Prime Minister Hun Sen on Tuesday appeared to shrug off the European Union’s decision last week to suspend tariff-free access for around one-fifth of Cambodia’s exports to its market over rollbacks on democracy and human rights, saying his country will “continue to export” despite facing higher tariffs.
The partial suspension of preferential trade status Cambodia enjoys under the Everything But Arms (EBA) scheme for developing nations, announced on Feb. 12, would affect around U.S. $1.1 billion of the country’s exports to the EU.
The decision would reinstate tariffs on garments and footwear, as well as travel goods and sugar, beginning Aug. 12, unless it is blocked by the bloc’s governments or its parliament, the European Commission (EC) said.
On Nov. 12, the EU warned in a preliminary report that Cambodia has not taken enough measures to prevent a withdrawal of its EBA status, noting the country’s further deterioration of civil, political, labor, social, and cultural rights since the launch of a review process in February last year.
“I have acknowledged your decision [EU’s commission decision to withdraw EBA] but I need you to accept Cambodia’s decision as well,” Hun Sen told students during a graduation ceremony in Phnom Penh.
“They have the right to make the decision but they need to respect our decision,” he said in his first public remarks on the EU decision.
“Let pay them taxes of about 100 million dollars. Please pay the tax but we will continue to export,” Hun Sen told students.
He added that he won’t make any statement about EBA until the official statement will be released by Feb. 29.
Hun Sen, whose government has been dismissive of EU warnings that it would impose punitive trade measures, said any slowdown to Cambodia’s economy would come not because of EBA, but due to the coronavirus affecting China, a major source of inputs.
“Our economic growth prediction is 6.5 percent, but we know for sure that it will decline, but it is not because of EBA. We still have markets,” he said.
Social and political analyst Meas Nee predicted difficulties ahead.
“Cambodia’s production depends on Chinese supplies, and they are now also lacking raw materials because of the spread of COVID-19, so the Cambodian government seems to be caught between a crisis of the virus outbreak in China, and the suspension of EBA,” he told RFA's Khmer Service.
“We already knew that 20 percent of EBA will be suspended, and if we view this amount as not too much, we now also have a crisis with the import of raw materials,” said Meas nee.
The EU launched the process to strip Cambodia of its preferential trade terms following the arrest of opposition Cambodia National Rescue Party (CNRP) President Kem Sokha in September 2017 and the Supreme Court’s decision to ban his party for its role in an alleged plot to topple the government two months later.
The ban, along with a wider crackdown on NGOs and the independent media, paved the way for Hun Sen’s ruling Cambodian People’s Party (CPP) to win all 125 seats in parliament in the country’s July 2018 general election.
Reported by RFA’s Khmer Service. Translated by Samean Yun. Written in English by Paul Eckert.