Hun Sen’s Cambodia could be in trouble

Hun Sen’s Cambodia could be in trouble

Jason Thomas 3 June 2019

His victory came after a political crackdown which saw the dissolution of the opposition Cambodian National Rescue Party (CNRP), the detention of its leader Kem Sokha, and the banning from political activity of 118 senior CNRP members.

Hun Sen has ruled Cambodia for more than 34 years, and the EU Foreign Affairs Council has deemed the recent 2018 elections as “not legitimate”.


This file photo shows Cambodian female workers sewing at a factory in Sihanouk province, some 230 kilometres southwest of Phnom Penh, Cambodia. (Tang Chhin Sothy / AFP Photo)

Op-Ed: The ASEAN Post

There is growing concern about the European Union’s (EU) proposed suspension of its Everything But Arms (EBA) trade agreement with Cambodia, a move which could set the country back years.

Established in 2001, EBA gives 49 of the world’s least developed countries tax-free access to vital EU markets for their exports except for arms and ammunition.

While the EU has always warned that EBA preferences can be removed if beneficiary countries fail to respect core United Nations (UN) and International Labour Organisation (ILO) conventions, there is a real threat that this could come at the cost of massive unemployment and stagnant growth in Cambodia.

Source: World Bank

Role in economy, employment

Making up 39 percent of the country’s total exports, the garment and footwear sectors employ more than 700,000 Cambodians and are the country’s largest employers. Cambodia’s exports to the EU totalled US$5.47 billion last year – more than a third of its total exports – with textiles and footwear making up the majority of that sum.

After the Garment Manufacturers Association in Cambodia warned of a halt in the country’s development in February due to the possible EBA suspension, the National Union Alliance Chamber of Cambodia (NUACC) last week said that the lifting of the tariff system will affect the livelihoods of about three million Cambodians.

On 2 May, a coalition of 20 international brands which source from Cambodia – including Nike, adidas and Levi Strauss – wrote a letter to Cambodia’s Prime Minister Hun Sen outlining their concerns that the labour and human rights situation in Cambodia is posing a risk to trade preferences for the country.

The EBA suspension would increase tariffs in the garment sector by 12 percent and the footwear sector by eight to 16 percent, costing US$676 million in additional taxes. The fear is that the rise in tariffs could lead to investors moving to other countries that enjoy EBA, thus affecting Cambodian jobs.

The NUACC estimated that some 43 percent of garment workers (nearly 225,000 people) and 20 percent of footwear workers (more than 20,000 people) would be left unemployed, stating that “research suggests and history demonstrates that economic sanctions lead to an increase in poverty – especially among women, minority communities and other marginalised groups.”

Why is the EBA being removed? 

The EBA has led to a 630 percent increase in Cambodia’s garment and footwear exports to the EU since 2008, helping the Cambodian economy to grow by 7.5 percent in 2018 according to the World Bank. The two sectors recorded a five-year high in 2018, rising by 17.6 percent – more than double the 8.3 percent increase in 2017.

Helping to lift one-third of the country’s population out of poverty between 2007 and 2014, the garment and footwear sectors are now at risk following the EU’s decision to start an 18-month review on whether to suspend duty-free preferences in February after the European Commission called Cambodia out for its “deterioration of democracy, respect for human rights and the rule of law.”

The EU warned Cambodia that it could lose this special status after last July’s elections kept Hun Sen in power and saw his Cambodian People’s Party win all parliamentary seats.

His victory came after a political crackdown which saw the dissolution of the opposition Cambodian National Rescue Party (CNRP), the detention of its leader Kem Sokha, and the banning from political activity of 118 senior CNRP members.

Hun Sen has ruled Cambodia for more than 34 years, and the EU Foreign Affairs Council has deemed the recent 2018 elections as “not legitimate”.

Correct approach?

Is the EBA suspension – which, if confirmed, will only come into effect in August 2020 – really the best way to address Cambodia’s poor human rights record and democratic strength?

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Congressmen Lowenthal and Chabot Introduce Bill To Suspend Cambodia’s Preferential Trade Status

PRESS RELEASES

Original Source for Reference: Congressmen Lowenthal and Chabot Introduce Bill To Suspend Cambodia’s Preferential Trade Status

Washington, D.C., February 26, 2019 |Congressmen Alan Lowenthal (CA-47) and Steve Chabot (OH-01) today introduced bipartisan legislation requiring the Trump Administration to review the preferential trade treatment that Cambodia receives from the United States.

