End of EU trade preferences could bring Cambodia’s economy to its knees
The European Union (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 the bloc launched a six-month review of the county’s duty-free status.
The move comes after Cambodia held what many observers saw as a badly rigged election and apparently moved away from law and democracy.
The EU told Cambodia it will lose duty-free access attached to trade preferences it is granted as a developing nation within 12 months for its “blatant disregard” of human and labour rights standards.
Unless the Cambodian government takes significant actions to redress an autocratic backslide including reinstating the country’s banned opposition in the next six months, the EBA preferences will be withdrawn, EU officials said.
The EU is currently Cambodia’s largest export market. The announcement came as a surprise to Cambodian officials, many of whom had publicly doubted the EU would withdraw Cambodia’s privileged market access despite numerous warnings from Brussels.
The economic repercussions of higher tariffs on Cambodia-produced goods could be immense. Cambodian exports to the EU were worth $5.8 billion last year, the majority of which came from the country’s crucial garment and footwear sectors. Garment exports account for around 40 per cent of Cambodia’s GDP, and garment manufacturing is Cambodia’s biggest industry, accounting for some 800,000 jobs.
Meanwhile, Cambodia’s foreign ministry said such a decision by the EU to ramp up trade pressure on the country over human rights concerns was an “extreme injustice,” adding it risked destroying decades of development in the country. Cambodian labour unions said the government and the EU should “sit down for a talk” and find ways to avert the loss of the trade deal.
The European Union (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 the bloc launched a six-month review of the county's duty-free status. The move comes after Cambodia held what many observers saw as a badly rigged election and apparently moved away from law and democracy. The EU told Cambodia it will lose duty-free access attached to trade preferences it is granted as a developing nation within 12 months for its “blatant disregard” of human and labour rights standards. Unless the Cambodian government...
The European Union (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 the bloc launched a six-month review of the county’s duty-free status.
The move comes after Cambodia held what many observers saw as a badly rigged election and apparently moved away from law and democracy.
The EU told Cambodia it will lose duty-free access attached to trade preferences it is granted as a developing nation within 12 months for its “blatant disregard” of human and labour rights standards.
Unless the Cambodian government takes significant actions to redress an autocratic backslide including reinstating the country’s banned opposition in the next six months, the EBA preferences will be withdrawn, EU officials said.
The EU is currently Cambodia’s largest export market. The announcement came as a surprise to Cambodian officials, many of whom had publicly doubted the EU would withdraw Cambodia’s privileged market access despite numerous warnings from Brussels.
The economic repercussions of higher tariffs on Cambodia-produced goods could be immense. Cambodian exports to the EU were worth $5.8 billion last year, the majority of which came from the country’s crucial garment and footwear sectors. Garment exports account for around 40 per cent of Cambodia’s GDP, and garment manufacturing is Cambodia’s biggest industry, accounting for some 800,000 jobs.
Meanwhile, Cambodia’s foreign ministry said such a decision by the EU to ramp up trade pressure on the country over human rights concerns was an “extreme injustice,” adding it risked destroying decades of development in the country. Cambodian labour unions said the government and the EU should “sit down for a talk” and find ways to avert the loss of the trade deal.
