Cambodia loses part of EU trade advantage

The European Union suspends the trade advantage granted to Cambodia. Cambodian exported products will be taxed at 20% (photo illustration). TANG CHHIN Sothy / AFP

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After a year and a half of proceedings, Cambodia partly loses a trade advantage granted by the European Union (EU). The Southeast Asian country, like other developing countries, benefits from the “Everything But Arms” customs preference which exempts its goods from customs tax in the European market. The EU is the destination of nearly a third of Cambodia's exports, the large majority of which are textiles, footwear or luggage. On the spot, the authorities say they are ready to adapt.

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From our correspondent in Phnom Penh, Juliette Buchez

Opposition party dissolved one year from the 2018 elections, party chairman arrested and accused of treason, difficulties for unions to exercise their functions ... These points were raised by the European Union, which says it has found violations "  serious and systematic  ”human and workers' rights in Cambodia .

20% taxes on exported products

However, respect for these rights is one of the sine qua non conditions  for benefiting from the “Everything but arms” customs preference . The European Union says it has not seen any improvement in this area. From this Wednesday, August 12, customs taxes will therefore apply to the equivalent of 20% of Cambodian goods exported to the EU.

The measure risks disrupting the textile sector, one of Cambodia's economic pillars. Between the prospect of the loss of this customs preference and the Covid-19 crisis, the textile industry has already been deeply destabilized for several months. Many factories have closed or partially suspended their activity since February. And 150,000 of the country's 900,000 textile workers have lost their jobs.

The government of Hun Sen , irremovable Prime Minister in power for 35 years, has continued to say it is ready to face the consequences of this loss rather than seek to avoid it.

Always closer to the Chinese friend, Cambodia  has negotiated in barely six months a free trade agreement with Beijing which must be, symbolically enough, ratified in the coming weeks.

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  • Cambodia
  • European Union

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