The Cambodia Trade Act (CTA) would require the Administration to review Cambodia’s preferential trade status under which it is allowed exemptions or reductions to tariffs on goods it exports to the United States. However, the thirty-four-year regime of Prime Minister Hun Sen has been accused of serious labor and human rights violations, as well as actions to undermine the nation’s path toward democracy by attempts to abolish any political opposition or dissent. 

“The regime of Hun Sen has steadily dismantled what was the burgeoning democracy of Southeast Asia,” Congressman Lowenthal said. “He has undermined the will of the people, subverted the promise of free and fair elections, and wielded power with the iron glove of a dictator. Intimidation, threats, violence, and even murder, are the tools of his regime. He and his regime must pay a price for their role in destroying the rule of law and violating the basic freedoms of the Cambodian people.”

The CTA would also require the Trump Administration to use the findings of the review to reach a decision on whether Cambodia’s preferential trade privileges should be withdrawn, suspended, or limited.

“As I have said repeatedly in the past, Prime Minister Hun Sen must be held accountable for uprooting democracy in Cambodia,” Congressman Chabot said. “Cambodia continues to receive preferential trade status when dealing with the United States while he continues to trample on the rights of his people. In light of his actions, it is time for us to reevaluate this special treatment.”  

Cambodia currently receives preferential trade treatment under the General System of Preferences (GSP). Under the GSP program, specific products from recognized developing countries can enter the United States duty-free. Cambodia received the preferential status in 1997 and Cambodia currently exports more than $180 million a year in goods to the U.S. duty-free under the program. The U.S. last renewed Cambodia’s GSP status in April 2018. 

Last month, Senators Ted Cruz (TX) and Chris Coons (DE) introduced identical legislation in the Senate. 

The European Union, citing human rights violations by Hun Sen’s regime, has also begun a process to suspend their own preferential trading status granted to Cambodia.

Click here to read the text of the bill.

More reports on this initiative:

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Cambodia: EU launches procedure to temporarily suspend trade preferences

Op-Ed: European Commission – Press release

Comment: នីតិវិធីដកកិច្ចអនុគ្រោះពន្ធEBAនេះគឺចាប់ផ្តើមមានឥទ្ធិពលតាំងពីសារព្រមានដំបូងរបស់លោកស្រីម៉ាលស្ត្រមម្លេះពីព្រោះជាចិត្តសាស្ត្រពាណិជ្ជកម្ម ពាណិជ្ជករមានការអល់អែកក្នុងការបន្តាក់ទុននិងពង្រីកទុនរបស់ខ្លួននៅប្រទេសកម្ពុជារួចទៅហើយ។ ពាក្យពេជ្រតំណាងអោយសហគមអុឺរ៉ុបគឺអាចយកជាការបាននិងមិនមែនជាប្រជាភិថុតិដូចទំលាប់មេដឹកនាំខ្មែរបានធ្វើកន្លងមកនោះទេ។ ពាណិជ្ជករមានភាពមុឺងម៉ាត់ណាស់ចំពោះបញ្ហានេះ។ អ្វីដែលអាភ័ព្វនោះគឺលោកហ៊ុន-សែនដែលបានធ្វើនយោបាយប្រជាសាកលនិយមឬប្រជាភិថុតិជាមួយកម្មករកន្លងមក កំពុងរុញច្រានអោយកម្មករកាត់ដេរខ្មែរជិតមួយលាននាក់ធ្លាក់ខ្លួនក្រដើម្បីដោះដូរជាមួយនឹងការរក្សាអំណាចរបស់បុរសខ្លាំងកម្ពុជាតែប៉ុណ្ណោះ។ ជាការកត់សំគាល់ លោកហ៊ុន-សែនកំពុងតែស្ថិតនៅឯកោឯកាម្នាក់ឯងបន្តិចម្តងៗ។ គាត់ឯកោឯកាពីសមាជិកអ្នកស្រឡាញ់ជាតិពិតប្រាកដក្នុងជួរគណបក្សរបស់គាត់ គាត់ឯកោឯកាពីសហគមអន្តរជាតិមានសហរដ្ឋអាមេរិកជាដើម គាត់ឯកោឯកាពីប្រទេសជិតខាងរបស់កម្ពុជាមានថៃនិងវៀតណាមក៏ដូចជាសមាគមអាស៊ានជាដើម។ល។និង។ល។

Cambodia: EU launches procedure to temporarily suspend trade preferences

Brussels, 11 February 2019

The EU has today started the process that could lead to the temporary suspension of Cambodia’s preferential access to the EU market under the Everything But Arms (EBA) trade scheme. EBA preferences can be removed if beneficiary countries fail to respect core human rights and labour rights.

