A coalition of Cambodian clothing and footwear industry representatives has again urged the EU Commission to reconsider a decision to withdraw the country’s preferential access to the EU market under the Everything But Arms (EBA) trade scheme.
Cambodia is currently set to lose its duty-free benefits on some garment and footwear products and all travel goods from 12 August. After this date, the products will incur duties at the WTO’s Most Favoured Nation (MFN) rate.
At the beginning of June, the Garment Manufacturers Association in Cambodia (GMAC), the Cambodia Footwear Association (CFA), and the European Chamber of Commerce in Cambodia (Eurocham) urged the presidents of the European Commission and European Parliament, and the European External Action Service (EEAS) high representative, to re-evaluate the decision in light of the crisis.
The three want the withdrawal of any of Cambodia’s EBA benefits to be postponed for at least 12 months as the country reels under the impact of the Covid-19 pandemic.
just-style understands that representatives for the European Parliament have responded and expressed willingness to engage with the Cambodian government should it continue to address the violations that have been highlighted as part of the investigation. The EU is keen to maintain a good trading relationship with the nation. However, it requires the Cambodian government to take action on the points raised by the European Union. Should the Cambodian government do so, the EU will act to swiftly reinstate the benefits.
In a statement yesterday (30 June), the coalition thanked the chair of the European Parliament’s International Trade Committee, Bernd Lange, for its letter on behalf of the president of the European Parliament, David Sassoli.
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By GlobalDataIt said since the beginning of the pandemic, some 400 factories in the Cambodian apparel, footwear and travel goods sectors have had to suspend operations, with most others operating at reduced capacity and in excess of 150,000 workers in the sector, most of whom are women, have already lost their jobs. This number is likely to rise sharply in the coming weeks as numerous brands and retailers in Europe and North America have cancelled or delayed orders due to the drop in retail sales in Europe from the pandemic, the cohort says, adding consequently, “millions of Cambodian citizens could fall back into poverty due to this crisis.”
“We appreciate the response from chair Lange of the European Parliament, and we are again asking him to consider that when the European Commission made its decision in February, that was done without any awareness of the coming impact of the Covid-19 pandemic,” adds Ken Loo secretary-general of GMAC. “We are asking that the European Union take a reasonable time to consider that impact now.”
The Cambodian garment, footwear and travel goods sectors are the largest employer in Cambodia, and support some 1m workers and their families.
“The European Union through EBA has become our largest market for footwear,” says Ben Kao, secretary-general of the CFA. “Our factories and workers have suffered enormously from the pandemic, and many are trying to survive until demand, hopefully, resumes later in 2020. A second blow from the withdrawal of EBA benefits could be a second blow that most factories will not be able to sustain.”
The associations have appealed that the decision should be delayed under a full impact assessment can be made of the EBA withdrawal coming on top of the pandemic.
“As the European Union is Cambodia’s largest trade partner, we very much hope the European Commission will reconsider this decision,” says Eurocham chairman, Arnaud Darc. “Since it was made before the pandemic hit, it seems clear that the fair thing to do is to assess how many Cambodian factories could be bankrupted by the scheduled loss of EBA, and how many workers and their families could be returned to poverty. That would be a regrettable result of this action is not stopped, and it will undermine the growing ties between Europe and Cambodia. he economy of Cambodia is simply not in a position to provide decent alternative jobs for those that will be displaced.”
A report from the World Bank earlier this month estimated the Cambodian economy could contract by nearly 3% this year as a result of Covid-19.
