Cambodian Prime Minister Hun Sen has shrugged off the threat of his country losing European Union preferential trade status if his country’s human rights record does not improve, saying it’s more important for Cambodia to maintain its sovereignty.
The European Union has threatened to withdraw Cambodia’s Everything But Arms (EBA) status, which gives it tariff-free access to EU markets for all goods except armaments.
This follows an assessment launched in February of Cambodia’s human rights record.
In a confidential report issued last week, the EU is believed to have warned Cambodia that it has not taken enough steps to prevent trade privileges being withdrawn.
The EU report is understood to have pointed out a deterioration of political, civil, social, labor, and cultural rights since the review process was launched.
The EU has given Cambodia one month to respond to the report, before deciding in February next year whether to withdraw EBA status.
“We don’t want to lose it, but they want to use it in exchange for our independence,” Hun Sen said, reported RFA.
“If they say we need to pay taxes, we will pay, [and] we will still make a profit but only less than before,” he said.
Cambodia should not have to bow to the EU over tax exemptions, he added.
A report by the Secretariat of One Window Service for Rice Export Formality, a joint private government working group, exports to the EU have dropped to almost 600,000 tons over the last 10 months compared to the amount sent last year, since the EU began taxing Cambodia’s rice.
Hun Sen said that if Cambodia retains EBA status, the EU will continue trying to meddle in the country’s internal affairs.
Cambodian workers have said they are already feeling the heat from EU pressure.
Lek Sopheak, a garment factory worker in southeastern Cambodia’s Kandal province, said the country has yet to lose EBA status but the pressure is starting to bite.
“When we lose the EBA, people will face issues,” he said. “My factory does not have many orders now, so how about when we lose the EBA?” he asked speaking with RFA’s Khmer service.
The clothing and footwear industry is Cambodia’s biggest export earner. In 2018, it shipped almost US$10 billion worth of products to Europe and the United States.
Clothing and textiles account for about 75 percent of EU imports from Cambodia.
Khun Tharo, program coordinator for Cambodia’s Center for Alliance of Labor and Human Rights, said Hun Sen’s comments were political bluster and that the authoritarian leader does not seem to realize how much revenue will be lost if Cambodian employers have to pay higher taxes to the EU.
“The government’s ability to collect taxes will be affected, and the private sector will also be hit,” he said.
Cambodia is the second-largest beneficiary of EBA trade privileges, accounting for more than 18 percent of all imports to the EU under the scheme last year.
EU imports from Cambodia totaled 5.3 billion euros (U.S. $5.8 billion) that year, nearly all of which entered the EU duty-free, taking advantage of EBA preferences.
The EU began applying pressure on Cambodia following the arrest of opposition leader Kem Sokha and the banning of his Cambodia National Rescue Party before elections last year.
Hun Sen says he must face treason charges, which could carry a prison sentence of up to 30 years.