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Posted by: | Posted on: January 17, 2019

Hun Sen rages as investors flee EU trade threat

Global clothing brands are pulling orders from Cambodian factories in anticipation the nation will soon lose tariff-free access to European markets

មុននេះបន្តិចក្នុងខែនេះ ទស្សនាវតីសំលៀកបំពាក់Apparel Insiderបោះពុម្ពផ្សាយថា ប្រទេសកម្ពុជានឹងត្រូវបាត់បង់ការបញ្ជាទិញដ៏ធំមហិមាពីព្រោះយឺហោរធំៗអន្តរជាតិបារម្មណ៍ថាកម្ពុជាអាចនឹងបាត់បង់ការអនុគ្រោះពន្ធពិសេសអ៊ីប៊ីអេ។

អត្ថបទបានសរសេរបា្រប់ដោយមិនបញ្ចេញឈ្មោះយីហោរណាមួយជាក់លាក់ថា”ប្រភពរបស់យើងប្រាប់អំពីយីហោរមួយចំនួនបានសម្រេចចិត្តរួចជាស្រេចដើម្បីដកខ្លួនចេញពីការបញ្ជាទិញពីប្រទេសដែលនឹងជួបវិបត្តិ”។ ក្រុមហ៊ុននាំមុខគេធំៗដូចជាអាម៉ានី ហ្កាប និង អេតនិងអិម ផ្គត់ផ្គង់សំលៀកបំពាក់ពីរោងចក្រដែលមានមូលដ្ឋាននៅប្រទេសកម្ពុជា។

Earlier this month, the industry publication Apparel Insider reported that Cambodia is set to lose “huge swathes” of orders because international brands are fearful that it could lose EBA privileges.

“Our sources suggest a number of brands have already decided to begin pulling orders from the beleaguered country,” the article stated without naming any particular brands. Leading global companies such Armani, Gap, and H&M source clothing from Cambodia-based factories.

Op-Ed: Asia Time, By DAVID HUTT@davidhuttjourno PHNOM PENH, JANUARY 16, 2019 5:07 PM (UTC+8)

Cambodian Prime Minister Hun Sen speaks during a ground breaking ceremony  in Phnom Penh on January 14, 2019. Photo: AFP/Ly Lay

Cambodian Prime Minister Hun Sen speaks during a ground breaking ceremony in Phnom Penh on January 14, 2019. Photo: AFP/Ly Lay

Cambodian Prime Minister Hun Sen said on Monday that a dissolved opposition party will be “dead” if the European Union (EU) moves ahead with plans to withdraw his country from a tariff-reducing trade arrangement.

The threat comes amid reports that international brands are pulling contracts from Cambodia’s crucial garment and footwear sectors in anticipation of the EU possibly ending the country’s tariff-free access to European markets.

Marking his 34th year as Cambodia’s prime minister earlier this week, an anniversary that makes him one of the world’s longest serving non-royal leaders, Hun Sen launched one of his strongest tirades yet against the EU.

“There is no need to embrace [you] because it’s too late, so let it be. If we were to step on the necks [of the opposition party], it would be just like this,” he said in a public speech, referring to the Cambodia National Rescue Party (CNRP), the country’s only viable opposition party that was dissolved by the Supreme Court in November 2017.

The CNRP was accused of conspiring with the United States to conduct a “color revolution,” despite almost no evidence provided to support the allegation. The EU has pressed for the party’s reinstatement and the release of its president Kem Sokha, who has been held in pretrial detention since his arrest in September 2017 on treason charges.

“If you want the opposition dead, just cut it,” Hun Sen added, referring to the EU’s threat to withdraw Cambodia from the “Everything But Arms (EBA)” preferential trade scheme in response to his political crackdown.

“If you want the opposition alive, don’t do it and come and hold talks together,” he added, in what amounted to a possibly lethal ultimatum to the EU.

Cambodia's Prime Minister Hun Sen gestures as he shouts slogans on the last day of the commune election campaign in Phnom Penh on June 2, 2017. Photo: AFP/Tang Chhin Sothy

Hun Sen gestures on the commune election campaign trail, Phnom Penh, June 2, 2017. Photo: AFP/Tang Chhin Sothy

Hun Sen’s Cambodian People’s Party (CPP), which has been in power since 1979, easily won a general election last July, at which it took all 125 seats in the National Assembly. Many Western nations considered the election illegitimate.

In principle, the EU wants Hun Sen’s government to engage in judicial and political reform, including allowances for the CNRP to return as a legal entity again. The CPP has constantly said the CNRP’s restitution is not on the table, though it has released jailed activists and conducted limited political reforms in recent months.

Some of the 177 CNRP politicians who were banned from politics in November 2017 were offered a reprieve after the government amended the constitution in December.

Those tentative reforms seemed to acknowledge the importance of maintaining access to EBA trade privileges. Cambodia exported roughly US$5.8 billion worth of goods to the EU in 2017 under the scheme.

The majority of those exports came from its vital garment and footwear sector, which accounts for almost 40% of Cambodia’s gross domestic product (GDP).

In 2016, roughly 18% of all European imports under the EBA scheme came from Cambodia, with only Bangladesh selling more. The EU has not yet formally launched the withdrawal process, though it is thought to have begun informal procedures in that direction.

In October, the European Commissioner for Trade Cecilia Malmström said that Cambodia had been notified of the EU’s position, adding that “without clear and evident [political] improvements on the ground, this will lead to the suspending of the trade preferences that they currently enjoy.”

17 December 2018, Belgium, Br¸ssel: Cecilia Malmstrˆm, EU Commissioner for Trade, interviewed in her office. Photo: Thierry Monasse/dpa

Cecilia Malmstrom, EU Commissioner for Trade, in a December 17, 2018 interview in Brussels. Photo: AFP via DPA/Thierry Monasse

Once the withdrawal process is started, it could take up to a year before the European Commission actually decides if tariffs will be placed on all Cambodian exports or just certain products. It is unlikely, unless the EU wants to be most punitive, that garment exports will be the first to face duties.

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