PHNOM PENH – Phnom Penh Cambodia slipped another step closer to losing all of its trade sweeteners with the EU this week after the European Commission sent the Cambodian government a preliminary report outlining the findings of the investigation triggered in February 2019 under the procedure for a possible temporary withdrawal of Everything But Arms (EBA) trade preferences.
The Everything But Arms arrangement is one pillar of the EU’s Generalised Scheme of Preferences, which grants duty-free and quota-free access to the European market for all products (except arms and ammunition) from the world’s Least Developed Countries.
These may be suspended in case of “serious and systematic violation of principles” laid down in the human rights and labour rights Conventions listed in Annex VIII of the GSP Regulation.
Cambodia is the second-largest beneficiary of EBA trade preferences, accounting for over 18 per cent of all imports coming into the EU market under the EBA scheme in 2018. EU imports from Cambodia totalled €5.3bn in 2018, 95 per cent of which entered the EU duty-free taking advantage of EBA preferences. Clothing and textiles account for around three quarters of EU imports from Cambodia (€4bn) and loss of trading benefits would be a huge blow for the local industry.
That said, Cambodia has been warned repeatedly on the issue of labour and human rights issues. Said an EU spokesperson: “The decision of the Phnom Penh Municipal Court to ease the conditions of detention of Cambodian opposition leader Kem Sokha is a first step in the right direction. However, Kem Sokha remains under court supervision, his case is not closed and he is banned from engaging in any political activities.
“The European Union reiterates the importance of the Cambodian authorities taking immediate action to open the political space in the country, to establish the necessary conditions for a credible, democratic opposition and initiate a process of national reconciliation through genuine and inclusive dialogue. In particular, we expect Kem Sokha to be fully released and his political rights reinstated so that he can play a full part in political life. We also expect the Cambodian authorities to reinstate the political rights of all opposition members banned from political life and to fully release all opposition members, supporters and activists recently put under detention.”
Cambodia now has one month to react to this preliminary report. The Commission will then finalise the report and take a decision in February 2020 on whether or not to temporarily withdraw Cambodia’s tariff preferences.
Cambodia close to losing EU trade benefits
