Cambodia calls EU trade sanctions threat ‘extreme injustice’

Cambodian women workers enter a factory compound in Phnom Penh. (AFP pic)

PHNOM PENH: Cambodia has slammed an EU threat to suspend trade benefits in the wake of a deeply flawed election as an “extreme injustice” that would reverse hard-earned economic development.

The Southeast Asian country exports about US$5.7 billion (RM23.7 billion) worth of goods to the European market – mostly apparel and footwear given tariff-free access under a scheme called Everything But Arms (EBA).

The EU warned the government last week that it had started a process to withdraw from the deal in response to widely criticised elections in July, which were held without any credible opposition and tainted by allegations of voter intimidation.

EU trade commissioner Cecilia Malmstrom said that unless there were improvements the trade preferences would be suspended, though the bloc’s delegation in the country clarified the process still involved further decisions that could take a year.

In a response distributed to the media on Thursday, Cambodia’s Ministry of Foreign Affairs said it can “only take this decision as an extreme injustice when the EU blatantly disregards the considerable progress made by the country, despite its recent tragic past”.

Cambodia was ravaged by the ultra-Maoist Khmer Rouge regime in the 1970s and endured years of civil war until the first UN-sponsored elections in 1993.

It said that if the special trade access were scrapped, the EU could negate 20 years’ worth of efforts to pull millions out of poverty.

The US$7 billion apparel industry is the kingdom’s largest formal employer, providing jobs to some 740,000 people in a country with a population of 15 million.

Prime Minister Hun Sen’s ruling Cambodian People’s Party swept all seats in parliament during the poll, cementing the country’s status as a one-party state and extending his 33-year rule.

The path to victory was smoothed after authorities cracked down on dissent and the Supreme Court dissolved the main opposition party, which won more than 43% of the vote in the last ballot.

Analysts say that losing the trade scheme would be a major blow to the ruling party, which has hitched its star to economic progress and stability and faces questions of legitimacy after the vote.

Labour advocates have also cautioned against the move, citing its potential impact on employees.

Ath Thorn from the Coalition of Cambodia Apparel Workers Democratic Union said the government and the EU should “sit down for a talk” and find ways to avert the loss of the trade deal.