Brussels is expected this week to move towards stripping Cambodia of some its trade preferences with the EU in response to a political crackdown on the country’s opposition.
The European Commission has decided to remove duty-free access for some of the more than €5bn of goods Cambodia exports to the bloc under the Everything but Arms (EBA) programme that benefits poor countries, three people close to the process said.
But Brussels was likely to refrain from approving a blanket withdrawal of all the trade preferences, they said, and was expected to maintain some support for the garments sector to help protect the livelihoods of factory workers.
The decision to withdraw preferences would be reversible and take effect in early August unless EU member states or the European Parliament blocked the move.
Since 2017, Cambodia has arrested and tried the opposition leader Kem Sokha on treason charges, outlawed his Cambodia National Rescue party, and cracked down on independent media. European and US diplomats have criticised the crackdown but some see the EBA initiative as their main point of leverage with the government led by Hun Sen, the autocratic prime minister of more than 35 years.
Diplomats said Brussels was keen to leave the door open to dialogue with Phnom Penh and was wary of pushing the government closer to China.
“It’s a bit of a nuclear option to take everything away,” one of the people briefed on the decision said. ‘Everyone knows China would benefit from this in geopolitical terms.”
The EU imported a record €5.3bn worth of Cambodian goods in 2018, the most recent year for which data are available, and the bloc is the country’s second-largest trading partner after China.
The EBA allows the world’s poorest countries duty- and quota-free access to the EU market for all products except weapons and ammunition. Cambodia is the programme’s second-biggest beneficiary after Bangladesh.
Daniel Rosario, a commission spokesman, confirmed Brussels would take a final decision on Cambodia by mid February — the one-year deadline set by the launch of the preference withdrawal procedure last year.
“The process is . . . based on the facts obtained during the process and the engagement with Cambodia over the past year,” he said. “Any possible measures will be balanced to effectively address the rights violations that triggered the temporary withdrawal procedure, while at the same time preserving the development objective of the Everything but Arms scheme.”
Cambodia is a test for the bloc as to whether scrapping trade preferences is an effective tool in putting pressure on autocratic governments, or whether it risks harming employees, businesses and the wider economy.
The commission said it planned to send a mission soon to Myanmar to assess whether to proceed with a separate case on potentially withdrawing EBA preferences there.
Human rights groups and international companies have warned the EU that scrapping the preferences for the country would endanger hundreds of thousands of jobs, mostly held by women. However, some campaigners have urged Brussels to take action after last month’s order by the UN’s International Court of Justice for Myanmar to halt alleged genocidal acts against the minority Rohingya.
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