Spotlight: Cambodian garment workers concern over EU's possible suspension of duty-free preferences

0 Comment(s)Print E-mail Xinhua, February 16, 2019
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by Mao Pengfei, Nguon Sovan

PHNOM PENH, Feb. 16 (Xinhua) -- Cambodian trade union leaders and workers in the garment and footwear sector remained concerned about the European Union (EU)'s possible suspension of duty-free trading preferences for the kingdom, though the government has taken a series of precautionary measures.

The EU started earlier this week the 18-month process that could lead to the temporary suspension of Cambodia's duty-free trading access to the EU market under the Everything But Arms (EBA) scheme.

"We remain concerned about this because some workers borrow money to build houses for their parents or to buy small pieces of land for themselves, and they repay the debt by instalment," Chheng Dano, vice president of the National Independent Federation of Textile Unions of Cambodia, told Xinhua.

"So if factories have problems, workers will have problems with their jobs too and ultimately they may have no money to repay the debt," she said.

Sam Theoun, a sewing team leader at the Hung Wah (Cambodia) Garment factory in Phnom Penh, shared the concerns and prayed for it not to happen.

"I'm extremely concerned over the EU's decision," the 43-year-old mother of three children told Xinhua. "I've borrowed some money from a bank to build a small house, so if I don't have the job, I don't know how to earn money to repay the debt," she said.

According to the Garment Manufacturers Association in Cambodia (GMAC), the garment and footwear industry employed around 700,000 workers, while another 2 million out of the kingdom's total population of 16 million also economically depended on the sector.

GMAC's President Van Sou Ieng said to help the kingdom's garment and footwear sector remain competitive even if the EBA is suspended, the government should provide more tax incentives and reduce the annual public holidays for workers, which are currently 48 days a year.

Arnaud Darc, chairman of the European Chamber of Commerce in Cambodia (EuroCham), which represents more than 350 companies in the country, said EuroCham was deeply concerned about the possible negative consequences of the EU's decision on current and future business between EU and Cambodia.


Cambodian Prime Minister Samdech Techo Hun Sen has called on all workers, public servants and armed forces not to worry about the possible withdrawal of the EBA, saying that serious reforms have been taken to support local producers and exporters.

"To all workers: if you still continue to hold on to jobs and make incomes, you should not be concerned about who says what," he said during the closing ceremony of the Interior Ministry's annual conference on Thursday.

"To civil servants, armed forces, and retirees: as long as you still get paid from the state, please don't be concerned about who says what," he added.

EU is a key trading partner for Cambodia, especially for garment and footwear sector. As a Least Developed Country, Cambodia has enjoyed exports of all products, except arms and ammunition, to the EU market with zero percent tariff since 2001.

According to the Ministry of Commerce, the country exported products worth a total of 18 billion U.S. dollars in 2017, in which 7 billion U.S. dollars, or nearly 40 percent of the total amount, went to the EU market.

If the EBA is stripped, tariffs in the garment sector will increase by 12 percent, as those in the footwear sector will rise by 8 to 17 percent.

Mey Kalyan, senior advisor to the Supreme National Economic Council, said the EBA cannot stay with Cambodia forever, and it will leave the country automatically one day when its economy advances to a certain development stage.

The expert told Xinhua that the possible suspension of EBA presented an opportunity for Cambodia to stop depending much on western countries, to implement serious reforms, and to think profoundly how to make the economy more resilient and be able to stand on its own feet.


Cambodian Ministry of Commerce Secretary of State Sok Sopheak said on Friday that to prepare for the possible EBA withdrawal, the government has taken a number of measures to strengthen economic independence and to support local manufacturers and exporters.

He said the measures included the cancellations of various fees and the reduction of electricity tariffs, among others.

"In total, it's about 200 million U.S. dollars (a year)," he said, referring to the government's support for local producers and exporters in case the EU withdraws the EBA.

"With the cheaper cost of production, we believe that our products will be more competitive on the international market," he said, adding that the kingdom is also diversifying its exports to China, Japan, South Korea, Australia, New Zealand, and India as well as other Southeast Asian countries.

Sok Touch, president of the Royal Academy of Cambodia, said if the EBA is not withdrawn by August 2020, Cambodia will still automatically lose it in 2025 when the country moves from the current lower-middle-income country to the middle-income country. Enditem

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