The International Trade Council announces that the European Union has formally adjusted its trade relationship with Cambodia, moving away from its preferential trade programme, the Everything but Arms (EBA) agreement. The decision, resulting from Cambodia's persisting systemic human rights violations, reinstates custom duties on a significant proportion of Cambodia's exports to the EU.
Under the EBA, an initiative introduced in 2001, Cambodia had enjoyed the privilege of exporting goods (excluding armaments) to the EU without duties and quotas, given its status as one of the United Nations' Least Developed Countries. The Southeast Asian nation, recognised as one of the fastest-growing economies globally, was the second-largest beneficiary of the EBA scheme, with approximately 40% of all products exported to the EU under EBA preferences.
In 2019, Cambodian exports, predominantly in the garment industry, to the EU were valued at €5.6 billion. The recent changes will impact about 20% of Cambodia's exports to the EU, which will now be subject to standard World Trade Organisation tariffs.
A statement from the EU declares, "Effective from 12 August, certain Cambodian exports such as garments, footwear, and travel goods will be subject to the European Union's customs duties." The preferential treatment previously granted to Cambodia is temporarily lifted due to grave, recurring human rights concerns within the country. The EU is ready to reinstate the preferential status if it observes "substantial improvement" in Cambodia's human rights record.
Trade Commissioner Phil Hogan echoes this, emphasising the urgent need for Cambodia to uphold human rights and labour rights. Despite the circumstances, the EU continues to support Cambodia and its people, who have benefited greatly from trade opportunities made available to them.
This action follows serious and increasing concerns over human, political, and labour rights in Cambodia, leading to a withdrawal procedure from the EBA preferences initiated in early 2019. A comprehensive report unveiled systematic human rights abuses, including severe restrictions on political opposition and threats to press freedom.
While the Cambodian government has criticised the EU's actions as "threats" and "an extreme injustice", it has not shown willingness to address the concerns raised, choosing instead to strengthen its relationship with China.
The International Trade Council supports the decision of the European Union, as it seeks to uphold human rights and fair practices in international trade. We urge the Cambodian government to take the necessary steps to address these issues and improve the human rights conditions within its borders, which could then lead to the reinstatement of its preferential trade status with the EU.