Eight buyers associations have expressed concern over the possible expulsion of Cambodia from international preferential trading schemes over the country’s rights record.
A coalition of buyers groups representing the garments, footwear and travel industries have said remaining in the EU’s Everything But Arms (EBA) and United States’ Generalized System of Preference (GSP) systems was essential to the health of the sectors.
In a letter to the government on April 4, the groups, which included the American Apparel & Footwear Association, Fair Wear Foundation, European Branded Clothing Alliance, Federation of the European Sporting Goods Industry, and Social Accountability International, claimed that the loss of the EBA and GSP would be a severe threat to the Cambodian economy.
They said: “we are writing to express increasing concern regarding the labor and human rights situation in Cambodia which threatens trade preferences for Cambodia. The European Union’s (EU) February 11 decision to review Cambodia’s Everything But Arms (EBA) benefits, and recently introduced legislation in the U.S. Congress to review Cambodia’s Generalized System of Preferences (GSP) benefits, are worrying developments for companies that value sourcing from Cambodia.”
They added that the removal of Cambodia from the schemes would “undermine the decades of effort your government has put into developing a successful industry, which has brought about enormous benefits both to the Cambodian economy and the Cambodian people.”
In February, the European Commission launched an official process that could see Cambodia being temporarily withdrawn from EBA, due to a dramatic decline in human rights and democratic standards. Prime Minister Hun Sen’s government oversaw the dissolution of the country’s main opposition party ahead of last year’s general elections and the jailing on numerous dissidents, as well as a widespread crackdown on independent media outlets.
Em Sovannara, an independent political analyst, said the withdrawal of the EBA and GSP could have wider, long-lasting diplomatic implications. “If we lose EBA, diplomatic policy will be gone, meaning that support from the West, EU, and the US, will be gone,” he said.
But Seang Thay, a commerce spokesman, said the loss of the EBA and GSP, though unfortunate, would not spell disaster. He said a number of measures, such as the removal of border checks and digitization of trade documentation, would help keep Cambodia competitive.
“We have done all of this work because we thought that if there is no [EBA], we still have more energy. Without EBA, we still have energy to compete because losing EBA doesn’t mean that we are blocked from exporting goods, but we are just required to pay tax. So, we have to find ways that could keep traders make profit. They can still export,” he said.
