Sales of Cambodian apparel, footwear and travel goods are estimated to fall by 50 to 60 percent in the second quarter year-on-year, according to the Cambodia Footwear Association, the Garment Manufacturers Association in Cambodia and the European Chamber of Commerce in Cambodia. In a co-signed letter sent to the European Union last week, the three organizations pleaded for Brussels to postpone by at least one year the planned withdrawal of Cambodia’s duty-free treatment under the Everything But Arms (EBA) scheme.
Further highlighting the consequences of the coronavirus pandemic on their respective industries, the signatories of the letter also highlight the fact that 250 factories have closed and 130,000 workers have lost their jobs already. They also argue that the suppression of the EU duty-free benefits could undermine already achieved improvements in labor rights and working conditions.
The EU initially launched the EBA withdrawal procedure in February 2019, justifying the procedure by Cambodia’s violations of political and civil rights. Seeing no significant progress since then, the European Commission decided last Feb. 12 to lift part of the trade-free preferences granted to Cambodia, the measure taking effect from August 12. According to the commission, the withdrawal amounts to about €1 billion of Cambodia’s export to the EU, or 20 percent of the country’s total exports. However, some high value-added garments and certain types of footwear will continue to benefit from the EBA status.
The EU has not yet officially replied to the Cambodian industries’ letter but the Asian Nikkei Review reports that the Commission confirmed in an email that the way for Cambodia to regain full EBA status was through showing significant progress in political and civil rights.
Separately, the national assembly of Vietnam, which neighbors Cambodia, approved the EU-Vietnam Free Trade Agreement.