by the US.

That the EU has time and again allowed itself to be swayed by the rhetoric and vitriol spewed out by the recalcitrant opposition and rogue union leaders does no justice to the gains made by the Cambodian government on matters which are supposed to have mattered to the EU, such as improving the lives and living standards of the 800,000 odd garment and foot wear industry workers, rice producers and others.

Cambodians from all walks of life have asked the EU not to suspend EBA. But if the EU insists on its political agenda to remove EBA, it would destroy the bridge of trust and hard-earned friendship between Cambodia and the EU. The EU’s international image will also be affected due to its practice of double standards. The unintended consequences would be disastrous: two decades of progress in socio-economic development that the EU has contributed towards the betterment of Cambodia could be derailed due to a lack of foresight.

Does Cambodia have a contingency plan?

Cambodia, as a least developed country, benefited from duty-free and quota-free access to the EU under the EBA scheme as part of the Generalised Scheme of Preferences. Respect of human rights and fundamental freedoms, including labour rights, was a crucial part of the EU’s trade policy and underpins the granting of EU trade preferences.

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It is high time Cambodia take stock of its situation and just tell the EU, “Thank you but now we will try and stand on our own feet”. Sovereignty, self-reliance, and self-determination have taken the center stage of Cambodia’s foreign policy. Therefore, it is impossible for Cambodia to compromise on its sovereignty just to gain sympathy from the EU.

In Cambodia’s system of politics where national security and political stability comes first, the EU has turned a deaf ear to the enormous gains Cambodia has made in all aspects Brussels has demanded improvement in – human rights, labour rights and better living standards and wages for Cambodian workers.

Over dependence on the EU’s EBA has lulled Cambodia into complacency so much so that many of its foreign direct investment policies and efforts to diversify its economy away from the garments and footwear sectors remains in the doldrums.

Where is our national pride and sovereignty when we subject ourselves to the mercy of others who do not acknowledge what we have been achieved and sincerely assist us to develop and modernise our country.

The removal of EBA might hit hard the garment and footwear industries. Hundreds of thousands of factory workers will become more vulnerable to job and income losses. The Cambodian government needs to invest a huge amount of financial resources to build other skills for workers to work in light manufacturing and the service industries.

The government needs to improve the investment climate so that “good” long-term investors will invest more of their capital and technology in the country. We need to create both a demand and supply of skilled labor. If Cambodia cannot diversify its sources of growth, from a labour-intensive to skills-based industry, it will never become a higher-middle-income country by 2030.

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