EU Prepare to Hit Cambodia with Trade Sanctions

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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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^^ That's very kind of them.
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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Another take on the EU's decision to revoke the EBA trade agreement with Cambodia.

Is the EU Wrong on Rights in Cambodia?
The EU’s approach risks undermining Cambodia’s development and harming its own image in the country.
By Kongkea Chhoeun
May 17, 2019

In February 2019, the European Union launched an 18-month process to determine whether or not to maintain Cambodia’s preferential access to the EU market under the Everything But Arms (EBA) trade scheme. The review follows what the European Union perceives as “the deterioration of democracy, respect for human rights and the rule of law in Cambodia.”

Analysts, civil society members, and many in the private sector have expressed concern over the European Union’s potential suspension of the trade scheme, due to how much is at stake for Cambodia. The EBA scheme allows Cambodia to export anything to the EU market, with the exception of weapons, duty-free and quota-free. In return Cambodia must fulfill its obligations to the core UN and International Labor Organization conventions. Cambodia was granted access to the scheme, offered to most Least Developed Countries, in 2001.

In 2018, exports to the European Union accounted for more than a third of Cambodia’s total exports and were valued at 4.9 billion euros ($5.5 billion), of which 99 percent were eligible for EBA preferential duties. Textiles and footwear, prepared foodstuffs, vegetable products, rice, and bicycles represented 97 percent of exports to the European Union in the same year. The textiles and footwear industries alone employ more than 700,000 Cambodians, indirectly benefiting millions of others.
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How much the EBA scheme has contributed to Cambodia’s economic development is difficult to precisely determine. Cambodia’s merchandise exports have grown from $1.5 billion in 2001 to over $12 billion in 2017. Over the same period, its GDP per capita has more than doubled, from $454 to $1,137. The poverty rate also declined from 50.2 percent in 2003 to 13.5 percent in 2014.

It is also difficult to predict the economic consequences of the EBA removal in the long run. A recent report by the World Bank hints only that “losing EBA preferences … would likely result in slower export growth.” The suspension of the EBA would increase tariffs by 12 percent in the garment sector and by 8–17 percent in the footwear sector. It will likely cost Cambodia’s economy $676 million in additional taxes.

It is reasonable to speculate that in the short term — depending on the effectiveness of the Cambodian government’s economic reforms — the EBA withdrawal could deprive hundreds of thousands of Cambodians of decent jobs and plunge them into poverty. This could create conditions for social unrest and political instability. Data from the World Bank indicates that 4.5 million Cambodians, or 28 percent of the population, remain “near-poor” — extremely vulnerable to returning to poverty if exposed to economic and external shocks.
https://thediplomat.com/2019/05/is-the- ... -cambodia/
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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CEOCambodiaNews wrote: Sat May 18, 2019 8:18 pm
This could create conditions for social unrest and political instability.
And no government has or would ever do something that would trigger a regime change in a foreign country right.
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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HE’s Cambodia could be in trouble
Jason Thomas
3 June 2019
Image
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.

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 HE 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.”
https://theaseanpost.com/article/hun-se ... be-trouble
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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This got me curious to see which Asian countries are on the EBA list. The answer is not many, most of them are African. The Asian ones are:
Afghanistan, Bangladesh, Bhutan, Lao, Burma, Nepal, Timor-Leste.
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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Burma and Cambodia already had their rice exports excluded from the scheme in early 2019. This was said to be due to the price of their rice having fallen over the years since the scheme was introduced in 2001 and them therefore taking an increased and unacceptably high market share in the EU rice sales. Presumably other rice producers in EBA (and Italy in the EU itself) do not enjoy such high productivity as Cambodia and Burma.
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

Post by Arget »

China’s private firms concentrate their investments on the garment industry and the tourism sector.


Chinese investment in the textiles and clothing industries contributes significantly to the socio-economic development through creating job opportunities for more than half a million Cambodian workers.

The Chinese have the most to lose if the EBA is cut as they have invested in this area to make the most of the "made in Cambodia" listing. Watch them jump if the EBA is withdrawn. They only invest to make money, not out of any desire to assist a neighbour progress and assistance is also to buy a no vote on the South China Sea issue.
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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Cambodian FM meets EU official on issue of EBA trade preferences
Source: Xinhua| 2019-06-06 19:13:53|Editor: xuxin

PHNOM PENH, June 6 (Xinhua) -- Cambodian Foreign Minister Prak Sokhonn on Thursday met here with Jean-Christophe Belliard, deputy secretary general at the European External Action Service, to discuss the issue of the Everything But Arms (EBA) trade preferences, a Cambodian government spokesman said.

The European Union (EU) started in February the 18-month process that could lead to the temporary suspension of Cambodia's duty-free trading access to the EU market under the EBA scheme due to concerns over human rights and labor rights.

During the meeting, Sokhonn thanked the EU for having supported Cambodia's socio-economic development for more than 20 years and said that Cambodia would try its best to maintain the EBA, according to Cambodian Foreign Ministry Spokesman Ket Sophann.

"The government would spare no effort to keep the EBA, but we have our own red line: Cambodia would not exchange its sovereignty and independence for the EBA," the spokesman quoted Sokhonn as saying to Belliard.

Both sides agreed to continue dialogues in order to find out a solution to retain the EBA for Cambodia, the spokesman said.

It was the second time that the EU sent its fact-finding team to Cambodia for the EBA issue.
http://www.xinhuanet.com/english/2019-0 ... 122265.htm
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

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CEOCambodiaNews wrote: Thu Jun 06, 2019 9:03 pm "The government would spare no effort to keep the EBA, but we have our own red line: Cambodia would not exchange its sovereignty and independence for the EBA," the spokesman quoted Sokhonn as saying to Belliard.
Not at all scripted
It's a fair point, though woker's welfare extends beyond immediate working conditions
But rather ironic given the ownership of the majority of garment factories

.

monstra mihi bona!
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Re: EU Prepare to Hit Cambodia with Trade Sanctions

Post by AndyKK »

There was talk recently of the Chinese investors possibly moving their intentions, Myanmar and Bangladesh due to having better skilled workers in those countries, whom also work for less money.
Always "hope" but never "expect".
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