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Prime Minister unveils policy to combat reliance on EU, US trade

May Kunmakara / Khmer Times Share:
KT/Mai Vireak

Prime Minister Hun Sen on Friday unveiled a national policy to counteract the effects of the potential revocation of Cambodia’s preferential trade status with the European Union and the United States.

Speaking during an annual dinner event with representatives of the media, Mr Hun Sen said the new policy, dubbed ‘National Independence Policy’, aims to make economic growth less reliant on the European and US markets by facilitating trade through the country’s land border crossings.

“Before coming to this special dinner, I made a decision on a framework to protect the business climate in our country,” the premier said.

“I told Deputy Prime Minister Aun Pornmoniroth to launch a campaign called ‘Cambodia’s Independence Policy’,” he said, adding that the strategy will focus on improving the trade policy and customs procedures while reducing expenses at the border.

“We have come up with a set of strategies to protect and improve the business sector so that we can survive even if we lose the EBA [Everything-but-arms scheme].

“For instance, to cut down expenses, I just decided to reduce personnel at the border gates. We will only have immigration policy and customs officials – any other agency or institution will be removed. Right now we have so many institutions operating at the borders that they are an obstacle to trade and are costing us business.

“Except immigration police and customs officers, everyone else must go. If officials retire and there is nothing else to do, then we don’t recruit new officials,” he said, adding that, “Unnecessary expenses and corruption must be reduced – this is critical to make the country more self-reliant. It is something that we must absolutely do.”

The premier also said that export and import fees will be reduced as part of the new policy. “We will reduce fees to make trade more profitable.

“There are other strategies that we are considering. [When it comes to trade policy] we haven’t been doing well enough. We need to improve,” he added.

Chan Sophal, director of the Centre for Policy Studies, wrote on his Facebook page on Saturday that the strategy will help improve the country’s competitiveness and self-sufficiency.

“Yesterday evening [Friday], Samdech Prime Minister announced a big move to keep only immigration police and customs officials at border checkpoints in order to better facilitate trade. This is part of the reforms to improve Cambodia’s competitiveness and reduce reliance on the preferential status given by EU and US. More can be done to make Cambodia a full-fledged competitor in the global market,” he wrote.

A man transports goods across the Bavet border crossing. KT/Chor Sokunthea

The European Union and the United States are the two major markets for Cambodia’s garment and textile industries, as well as agricultural products, especially milled rice. Accounting for 46 percent of garment exports, the European bloc is the top buyer of Cambodian garments, followed by the United States, which purchases 24 percent of all exported Cambodian rice.

Last week, two US senators, Ted Cruz and Chris Coons, introduced the Cambodian Trade Act of 2019, which would require the US government to review the preferential trade treatment Cambodia receives under the General System of Preferences (GSP), according to a press release from Sen. Cruz.

“America has invested in the political future of Cambodia by establishing reliable trade and commerce, as codified in the Generalized System of Preferences,” Sen. Cruz said.

“Cambodia’s Prime Minister Hun Sen has exploited preferential treatment afforded to it by the United States and Europe. He has failed to meet basic labour rights standards, undermined the integrity of elections in Cambodia. The Cambodian Trade Act aims to hold him and his government accountable for this behavior.”

Meanwhile, Sen. Coons said, “I question whether Cambodia should have preferential access to US markets. Countries that undermine democracy, ignore labour standards, disregard human rights, and fail to protect intellectual property should not enjoy special trade privileges.

According to the statement, Sen. Cruz has long advocated for democracy and human rights in Cambodia. In October 2017, Sen. Cruz wrote a letter to the Cambodian Embassy demanding the release of opposition leader Kem Sokha. A month later, Sen. Cruz issued a release following Ambassador Bun Rong’s dismissive response.

In February last year, Sen. Cruz joined the Cambodia Accountability and Return on Investment Act of 2018, which sanctioned Cambodian officials responsible for carrying out human rights abuses.

Last year also the EU began the process of withdrawing Cambodia’s EBA status, a response to perceived democratic and human rights setbacks in the Kingdom.

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