Cambodia will no longer benefit from the European Union's preferential trade programme
Cambodia and the European Union have for years been on a collision course over the south-east Asian country’s “serious and systemic violation of human rights”.
Now, the EU has officially reimposed custom duties on a big portion of Cambodia’s exports, following up on an announcement it had made in February.
What agreement did Cambodia have with the EU?
The trade relationship between the two parties fell under the Everything but Arms (EBA) agreement, a 2001 initiative under which all imports (except for armaments) to the European Union from the United Nations’ Least Developed Countries were automatically considered duty-free and quota-free.
One of the world’s fastest-growing economies, Cambodia has taken enormous advantage of the EBA: the European Union has long been Phnom Penh’s first business partner.
The country was the second-largest beneficiary for years, accounting for around 40 per cent of all items exported to the EU under EBA preferences.
In 2019, its exports to the EU (mostly in the garment sector) were worth €5.6 billion according to the EU’s estimates.
What has Brussels said?
The withdrawal of preferential access under the EBA concerns about 20 per cent of the ASEAN country’s exports to the bloc. From now on, Cambodian businesses will still be allowed to export these same goods under general tariffs applicable to every other member of the World Trade Organisation.
“As of today, 12 August, some of Cambodia’s typical export products such as garments, footwear and travel goods are subject to the European Union’s customs duties”, reads a statement on the EU’s official website.
“The preferential treatment enjoyed by Cambodia”, the statement continues, “is now temporarily lifted due to serious and systematic concerns related to human rights ascertained in the country. The EU enforces this measure while staying open to engage with Cambodia on the necessary reforms”.
Commissioner for Trade Phil Hogan has echoed this sentiment.
“We have provided Cambodia with trade opportunities that let the country develop an export-oriented industry and gave jobs to thousands of Cambodians. We stand by their side also now in the difficult circumstances caused by the pandemic. Nonetheless, our continued support does not diminish the urgent need for Cambodia to respect human rights and labour rights,” he said.
Yet, there is room for hope: the Commissioner said that Brussels is always ready to restore tariff-free access if the EU sees “substantial improvement” in the Asian country’s human rights record.
What human rights violations?
Following serious concerns about the steady deterioration of human, political and labour rights in the country, which emerged from decades of war and genocide in the early 1990s, the Commission opened a procedure of withdrawal from the EBA preferences in early 2019.
Months later, in November, it submitted a long report detailing systematic human rights violations.
A worrying crackdown on political opposition – including a ban on the Cambodia National Rescue Party in 2017 at the government’s request – paved the way to a controversial general election in 2018 that saw a landslide victory for Hun Sen, leader of the ruling Cambodian People’s Party.
Due to the absence of any credible opposition, the elections were considered rigged by the international community.
Political repression did not end after the elections: during the year-long review conducted by the EU alone, national authorities arrested over 60 CNRP members and threatened press freedom, according to Human Rights Watch.
Dozens of passports belonging to opposition members were cancelled and over a hundred were summoned to police stations on dubious charges. Many have had to flee the country for fear of persecution.
In the meantime, labour rights were relaxed with an amendment meant to decrease protections for hundreds of thousands workers making clothes for global fashion brands.
“The amendments further curtail workers’ labour and human rights by severely limiting their freedom of association, and rights to organize and collective bargaining,” 36 unions and advocacy groups warned in late 2019.
What does Cambodia say?
Cambodian authorities have repeatedly complained about the EU’s “threats”.
In December 2019, the country’s foreign ministry called Brussels’ decision to increase pressure on the country “an extreme injustice” that risked destroying decades of development progress in the country.
Just before the European Commission’s decision in February, Hun Sen called for his citizens to come together to protect the country’s “independence, sovereignty and peace.”
“We want to be friends and partners with all countries around the world but if they do not understand us and want to force us, we don’t agree,” he added. “We have already tasted countless war, tragedies they had made for us, but we are not dead”.
He also warned that in case the EBA was revoked his government would take revenge on members of the opposition.
Faced with the chance of improving the country’s human rights standards, he decided not to bend to the bloc’s request. Instead, he signed a new agreement with China which some have said will not be sufficient to balance the loss Cambodia will suffer from losing preferential trade access with the EU.