The jobs of many hard-working women in Cambodia are at risk after the EU announced its intention to partially withdraw free access for Cambodian goods to the EU market due to the country’s “serious and systematic violations of human rights”.
As one in a group of least-developed countries, Cambodia enjoys the most preferential trade arrangement with the EU under the Everything But Arms (EBA) tariff, which offers quota and duty-free access to the EU single market for all goods except arms. Cambodia currently exports more than €5 billion of goods to the EU, most from its thriving garment sector.
In order to qualify for the EBA scheme, countries have to comply with many different UN and International Labour Organisation conventions on human rights.
Standard tariffs will now apply for certain products to Cambodia, including low-added-value garments and shoes, travel goods and sugar. But other products are still covered by the EBA, including high-added value clothes and shoes, and bicycles.
Using tariffs as a lever
This partial withdrawal of preferences of a country under the EBA tariff is unprecedented. The EU has fully and partially withdrawn trade preferences in the past – for Sri Lanka and Belarus – but these countries were under less beneficial arrangements in the Generalised Scheme of Preferences.
The EU’s decision to only partially withdraw preferences for Cambodia arguably reflects the adverse impact of a full withdrawal on the socio-economic rights of the thousands of people working in the affected sectors. A full withdrawal would arguably also restrict current supply chains into the EU.
The withdrawal is due to occur in August, bar any objection from the EU Council or parliament. The Cambodian government has time to ameliorate the situation, and the withdrawal decision could be reversed should the political space be opened significantly in the next few months. The EU Commission would look for the establishment of active political opposition, removal of restrictions on NGOs and more freedoms of assembly, expression and association.
However, the view of the Cambodia Ministry of Foreign Affairs and International Cooperation is clear: it called the EU’s decision “unjust” and “politically driven”. The government also refutes the claims of violations of human rights. A spokesperson said the government: “Remains firm in its principled position in rejecting any attempt by external parties in their use of trade and development assistance as pretexts to justify their interference in Cambodia’s internal affairs.”
Such rhetoric is familiar to those in Cambodia. The government has frequently railed against external interference in the internal affairs of the country. It has engaged in discussions with the EU for two years, since “enhanced engagement” was initiated after concerns were expressed in the European Parliament and at the UN. The process to temporarily suspend EBA privileges was initiated in February 2019.
Such decisions on trade preferences are not technically sanctions, but they are designed to encourage the state to move into closer alignment with civil, labour and political rights. The EU is particularly concerned about the lack of a credible political opposition party in Cambodia, after the former opposition was dissolved by the Supreme Court in late 2017. The country is now a de facto one-party state.
The leader of the former opposition, Kem Sokha, is currently on trial for treason after he was detained in September 2017. His release from house arrest in November 2019 was welcomed by the EU but was not enough to assuage concerns. Human rights defenders, especially those working on land issues and civil and political rights, are frequently arrested, followed and have their activities curtailed, as I’ve detailed in my role as the UN’s special rapporteur for human rights in Cambodia.
Setting a precedent
The loss of this export market could have a negative impact on the socioeconomic rights of many people working in the textile sectors. Around 800,000 people, mostly women, are employed in factories.
A fifth of Cambodia’s exports to the EU are affected, worth almost a billion euros. But the measures taken by the EU against Cambodia are unlikely to have as dramatic an impact as some feared. As the EU targeted its withdrawal at lower value items, where more people work, it will affect them, but the higher-skilled sector won’t be affected. Moreover, there are opportunities for Cambodia to conclude trade agreements with China (currently an influential development partner) or indeed with a post-Brexit UK, which has been one of the EU’s largest importers of Cambodian products.
Nevertheless, the shockwaves may reverberate further. The EU continues to monitor human rights and labour rights in other EBA beneficiary countries including Myanmar and Bangladesh. Either or both could yet have their trade preferences fully or partially withdrawn.
The EU’s decision to partially withdraw preferences appears an attempt to balance its concern over civil and political rights with concerns over the impact a full withdrawal could have on socioeconomic rights of Cambodian workers, and perhaps the EU’s own markets. The Cambodian government continues to emphasise its success in securing the peace and dramatic economic progress in the country in the 21st century. The EU decision focuses on justice and freedom but tries to mitigate the impact on development. It is a move that could have implications around the world for countries that do not uphold their human rights commitments.