Cambodia faces trade sanctions by Europe
The EU started an 18-month process on Monday that could lead to the suspension of Cambodia’s duty-free trade access over its record on human rights and democracy.
The European Commission, which co-ordinates trade policy for the 28-member EU, said its decision to start the process would be published in the EU official journal on February 12, triggering a countdown that could run until August 2020.
Cambodia benefits from the “Everything but Arms” (EBA) trade regime, which allows the world’s poorest countries to sell any goods, except weapons, tariff-free into the bloc.
The EU warned Cambodia in July 2018 that it could lose this special status, after elections maintained Prime Minister Hun Sen in power and gave his party all parliamentary seats. He has led the country since 1985.
The EU is Cambodia’s largest trading partner, accounting for 45% of its exports in 2018. Clothing factories employ about 700,000 workers, and garments are a share worth about €4.9bn of exports to the bloc.
Cambodia is the secondlargest user of EBA preferences, behind Bangladesh. Businesses and unions in Cambodia last month urged the EU not to withdraw the preferences, saying that would harm millions of workers and their families.
The European Commission said its goal was to ensure Cambodia improved the situation for its people, with withdrawal of preferences only a last resort.
“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,” trade commissioner Cecilia Malmstrom said.
EU foreign affairs chief Federica Mogherini said the EU recognised Cambodian authorities had taken positive steps in recent months, such as releasing political figures and addressing some restrictions on civil society and trade union activities.
The process consists of six months of monitoring and talks with the Cambodian authorities followed by another half-year for the commission to produce a report and decide whether to withdraw the trade preferences. Any withdrawal would take effect after six months.