Cambodia’s biggest employer is its garment industry. Garment manufacturing has been critical to the country’s economic growth over the past several years, and has helped lift workers out of poverty. But those workers now find themselves caught between their own government and the European Union.
In an open plea, a trade union representing 400,000 Cambodian workers in manufacturing industries, including the garment industry, asked the EU not to revoke the tariff-free access Cambodia currently enjoys to European markets. “We, the signatories of this statement, are among the more than 700,000 men and women who work for the country’s largest employment sector,” the letter from the National Union Alliance Chamber of Cambodia (NACC) states. “We are most concerned about the prospect of losing our hard-earned livelihood.”
Cambodia is one of 49 countries covered under the EU’s “Everything but Arms” (EBA) trade agreement. The agreement allows the world’s poorest nations to export their products, except arms and ammunition, to European markets without incurring duties. The deal helped to fuel an export boom that has powered Cambodia’s economy. The country’s top export destination is the EU, and clothing its main export. If the EU were to revoke Cambodia’s preferential status, it could make Cambodia less competitive, hurting the garment industry and workers who rely on it.
Under the conditions of EBA, countries can lose their duty-free access if they don’t comply with core human and labor rights laid out by the UN and International Labour Organization. For more than a year, such conditions have been getting worse in Cambodia. The EU has pointed to the harassment of trade unions, and political repression under Cambodian prime minister Hun Sen and his party, CPP. Ahead of the country’s July 2018 election, police arrested the leader of the main opposition party and the country’s supreme court disbanded the party. CPP went on to take every seat in parliament.
The EU began the procedure to suspend Cambodia’s preferential trade status in February, by establishing a monitoring period and putting pressure on Cambodia to reform. A month earlier, US senators Ted Cruz (R-Texas) and Chris Coons (D-Del.) introduced a bill that, if passed, would require the US to review its own preferential trade status for Cambodia.
Garment workers are fearful that if the EU and US revoke Cambodia’s EBA trade access, they will be the ones who suffer (paywall). The NACC believes brands will look for cheaper places to make their clothes if Cambodia loses its trade access, and says about 43% of garment workers and 20% of footwear workers would be at risk of losing their jobs. Already, several international brands have asked Cambodia’s government to ease up, though the NACC accuses some of also threatening to move their manufacturing elsewhere.
A report (pdf) prepared for the European Parliament offered a less dire conclusion than the NACC, albeit still not a great one. “The most relevant precedent is Sri Lanka, which is also highly dependent on textile exports to the EU,” it stated. “During the seven years in which the country was suspended from [duty-free access] (2010-2017), around 10,000 workers (4% of the sector’s workforce) lost their jobs.” Textile exports did keep growing, but much more slowly than for competitors who retained their trade access. “Judging by this precedent, forecasts of over half of Cambodian textile workers losing their jobs are probably over-pessimistic, but on the other hand, the country is almost certain to miss out on growth potential,” it said.