Cambodia: EU partially withdraws trade preferences over rights concerns; stakeholders respond

In February 2020, the European Commission decided to withdraw part of the tariff preferences granted to Cambodia under the European Union's Everything But Arms' (EBA) trade scheme because of serious concerns over violations of human rights and fundamental freedoms. 

Business & Human Rights Resource Centre follows this story, with updates on statements made by various stakeholders in response to the recent decision.

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17 October 2018

EuroCham Cambodia Issues Joint Letter Against EBA Withdrawal

Author: Fresh News

The chairmen of the international chambers of commerce, including the European Chamber of Commerce in Cambodia, the French Cambodian Chamber of Commerce and Industry (CCIFC), the German Companies Group in Cambodia (ADW ), North European Chamber of Commerce in Cambodia (NordCham), and Italian Business Association in Cambodia addressed a special letter to Cecilia Malmstrom, Commissioner for European Trade Commission, in the protest against the withdrawal of Everything But Arms (EBA) schemes from Cambodia.

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16 October 2018

Negotiations on EBA being held

Author: Meas Sokchea, The Phnom Penh Post

In an effort to defuse tensions, a senior government official said Cambodia is negotiating with the European Union (EU) on the Everything But Arms (EBA) trade deal, which allows the Kingdom to export goods to the 28-member bloc tariff-free.

… Government spokesman Phay Siphan said … that because the trading scheme involves multiple fronts, including human rights, the Cambodian negotiating team is comprised of the ministries of foreign affairs, interior, justice and commerce.

Also included in the agenda are workers’ rights and land conflicts, among others.

… He said the government maintains its position to protect workers’ interests and Cambodia’s sovereignty as an independent country throughout the talks.

Political analyst Meas Nee said the government’s willingness to turn to negotiations with the EU is a positive sign that could pave the way for a political compromise.

... “If there is a negotiation, there must be a solution. …,” he said…

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11 October 2018

Cambodia calls EU trade threat 'extreme injustice'

Author: Amy Sawitta Lefevre, Channel News Asia

Cambodia's foreign ministry ... said a decision by the European Union to ramp up trade pressure on Cambodia over human rights concerns was an "extreme injustice", adding it risked destroying decades of development progress in the country.

… "The Cambodian government can only take this decision as an extreme injustice when the EU blatantly disregards the considerable progress made by the country, despite its recent tragic past," Cambodia's Ministry of Foreign Affairs said ...

"By implementing these withdrawal measures, the European Commission risks negating twenty year's worth of development efforts," it added. 

… Over the past two decades it has been the world's sixth fastest-growing economy, with average GDP growth rate of 7.6 percent, according to the World Bank, largely due to its garment exports which are mostly bound for the EU and the United States.

Cambodia's exports to the European Union were worth 5 billion euros (4.37 billion pounds) last year, according to EU data,...

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10 October 2018

EU launches process for withdrawal of EBA preference for Cambodia & plans to send EU mission to Myanmar

Author: Cecilia Malmstrom, European Commission

"On Myanmar and Cambodia," 5 Oct 2018

... In Myanmar, we have seen a deeply worrying and worsening situation for the Rohingya minority. A recent report from a United Nations fact-finding mission calls for the prosecution of top military leaders for genocide and crimes against humanity... The country's leadership has repeatedly disregarded calls from the EU and the international community to put a stop to this... In Cambodia, meanwhile, we are seeing very troubling developments with a clear deterioration of human rights and labour rights, without convincing improvements in sight. 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.

... Both Cambodia and Myanmar benefit from the Everything But Arms arrangement, or EBA, which guarantees completely tariff-free access to the European market for all exports except for weapons and ammunition... [which] comes with a responsibility to uphold and respect the values enshrined in 15 fundamental conventions of the United Nations and the International Labour Organisation... [T]he European Commission and the European External Action Service will notify the Myanmar authorities of our intention to send an emergency, high-level EU mission to the country... to assess the situation... Today, High Representative Federica Mogherini and I have therefore notified Cambodia that we are launching the process for the withdrawal of their Everything But Arms preferences. Without clear and evident improvements on the ground, this will lead to the suspending of the trade preferences that they currently enjoy.

