Trade/Human Rights: Commission decides to partially withdraw Cambodia’s preferential access to the EU market

Posted by: | Posted on: February 13, 2020

Original source: European Commission

The European Commission has decided to withdraw part of the tariff preferences granted to Cambodia under the European Union’s Everything But Arms’ (EBA) trade scheme due to the serious and systematic violations of the human rights principles enshrined in the International Covenant on Civil and Political Rights.

The withdrawal of tariff preferences – and their replacement with the EU’s standard tariffs (most favoured nation MFN) – will affect  selected garment and footwear products, and all travel goods and sugar. The withdrawal amounts to around one-fifth or €1 billion of Cambodia’s yearly exports to the EU. Unless the European Parliament and the Council object, this will take effect on 12 August 2020.

High Representative for Foreign Affairs and Security Policy/Vice-President of the European Commission, Josep Borrell, said: “The duration, scale and impact of Cambodia’s violations of the rights to political participation and to the freedoms of expression and association left the European Union with no other choice than to partially withdraw trade preferences. The European Union will not stand and watch as democracy is eroded, human rights curtailed, and free debate silenced. Today’s decision reflects our strong commitment to the Cambodian people, their rights, and the country’s sustainable development. For the trade preferences to be reinstated, the Cambodian authorities need to take the necessary measures.”

Commissioner for Trade, Phil Hogan, said: “The European Union is committed to supporting Cambodia’s economic and social development through trade preferences. However, the respect for human rights is non-negotiable for us. We recognise the progress Cambodia has made, but serious concerns remain. Our aim is that the Cambodian authorities end human rights violations, and we will continue working with them in order to achieve that.”

The Commission’s decision addresses the human rights violations that triggered the procedure, while at the same time preserving the development objective of the EU trade scheme. It recognises the need to continue to support Cambodia’s economic development and diversification of its exports. All emerging industries in Cambodia will continue to enjoy duty-free, quota-free access to the EU market. High value-added garments and certain types of footwear will also continue to enjoy duty-free, quota-free access to the EU market.

The Commission’s decision follows in-depth engagement with the Cambodian government and stakeholders. In particular, during the last twelve months, the Commission and the European External Action Service conducted fact-finding missions to Cambodia and held several meetings with the Cambodian authorities at both technical and political levels.

With regard to civil and political rights, there has been no significant progress since the launch of the EBA withdrawal procedure in February 2019.

The Commission nevertheless recognises the steps taken by the Cambodian authorities, notably in the areas of labour rights and land rights. Serious concerns remain however, including in particular the unresolved civil and criminal cases against trade unionists.

The European Union reiterates to the need for the government of Cambodia to re-open the political space in the country, to create the necessary conditions for the re-establishment of a credible opposition and to initiate a democratic process of national reconciliation through genuine and inclusive dialogue. This includes the reinstatement of the political rights of the opposition members and the repeal/revision of laws, such as the Law on Political Parties and the Law on Associations and Non-Governmental Organisations.

The Commission and the European External Action Service will continue their engagement with the Cambodian authorities and monitor the human rights and labour rights situation in the country closely. In case Cambodia shows significant progress, notably on civil and political rights, the Commission may review its decision and reinstate tariff preferences under the EBA arrangement.

Background

The EU is Cambodia’s largest trading partner, accounting for 45% of Cambodian exports in 2018. Exports to the EU from Cambodia reached €5.4 billion in 2018, more than double the €2.5 billion recorded in 2013. 95.7% of these exports entered the EU market under EBA tariff preferences (i.e. €5.2 billion out of the €5.4 billion in total).

The EBA is one of the preferential trade arrangements under the EU Generalised Scheme of Preferences (GSP). It grants full duty-free, quota-free access into the EU market for all products except arms and ammunition for countries classified by the United Nations as Least Developed Countries. Access to these preferences comes with the obligation to respect human rights and labour rights.


EU opens trade door to Vietnam, closes it to Cambodia

Marine StraussPhilip Blenkinsop

STRASBOURG/BRUSSELS (Reuters) – The European Union agreed on Wednesday to open its markets wider to Vietnam, while closing its trade doors to Cambodia, rewarding Hanoi for its progress on labour guarantees and sanctioning Phnom Penh for human rights abuses.FILE PHOTO: European Union flags fly outside the European Commission headquarters in Brussels, Belgium, October 4, 2019. REUTERS/Yves Herman

The moves mark the EU’s increased insistence that trading partnerships go beyond market liberalisation and be coupled with commitments to environmental, labour and social standards. On Wednesday, it displayed both its carrot and stick.

In Strasbourg, EU lawmakers voted by 401-192 to approve a free trade agreement with Vietnam. It is the most comprehensive pact of its kind struck by the EU with a developing country, and only its second – after Singapore – with a member of the Association of Southeast Asian nations (ASEAN).

Campaign groups such as Human Rights Watch had urged the EU lawmakers to postpone approval until Vietnam had made further reforms, including on freedom of assembly and to a penal code they say puts government critics in jail.

EU trade commissioner Phil Hogan said Vietnam had already made great efforts to improve its labour rights record and the new partnership would increase the EU’s potential to promote and monitor reforms.

Vietnam Industry and Trade Minister Tran Tuan Anh called the agreement a “significant milestone” in relations and said it should take effect in July. Garment, footwear and wood furniture industries would be the chief Vietnamese beneficiaries, he said.

The deal will eliminate 99% of tariffs, although Vietnam will have a transition period of up to 10 years for some imports, such as cars and beer.

Many Vietnamese goods already benefit from preferential access to EU markets under a scheme offered to poorer developing countries. However, this applies to duties on two-thirds of product types and tariffs still apply, albeit at a lower rate, to garments.

CAMBODIA TRADE RIGHTS CURBED

By contrast, Cambodia will lose about 20% of the trade preferences it enjoys under the “Everything But Arms” (EBA) scheme the EU offers 48 of the world’s poorest countries.

The percentage equates to about 1 billion euros ($1.1 billion) of exports.

The EU executive said the move was the result of “serious and systematic violations” of human rights by Cambodian Prime Minister Hun Sen’s government.

Cambodia’s foreign ministry said it regretted the “unjust” decision, which it added was politically driven. Cambodia’s sovereignty, it said, could not be the subject of negotiations for trade preferences.Slideshow (2 Images)

The Commission will replace zero duties with standard tariffs for certain garments and footwear, all travel goods and sugar. The standard tariff for clothing is 12%.

Global clothing and shoe brands, including Adidas (ADSGn.DE), Puma (PUMG.DE) and Levi Strauss (LEVI.N), have urged Cambodia to reform, but Hun Sen said his nation would not “bow down” to foreign demands.

Cambodia was the second biggest beneficiary of the EBA scheme in 2018, behind Bangladesh. Cambodia’s total exports to the EU in that year reached 5.4 billion euros ($5.9 billion), more than double the 2013 level.

The EU is also reviewing Myanmar’s EBA status over what the West says is its ethnic cleansing of Rohingya Muslims.

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