Asia | Needling Hun Sen

The European Union threatens the mainstay of Cambodia’s economy

It is considering imposing tariffs on Cambodian garments

FROM STITCHING sequins to printing logos, making clothes can be a delicate, fiddly process. Even so, Cambodian factories swiftly fulfil huge orders placed by Western firms. Clothing is the country’s main export, bringing in some $5bn a year, and Europe its largest market. More than 40% of Cambodia’s goods head there. Under a concessionary regime called “Everything But Arms” (EBA), all Cambodian products enjoy tariff-free access to the European market.

Listen to this story.
Enjoy more audio and podcasts on iOS or Android.

In return the Cambodian government is supposed to respect the democratic and humanitarian principles of the UN charter and the EU’s Lisbon treaty, as well as the conventions of the International Labour Organisation (ILO) on workers’ rights. Unfortunately, it does nothing of the sort. So the European Commission is starting its own delicate, fiddly process: to withdraw Cambodia’s preferential tariff regime.

Cecilia Malmstrom, the relevant European official, told the Cambodian government as much last month. The country’s strongman, Hun Sen, has been in power for more than 30 years. Brutal campaigns against his critics help keep him in the job. Ahead of an election in July, the government arrested the leader of the Cambodian National Rescue Party (CNRP), the main opposition; closed independent news outlets; and intimidated activists. The courts helped by dissolving the CNRP completely. The ruling party duly won every one of the 125 seats in parliament. Ms Malmstrom has condemned all this as “blatant disregard” for human rights. The government huffily retorted that the steps it had taken were “within the prerogatives of an independent and sovereign state”.

The imposition of tariffs on garments could cause severe economic pain. What is more, garment workers are a testy bunch. They protested in huge numbers about poor pay and conditions five years ago. Their support for the CNRP almost caused an upset in the previous election, in 2013. A charm offensive followed. The government has increased the minimum monthly wage from $45 then to $182. The prime minister frequently visits factories himself, promising more fillips. But these improvements would make no difference to those left without jobs if the terms of trade with Europe change.

The European Commission does not want to hurt the industry’s 740,000-odd workers, most of whom are women from the countryside. Many village homes have changed from wood to brick thanks to garment workers’ remittances. An ILO representative cites a study that found that every worker in the industry supports three other people. The hope is that the mere threat of losing trade privileges will spur the government to release detained opponents and give more leeway to the press.

Foreign clothing brands are also pressing the government to ease up. A delegation from such firms as Nike and Adidas visited Cambodia in recent weeks to argue for better treatment of labour leaders and other activists. “We fully understand the need for the European Union to look into how to address the human-rights situation in Cambodia,” declares a spokesman for H&M, a Swedish fashion giant. If tariffs do bite, flighty firms can always move elsewhere. A new free-trade deal between the EU and Vietnam makes the latter an attractive alternative.

But trade relations will not change for months yet. The process of suspending EBA access requires consultation with various institutions of the EU, further discussion with Cambodia and two six-month periods for collecting public comments, among other bureaucracy. Tariffs would not come into force until 2020 at the earliest, if any are agreed on at all. Not all EU members are keen. France, the former colonial power, wants to exempt clothing and target only sugar. Sophal Ear, a professor at Occidental College in America, says such a narrow response to the government’s misdeeds would be “a complete joke”.

This article appeared in the Asia section of the print edition under the headline "Needling Hun Sen"

America: Why the mid-terms matter

From the November 3rd 2018 edition

Discover stories from this section and more in the list of contents

Explore the edition

Discover more

What next for Pakistan?

The new government faces polarised politics, a faltering economy and terrorist threats

The Islamic State’s branch in Afghanistan is at war with the world

The group which claimed responsibility for the Crocus City Hall attack is increasingly worrying


Arvind Kejriwal’s imprisonment is a stain on India’s democracy

He is the first sitting chief minister in the country’s history to be arrested