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9 October 2018

Cambodia's Hun Sen defiant despite EU trade threat

Author: Prak Chan Thul, Reuters

Cambodia’s Prime Minister Hun Sen has taken a defiant stance following a European Union announcement last week that it would ramp up trade pressure on Cambodia over human rights concerns. The European Union... told Cambodia on Friday it will lose its special access to the world’s largest trading bloc, and said it was considering similar trade sanctions for Myanmar, adding that it was ready to punish human rights abuses in both countries...Hun Sen said Cambodia must defend its sovereignty. Hun Sen has held power for three decades....The EU warned Cambodia in July that it could lose its special trade status after a general election that month returned Prime Minister Hun Sen to power. Rights groups said the election was not fair because of the lack of a credible opposition, among other reasons...Cambodia’s exports to the European Union were worth 5 billion euros ($5.8 billion) last year, according to EU data, up from negligible levels less than a decade ago. Cambodia’s textile, garments and footwear industry are vital to its economy. Around 40 percent of its GDP comes from garment exports.The garments sector employs more than 800,000 workers. The EU and U.S. are the country’s primary markets for exports, according to the International Labour Organization (ILO).

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9 October 2018

EU tariffs threaten to flatten Cambodia

Author: David Hutt, Asia Times

Months after Cambodia held what many observers saw as a badly rigged election, the European Union is ramping up trade pressure in punitive response to the move away from rights and democracy... The EU announced on October 5 that Cambodia would lose its special access to European markets under the so-called Everything But Arms (EBA) preferential trade scheme after it conducts a six-month review of its duty-free status launched last week... The economic repercussions of higher tariffs on Cambodia-produced goods could be immense... The process for removing Cambodia from the EBA scheme is lengthy and incremental, and is not expected to fully begin for another six-months... By starting that process, the EU has laid down what it considers the “red line” the Cambodian government crossed last year when a compliant Supreme Court forcibly dissolved the nation’s only viable opposition party, the Cambodia National Rescue Party (CNRP). Additionally, the EU has criticized the government’s attacks on independent media and nongovernmental organizations, and its alleged widespread disregard for human rights... To avoid being removed from the EU’s EBA scheme, the CPP-led government must show clear improvement on rights and democracy. 

... EU-imposed tariffs will necessarily make Cambodia’s garment exports less competitive vis-a-vis its manufacturing rivals... Considering that most manufacturing workers contribute part of their salaries to family members, any one person laid off work will impact the finances of at least another two or three people, analysts say... A letter sent to the EU this year by five Cambodian trade unions claimed that imposing tariffs would directly affect as many as three million Cambodians.

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7 October 2018

EU's media release on a Commission decision regarding the EBA withdrawal procedure

Author: Delegation of the European Union to Cambodia

Preparations have been launched for a Commission decision which will set in motion the formal procedure for temporary withdrawal of Everything But Arms (EBA preferences for Cambodia. 

... The EU has emphasised that it will keep the channels of dialogue with Cambodia open, and that if Cambodia were to take measures to swiftly remedy the situation that has led to the initiation of the withdrawal procedure, the EU would reconsider the situation.

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6 October 2018

Myanmar: EU consideration of suspending trade privileges alarms garment sector & raises concerns regarding job losses

Author: Ben Dunant, Frontier Myanmar

"EU trade privileges move alarms garment sector," 6 Oct 2018

A announcement by the European Union that it is considering suspending trade privileges for Myanmar because of alleged Tatmadaw atrocities in Rakhine State has alarmed garment firms, which say hundreds of thousands of jobs are at risk. The move has also puzzled human rights activists and campaign groups, few of whom have lobbied for broad economic sanctions. EU trade commissioner Ms Cecilia Malmström [said[]... that the EU is imminently sending a mission to Myanmar to determine whether to begin a withdrawal process, which would include a six-month review window for Myanmar to demonstrate progress. Malmström cited the report of a United Nations Fact-Finding Mission, which outlined the “gravest crimes under international law” in Rakhine, as their motive for reviewing the trade privileges. Companies claim that blocking Myanmar’s access to the Everything But Arms programme... would pose an existential threat to Myanmar’s burgeoning garment sector... MGMA chairperson U Soe Myint told Frontier that, if European trade privileges are withdrawn, more than half of all garment workers could lose their jobs... A spokesperson... H&M, which entered Myanmar in 2013 and now sources from 40 factories employing 43,000 people, told Frontier that withdrawing privileges would be a big setback for the sector.

Burma Campaign UK director Mr Mark Farmaner was sharply critical of the EU move. “It is ridiculous that the EU has rejected sanctions against military owned companies, rejected banning all training of the military, won’t support a UN arms embargo, and won’t even support referring the situation to the International Criminal Court, but is considering imposing a kind of sanction which will mainly affect ordinary people."

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