EU to decide to withdraw trade privileges on Cambodian exports

Brussels is expected this week to move towards stripping Cambodia of some of its trade preferences with the EU in response to a political crackdown on the country’s opposition.

The European Commission has decided to remove duty-free access for some of the more than €5bn of goods Cambodia exports to the bloc under the Everything but Arms (EBA) programme that benefits poor countries, three people close to the process said, Financial Times reported.

The EBA trade scheme allows Cambodia to export products other than weapons to the EU duty-free and quota-free. Cambodian exports to the EU were eligible for EBA preferential duties, which included textiles, footwear, and agricultural products, such as rice. Since joining the trading scheme in 2001, the textile industry in Cambodia has experienced tremendous growth, and today employs around 700,000 workers.

The total trade in goods between the two partners equalled € 6.2 billon in 2018. The EU ranked as the second biggest trade partner of Cambodia (after China), accounting for 17.3% of the country’s total trade (China 23.8%). Cambodia is the EU’s 56th largest trading partner (accounting for 0.2% of the EU’s total trade).

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Financial Times reported that diplomats said Brussels was keen to leave the door open to dialogue with Phnom Penh and was wary of pushing the government closer to China.  “It’s a bit of a nuclear option to take everything away,” one of the people briefed on the decision said. ‘Everyone knows China would benefit from this in geopolitical terms.”

The EU last year imposed safeguard tariffs on rice from Cambodia and Myanmar for three years to protect EU producers. Cambodia has challenged the decision.

According to a spokesperson of the ruling party Cambodian People’s Party this unveil the double standard of the EU towards Cambodia. “While many countries receiving the EU trade preferential arrangement have not fully complied with conditions it has imposed, this regional grouping has always demanded the perfect implementation of the same conditions from Cambodia,” wrote Suos Yara on the Khmer Times. “EU’s decision will negatively affect hundreds of thousands of female workers and their families,” he continued remembering that the Centrist Democrat International (CDI), whose members consist of about 100 political parties from across the globe, recently issued a resolution urging the EU to treat Cambodia fairly.

Daniel Rosario, a commission spokesman, confirmed Brussels would take a final decision on Cambodia by mid February — the one-year deadline set by the launch of the preference withdrawal procedure last year. “The process is based on the facts obtained during the process and the engagement with Cambodia over the past year,” he said. “Any possible measures will be balanced to effectively address the rights violations that triggered the temporary withdrawal procedure, while at the same time preserving the development objective of the Everything but Arms scheme.”

Cover pic: David Bokuchava / Shutterstock.com