EU to launch withdrawal process of trade preferences in Cambodia over rights concerns & warns Myanmar of potential similar action

The EU is launching the process to end Cambodia's duty-free access to the European Market for exports, and is considering suspending similar trading privileges in Myanmar for human rights abuses in Rakhine state. 

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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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