The European Union is set to partially or temporarily withdraw the preferential status given to Cambodia as a Least Developed Country (LDC). The current agreement between the two countries is one of ‘Everything But Arms’, which is an agreement with 48 other such LDC that permits tariff-free trade with the EU.
Cambodia mainly trades in textiles, rice and bicycles with the EU. According to a World Bank report, following this decision, tariffs on garments, footwear and bicycles will increase by 12%, 16% and 10% respectively. It is predicted to impact on 20,000 Cambodian workers, most of whom are women.
Labour rights experts foresee that this move will impact 25% of Cambodia’s total exports to the EU. The EU accounts for over half of Cambodia’s exports. Germany represents its largest export market, followed by the UK.
This move comes following the 2019 decision by EU, which set a deadline of February 12, 2020, for the Cambodian government to improve the human rights situation in the country. In September 2017, the Main Opposition Party member, Kem Soka, was arrested and charged with treason. His Party, the National Rescue Party, was dissolved two months later. Following this, there was a crackdown on media houses, journalists and activists leading up to a rigged election in 2018.
Officials have explained that the EU would repeal the decision should the Cambodian government make “further progress on civic and political rights”. The decision still awaits the approval of the European Parliament and Council, both of whom have vehemently expressed their commitment to crackdown on human rights violations. Once approved, the policy will come into force on August 12. The two bodies have previously authorised the withdrawal of the ‘Everything But Arms’ privileges of Myanmar, Sri Lanka and Belarus for the same reasons.
Cambodian Prime Minister Hun Sen stated, “I still reiterate that I do not exchange Cambodia’s independence and sovereignty for any aid and preferences”. The Cambodian government maintains its stand that it has not violated domestic laws.
Kem Sokha, following the threat of withdrawal of the agreement, has been released from house arrest but still awaits his trial. While the EU appreciates improvements in the political situation, they expect significant changes by the government to restore the situation pre-2017 conditions to avoid the withdrawal of the status.
Image Source: Nikkei Asian Review