Courtesy: http://ec.europa.eu/trade/policy/countries-and-regions/countries/cambodia/

Launching the temporary withdrawal procedure does not entail an immediate removal of tariff preferences, which would be the option of last resort. Instead, it kicks off a period of intensive monitoring and engagement. The aim of the Commission’s action remains to improve the situation for the people on the ground.

High Representative for Foreign Affairs and Vice President of the European Commission Federica Mogherini said: “Over the last eighteen months, we have seen the deterioration of democracy, respect for human rights and the rule of law in Cambodia. In February 2018, the EU Foreign Affairs Ministers made clear how seriously the EU views these developments. In recent months, the Cambodian authorities have taken a number of positive steps, including the release of political figures, civil society activists and journalists and addressing some of the restrictions on civil society and trade union activities.However, without more conclusive action from the government, the situation on the ground calls Cambodia’s participation in the EBA scheme into question. As the European Union, we are committed to a partnership with Cambodia that delivers for the Cambodian people. Our support for democracy and human rights in the country is at the heart of this partnership.”

EU Commissioner for Trade Cecilia Malmström said: “It should be clear that today’s move is neither a final decision nor the end of the process. But the clock is now officially ticking and we need to see real action soon. We now go into a monitoring and evaluation process in which we are ready to engage fully with the Cambodian authorities and work with them to find a way forward. When we say that the EU’s trade policy is based on values, these are not just empty words. We are proud to be one of the world’s most open markets for least developed countries and the evidence shows that exporting to the EU Single Market can give a huge boost to their economies. Nevertheless, in return we ask that these countries respect certain core principles. Our engagement with the situation in Cambodia has led us to conclude that there are severe deficiencies when it comes to human rights and labour rights in Cambodia that the government needs to tackle if it wants to keep its country’s privileged access to our market.” 

Following a period of enhanced engagement, including a fact-finding mission to Cambodia in July 2018 and subsequent bilateral meetings at the highest level, the Commission has concluded that there is evidence of serious and systematic violations of core human rights and labour rights in Cambodia, in particular of the rights to political participation as well as of the freedoms of assembly, expression and association. These findings add to the longstanding EU concerns about the lack of workers’ rights and disputes linked to economic land concessions in the country.

Today’s decision will be published in the EU Official Journal on 12 February, kicking off a process that aims to arrive at a situation in which Cambodia is in line with its obligations under the core UN and ILO Conventions:

– a six-month period of intensive monitoring and engagement with the Cambodian authorities;

– followed by another three-month period for the EU to produce a report based on the findings;

– after a total of twelve months, the Commission will conclude the procedure with a final decision on whether or not to withdraw tariff preferences; it is also at this stage that the Commission will decide the scope and duration of the withdrawal. Any withdrawal would come into effect after a further six-month period.

High Representative/Vice-President Mogherini and Commissioner Malmström launched the internal process to initiate this procedure on 4 October 2018. Member States gave their approval to the Commission proposal to launch the withdrawal procedure at the end of January 2019.

Background

The Everything But Arms arrangement is one arm of the EU’s Generalised Scheme of Preferences (GSP), which allows vulnerable developing countries to pay fewer or no duties on exports to the EU, giving them vital access to the EU market and contributing to their growth. The EBA scheme unilaterally grants duty-free and quota-free access to the European Union for all products (except arms and ammunition) for the world’s Least Developed Countries, as defined by the United Nations. The GSP Regulation provides that trade preferences 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 Regulation.

Exports of textiles and footwear, prepared foodstuffs and vegetable products (rice) and bicycles represented 97% of Cambodia’s overall exports to the EU in 2018. Out of the total exports of € 4.9bn, 99% (€ 4.8bn) were eligible to EBA preferential duties.

For More Information

MEMO: EU triggers procedure to temporarily suspend trade preferences for Cambodia 

Trade relations with Cambodia

Generalised Scheme of Preferences

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EU starts process to hit Cambodia with trade sanctions

Op-Ed: Reuters

BRUSSELS, Feb 11 (Reuters) – The European Union started on Monday an 18-month process to end Cambodia’s preferential trade access to the bloc over its record on human and labour rights and democracy.

The European Commission, which coordinates trade policy for the 28-member EU, said that its decision would be published in the EU official journal on Feb. 12, triggering a countdown that would run until August 2020.

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