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EU tariffs threaten to flatten Cambodia

Author: David Hutt, Asia Times, Published on: 9 October 2018

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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