Unionists in Cambodia have warned that officials’ attempts to downplay the importance of trade ties with the European Union are not taking seriously the impact that the impending withdrawal of preferential trading arrangements will have on workers.
The EU announced this week that it had set in motion an 18-month process to withdraw Cambodia from its Everything But Arms (EBA) trading scheme, which allows the world’s least developed countries tariff-free access to EU markets.
The government has responded by playing down its dependence on EU trade, despite warnings from the industry and workers’ associations.
The EU can withdraw countries from the scheme if they breach a number of international conventions.
Moeun Tola, executive director of Center for Alliance of Labor and Human Rights (CENTRAL), said losing Cambodia’s EBA membership would be devastating for workers.
“When our economic growth keeps rising, we may perhaps be able to pay tax or reduce corruption. When our competitiveness is improved, it means we can stand on our own,” he said.
Prime Minister Hun Sen has responded by saying that Cambodia must break free from its reliance on foreign aid, which has underwritten the Cambodian economy since the fall of the Khmer Rouge in 1979.
In January, Vongsey Visoth, a secretary of state at the finance ministry, was quoted in local media as saying that the “inevitable” withdrawal of the EBA meant Cambodia must conduct widespread economic reforms to attract foreign businesses.
He said Cambodia could remain competitive despite having to pay tax on its EU exports.
But Tola said Cambodia would struggle to compete against others in the region due to its reliance on imports of raw materials.
“So it’s difficult for investors to reduce production costs,” he said, suggesting this could lead factory owners to reduce wages, which in turn could lead to social unrest.
Pav Sina, president of the Collective Union of Movement of Workers (CUMW), said allowing the EBA to be withdrawn would “create a change but lose another”.
“If we keep what we have and create another chance, it means that will doubly profit,” he said.