Withdrawing Cambodia’s tax-free entry into the European market would negatively impact nearly four million people, the Garment Manufacturers Association of Cambodia (GMAC) said Monday, as a monitoring period to determine eligibility for the trade scheme drew to a close.
The European Commission on Feb. 12 launched a six-month investigation to determine whether the country’s exports should continue to enjoy tariff free exports to the EU under the Everything But Arms (EBA) arrangement.
The decision was prompted in part by reports of labor rights violations, as well as by a November 2017 ruling by Cambodia’s Supreme Court to ban the Cambodia National Rescue Party (CNRP), amid a wider crackdown by Prime Minister Hun Sen on the political opposition, NGOs, and the independent media that paved the way for his ruling Cambodian People’s Party (CPP) to win all 125 seats in parliament in the country’s July 2018 general election.
The European Commission plans to present Cambodia with a report on its findings from the monitoring period in November, after which it will make a final decision in February 2020 on whether or not EBA status will be withdrawn fully or in part. Suspension would come into effect by August 2020.
GMAC—which represents the owners of Cambodian garment factories—urged the EU to preserve Cambodia’s EBA status, noting that the garment industry account for some 75 percent of the country’s exports and 90 percent of its goods shipped to the bloc, and warning that a withdrawal of the beneficial trade scheme would be disastrous for workers and their families.
It said that the garment industry directly employs 750,000 workers in Cambodia, while the EBA positively impacts the lives of some three million workers and their families in the country.
“A suspension of EBA benefits for our sector will result in large job losses across the garment, footwear, and travel goods labour force and would not serve the EBA programme objective of poverty eradication and sustainable development,” the association said in a statement.
“It would also be a sad and regrettable outcome for GMAC and its workforce, which has done so much to advance the role of the International Labour Organisation (ILO) in monitoring labour compliance, not only in Cambodia but in our sector in other countries in the world.”
According to GMAC, under the EBA scheme, Cambodia’s garment industry had helped to lift “millions of Cambodians out of poverty” and made significant contributions to the country’s economic and social development.
The association also pledged to improve its compliance record and support international scrutiny of its labor compliance and supply chain due diligence in partnership with the international brands that source from Cambodia.
Both GMAC and unions representing workers in Cambodia’s garment sector had expressed concern over the EU’s decision to consider withdrawing EBA status when the European Commission launched its monitoring period in February.
Unions and government
On Monday, Ath Thorn, the head of the Cambodia Labour Confederation (CLC), told RFA that while Cambodia’s unions and GMAC both want the EU to maintain EBA status for Cambodia, employers in the country are largely responsible for violations of labor rights that the bloc has expressed concerns over.
He said that instead of urging the EU to reconsider the possible withdrawal of EBA status, GMAC should urge Cambodia’s government to respond to EU demands for labor condition improvements and the restoration of democratic norms.
“From what I can see, what GMAC is doing won't help to keep EBA status,” he said.
“GMAC always takes advantage of new laws or regulations, and continues to abuse the rights of workers and the union.”
Meanwhile, government spokesperson Phay Siphan told reporters on Monday that the government is continuing to “negotiate” with the EU over the EBA, while introducing new policies to encourage new investment in the country.
“We are doing all that we can, while taking our national sovereignty and independence into consideration,” he said, adding that he expects a “positive result” from the EU.
Hun Sen and other government officials have painted the possible withdrawal of the EBA as a politically motivated decision by the EU, saying the bloc wants to use the trade status as leverage to reverse the ban on the CNRP and free opposition chief Kem Sokha from house arrest while awaiting trial on charges of treason.
But while the government has promised to draw additional investment into the country to offset any losses from an EBA withdrawal, Moun Tola, executive director of the Center for Alliance of Labor and Human Rights, told RFA that its efforts will be fruitless if it does nothing to improve political freedoms, as well as human, labor, and land rights.
He called on GMAC to hold talks with the government as a key party to the EBA issue.
GMAC’s concerns send a strong message to the government to pay attention to the potential negative consequences from an EU decision to withdraw the EBA,” he said.
“The government already knows that most of the country’s workers and their families are in debt.”
Exports from Cambodia to the EU were valued at U.S. $5.8 billion last year, more than 95 percent of which came under the EBA. Some U.S. $4.5 billion was attributed to the clothing and textile industries, which stand to take the brunt of the damage from an EBA withdrawal.
Also on Monday, more than 500 Cambodian residents of Japan and members of the Cambodian diaspora from other countries held a protest march in Tokyo against Hun Sen’s rule, calling on him to step down.
The protesters, who were joined by CNRP vice president Mu Sochua, said they plan to petition the Japanese government and all signatories to the October 1991 Paris Peace Accord, which led to the establishment of a democracy in Cambodia following years of civil war, to pressure Hun Sen’s government to restore human rights and democracy to the country.
Mu Sochua told those gathered at the protest to “use their freedom as a tool” to demand the release of Kem Sokha and overturn the ban on the CNRP by Cambodia’s Supreme Court, which she called “a tele-court, controlled by [politicians].”
A protester named Seng Kari told RFA he had joined Monday’s march to urge his countrymen to “make a change of their leader [Hun Sen], who does not respect or love his fellow Khmer.”
CPP spokesperson Sok Eysan in Phnom Penh called the protest “meaningless” and “inconsequential.”
“We paid no attention to this protest,” he said, adding that “it had no impact on us inside the country.”
Reported by RFA’s Khmer Service. Translated by Neang Ieng and Sum Sok Ry. Written in English by Joshua Lipes.